Major expansion of electricity generation required to feed expanding mining, natural gas exploitation
By GORDON HAMILTON, Vancouver Sun, June 4, 2012
A new forecast by BC Hydro shows electricity demand in the province is expected to grow by 50 per cent over the next 20 years as resource development moves into the northern half of the province. “There’s the potential for some very substantial demand growth in the province,” Doug Little, Hydro vice-president of energy planning and economic development, said of the conclusions in the utility’s 2012 Draft Integrated Resource Plan.
The plan lays out where Hydro sees future demand growth: liquefied natural gas terminals in the northwest, the gas fields of the northeast and the mining sector. It also shows how Hydro intends to meet that demand: conservation measures, new capital projects, energy purchases from domestic renewable energy providers, and energy imports from outside the province.
According to the plan, demand is expected to grow from 56,838 gigawatt hours a year in 2012 to 89,590 gigawatt hours a year by 2032, if two LNG terminals at Kitimat go ahead.
By way of comparison, Hydro’s Site C dam proposal would provide 5,100 gigawatt hours of energy.
The plan is still in the draft stage and Hydro is seeking consultation from stakeholders between now and July 6 through a series of community meetings and through an online survey at http://bchydro.tordata.net/main.php.
The final plan is to be adopted later this year.
Hydro’s plan is attracting a lot of interest from the renewable energy sector, which sees the huge increase in electricity demand as an opportunity.
“This is going to generate traction,” said David Field, of B.C. Citizens for Green Energy. “Energy is going to be a concern in the next election going forward. How are we going to power all these new installations? How are we going to power our resources like mining?”
Nicholas Heap, regional director for the Canadian Wind Energy Association, called the 50-per-cent forecast quite conservative.
“There’s obviously a big challenge coming forward for electricity demand in the province,” said Heap. “These are challenges that we think wind energy can bring solutions to.”
Hydro states in the introduction to the plan that such a far-reaching outlook is required because of the complexity and capital-intensive nature of energy projects.
“It can take five to six years to plan and build a new generation facility and even longer to develop transmission lines and infrastructure,” the plan states.
Conservation measures by residential, commercial and industrial customers are expected to contribute the most to filling the gap between the existing energy supply and the forecast demand.
“In the plan, we are proposing to increase the amount that we will acquire from conservation from the current plan which is 8,800 gigawatt hours up to 9,800 gigawatt hours. That is the largest single component of how we will meet our increase in demand over the coming 20 years,” Little said.
New capital projects, including the Site C dam at $7.9 billion, and a $420 million sixth generator at the Revelstoke generating station, along with energy purchases — from the clean energy sector and from outside the province, make up the rest.
Hydro characterizes its strategy as: Conserve more, build more, buy more.
Not surprisingly, the development of a new liquefied natural gas industry in the province’s northwest is being viewed as a major industrial consumer. It potentially represents the biggest additional load on Hydro’s system, according to the plan. There will not be enough energy from existing sources to meet the demand if all the proposed LNG terminals go ahead.
“BC Hydro has the sufficient supply to meet the energy needs of the first two of three LNG facilities expected to come into operation over the next five years,” the report states.
Kitimat LNG, a $4.5 billion project and the much smaller $450 million BC LNG project are the two proposed plants Hydro can provide with electricity. They will add 5,281 gigawatt hours a year to Hydro’s load, more than the 5,100 gigawatt hours a year to be generated by Site C, which is not expected to be in service until 2021, five years after Kitimat LNG is expected to be completed.
Further, the much larger Shell Canada LNG proposal for a plant more than twice the size of Kitimat LNG, would require new green energy plus a gas-fired turbine. Two other LNG proposals, which are not mentioned in the Hydro forecast, are also being considered by global oil and gas companies. They are a British Gas proposal for Prince Rupert and a joint Petronas-Progress Energy plan for Kitimat.
Hydro states that is working closely with LNG proponents in the event that additional electricity demand emerges and includes a scenario in the plan that would require 12,800 gigawatts of power a year — more than twice the energy of Site C — if additional LNG plants are constructed.
It also plans a new 500-kilovolt line from Prince George to Terrace to meet new demand in the northwest.
Further, Hydro is also working with industry to reduce the demand during peak periods and will be relying on smart meters and more aggressive government codes and measures, to aid in making residential consumers more conservation conscious. Eliminating the use of low-efficiency light bulbs are one such government measure sought.
Time-of-use rates — charging less for energy consumed in the middle of the night, for example — are not being considered, said Little.
However, the two-tiered rate system now in effect — where consumers pay more for incremental electricity above a specific threshold, will remain, and Hydro intends to work with stakeholders, particularly those in industry, to manage peak electricity demand. Initial programs have been successful, he said. “That would save us from having to invest in new peak resources,” Little said.
Randy Reimann, director of resource planning at Hydro, said Hydro has a successful record of meeting its demand-side management targets. “There are certainly uncertainties associated as we move forward with our demand-side management programs. We do need the public to participate with us,” Reimann said.
