BC Hydro’s impossible task

Provincial grid capacity is on a collision course with electric vehicle targets and new, expedited net-zero demands for LNG facilities. Margareta Dovgal explores.

BC Premier David Eby. Photo from the Canadian Press.

BC Hydro has been sitting comfortably for some years.

On most days, it can meet domestic demand. It can even export surplus power to the US. On other days, if provincial demand is high (due to cold weather, for example), it can import a little extra power if needed.

Like water off a duck’s back.

Soon, the Site C Dam will be complete. In 2024, it will add around 8.5 percent to BC Hydro’s generating capacity — “enough to power the equivalent of 450,000 homes per year.”

BC has a healthy surplus of electricity today, and BC Hydro expects that to continue for most of the next decade.

What could go wrong?

It’s not really a case of “going wrong” but a question of how the provider is going to meet future demand, as the provincial government joins the “electrify everything” campaign as a contribution to combatting climate change. BC’s new Energy Action Framework, for example, will require new LNG export facilities to prove they will be net zero by 2030 – a goal perhaps impossible without new hydro capacity and transmission lines, especially on the northern coast.

Near Kitimat, BC, the LNG Canada project alone could use 40% of the power produced by Site C, becoming BC Hydro's third largest customer. And that’s just for Phase One of the LNG-for-export project.

If LNG Canada goes ahead with Phase Two (and if it uses electricity to chill its Phase Two natural gas for liquefaction, as the BC government would hope), then you can double that number to 80% of the new power from Site C. As of now, though, LNG Canada says it would have to burn natural gas to generate power, at least initially, “because the [BC Hydro] transmission infrastructure just isn’t there.”

With LNG Canada considering Phase Two, Woodfibre LNG promising to be the first net zero emissions LNG export facility in the world (through electrification and carbon offsets), FortisBC planning expansion of its Tilbury plant and Port Edward LNG saying its proposed BC plant will be electrified, BC Hydro may soon find itself unable to keep up with electrification demand.

In December 2021, BC Hydro gave the BC Utilities Commission confidential estimates of the future power demands of LNG Canada, Woodfibre LNG and FortisBC’s Tilbury LNG operation. To protect that confidentiality, Hydro’s public outlook for electricity demands from LNG operations is merely lumped in with the oil and gas sector in general.

It raises the question: knowing the industry’s intentions to develop an LNG export industry and the anticipated demand on the electrical grid, why did the government not begin to develop hydro generation and transmission capacity sooner? And, having failed to do so, why is it now singling out one industry to insist it achieves an expedited net zero timeline thirty years ahead of federal plans without access to the electrical grid?

The emerging LNG industry’s intention to decarbonize through electrification is not the only challenge facing the province’s sole hydro provider. University of Victoria study (UVic) reported that if BC wants to electrify all road vehicles by 2055, it will need to at least double its power output.

Vehicular electrification is a long-term goal of the provincial government and its Clean BC plan. Yet, BC Hydro will have to cope with powering the 10,000 public EV charging stations that are planned by the BC government by 2030, and with upgrading neighbourhood-level wiring as apartment buildings and condos add electric-vehicle chargers.

Energy commentator Markham Hislop of Energi Media weighs in: “By 2050, BC may need to double or triple its . . . power generation as transportation, buildings and industry are all or partially electrified. Current output is generated with 32 hydro dams. Can the province build another 32 or 64 hydro plants in under 30 years? Of course not, so where will all that power come from?”

BC’s Clean Energy Act mandates that 93 percent of grid electricity must come from renewable resources — so 93 percent of doubled or tripled supply in power needed would have to come from renewable sources, and maybe some burning of natural gas, rendered clean by purchasing offsets.

Presumably, some of that power will come from independent power producers, such as solar, wind and run-of-river hydro projects, who can sell their surplus power to BC Hydro, which has 125 such purchase agreements.

Yet, BC Hydro has not taken on any new independent producers since Site C. Independents are hoping for more opportunities under the Clean BC plan. Cole Sayers, executive director of the Clean Energy Association of BC, says: “The next logical step is going to be my industry.”

There’s more to power supply than generating stations large and small. The power must be transmitted to users.

BC Hydro recently announced it is planning major new power lines from Prince George to Terrace, to serve “potential large-scale industrial developments.” It lists LNG facilities, mines and ports as potential customers, with construction beginning “between 2026 and 2033.”

And yet, the Haisla Nation’s Cedar LNG project at Kitimat hopes to start electrified commercial operations in 2027. The Nisga’a Nation’s Ksi Lisims LNG project, meanwhile, eyes electrified net-zero production on the northwest coast in late 2027 or 2028. Clearly, something must give.

The state of BC’s soon-to-be-swamped electrical grid and the province’s hastened net zero ambitions appear to be increasingly divorced from one another, and – without significant change in either capacity or timelines – from reality.

Think of BC Hydro, then, as sitting much less comfortably these days, and facing some seriously Sisyphean challenges.

Margareta Dovgal is the managing director at Resource Works. Follow her on Twitter and LinkedIn for more hot takes on natural resources and making the world a better, more secure and prosperous place.

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