A look at British Columbia’s energy picture in light of the Paris Agreement

In the last month or so, I have seen an upsurge of comments on my Twitter feed, and at the #bcpoli hashtag, from individuals who I can best describe as “politically active” and “partisans”. These tweets have centered on the topics of energy use, cost and policies with emphasis on our provincial government and our publicly-owned energy utility (BC Hydro). The bloggers and Tweeters are mostly complaining about two topics: the Site C Dam project and the price BC Hydro pays Independent Power Producers (IPPs) for the power they contribute to our provincial power grid. The intention of this blog post is to address these complaints in as non-partisan a manner as possible. Before I do so I suppose I should supply some background.

As readers of my blog know, I have written a lot about renewable energy and British Columbia’s role in our shared national energy future. If you are interested I have written about geothermal energy (Part 1 and Part 2), wind energy and explained the importance of regionally appropriate renewables. I have explained why some renewable energy technologies are better than others (energy density and power density); on Energiewende (Germany’s experiment with renewable energy); on the issues with biofuels; and on some of the limiting features of various renewable technologies including shortages of critical rare earth metals needed in renewable energy technologies, issues with avian mortality associated with wind energy and the role of “trust” in the renewable energy debate. Most importantly, I have actually crunched the energy numbers in order to establish what it will actually take to get British Columbia to a 100% fossil fuel-free status.

An examination of my writing will demonstrate that I have remained strictly non-partisan. I am an unpaid blogger and the only cause I shill for is evidence-based decision-making. Anyone uncertain about the facts I present at my blog can check other non-partisan sources, the best of the lot (for my British Columbian readers) being the EnergyBC website. It is a great resource for professionals and lay readers alike and represents the investment of thousands of hours of work by some very bright minds out of the University of Victoria. It is a credit to its founder (Dr. Whiticar) and the UVic community and should be on every high-school science teacher’s list of resources for their students.

Any discussion of British Columbia’s energy future should also recognize the current geopolitical situation. In December world leaders passed the Paris Agreement at the end of the United Nations Framework Convention on Climate Change Twenty-First Conference of the Parties (COP21). Under Canada’s Nationally Determined Contributions (NDC) Canada agreed to drop our greenhouse gas emissions to 30% below 2005 levels by 2030. Moreover, Canada’s NDC was written when the international climate change goal was to hold global warming to below 2 degrees Celsius. In Paris, we agreed to a much more aggressive target of 1.5 degrees Celsius. This means essentially cutting fossil fuels out of our transportation and home heating energy budgets by the middle of this century. Let’s look at what this means from an energy budget standpoint.

As I describe in my Huffington Post article Dispelling Some Myths About British Columbia’s Energy Picture:

In order to achieve a “fossil fuel-free B.C.” we would need to somehow replace the almost 60 per cent of our energy needs currently being met with fossil fuels through alternative sources. To even make a small dent in that demand means we are going to need to develop a LOT of new electricity. Unfortunately, we have already exploited almost all of the easily accessible hydro.

To put the numbers into perspective I looked at our energy future using a new unit of power a “Site C Dam equivalent”. As I wrote at my personal blog:

Consider that the Site C dam, once completed, is expected to generate 5,100 GWh of electricity. To replace the energy currently provided by gasoline and diesel fuels only, we would need to find the energy equivalent to almost 15 Site C dams! [I later estimated that efficiency gains associated with electrifying transportation could bring that number down to 9].

Remember we have only been talking liquid fuels here. For a 100 per cent fossil fuel-free B.C., we would also need to replace the natural gas used mostly for industrial purposes and for home and water heating. That would represent another 16 Site C dam equivalents.

Any knowledgeable observer looking at these numbers would recognize that British Columbia is nowhere near ready to help Canada meet our Paris Agreement commitments. Given our current electrical supply we are approximately 25 Site C Dam equivalents away from our goal. Considering the lead time associated with major power projects some might argue that we are already almost out of time. What is abundantly clear, however, is that we will need a lot of fossil fuel-free electricity in the very near future if we are to do our part to arrest global climate change. As the numbers clearly show, the Site C Dam project barely gets us started on the road to our fossil fuel-free future but at least it will help move us in the right direction.

Let’s make something else perfectly clear, there may be some legitimate complaints about how First Nations have been consulted in the Site C Dam decision. I am not fully informed about the complexities of that discussion and that is not the topic of this blog post. I am only dealing with energy needs in this post. What is clear from the discussion to this point is that any observer who claims that British Columbia does not need the power to be generated by the Site C Dam is either being disingenuous or simply does not understand either British Columbia’s or Canada’s energy picture/needs.

Having established that we need a lot of power, the question that must be asked is how do we go about generating that power? Happily BC Hydro has done a great job of evaluating various energy generation and storage technologies including establishing approximate costs for the various options. BC Hydro’s November 2013 Integrated Resource Plan is a useful resource but one that has likely only been read by a handful of energy-policy wonks. Similarly, the 2014-2015 power generation options update, which updates the 2013 data, helps further clarify our needs. A serious read of these documents makes it abundantly clear that BC Hydro cannot do all the work on its own. There are literally hundreds of billions of dollars of infrastructure (including transmission lines) that need to be planned for and constructed if we are to meet our Paris Agreement commitments. This is where the IPPs come into the story.

British Columbia, like many constituencies, has recognized that the public sector cannot pay for all the power projects we need right away. We need to find private sector partners. That is why BC has championed the public private partnership (P3) approach. For non-British Columbians a P3 is a method of paying for infrastructure where a private partner takes on the risk of building infrastructure in exchange for guarantees that they can recoup their costs through sales or tariffs over a set period of time. BC Hydro has an entire section of their web site explaining how the IPP process works. As BC Hydro puts it:

BC Hydro acquires power from Independent Power Producers (IPPs) to help meet electricity needs. IPPs develop and operate projects such as wind, water and biomass. IPPs include power production companies, municipalities, First Nations and customers. IPPs provide approximately 18,902 GWh electricity each year.

To avoid any confusion, BC Hydro has a detailed document explaining their procurement practices with respect to IPPs. In order to ensure the cost-certainty necessary to finance investments of this size, IPPs are generally provided with long-term contracts. Long-term contracts don’t just provide cost certainty for the producer; however, they also provide BC Hydro with an understanding of their expenses for years to come. Because the contracts are written for the long-term, they do not follow the ebb and flow of the day-to-day energy market. This means that some days BC Hydro gets a better deal and others the IPPs get the benefit. This is where the partisans really love to play their games. They love to report how BC Hydro is supposedly overpaying for power. Oddly enough many of these people are the same ones who demand that we work to achieve our Paris Agreement commitments and fight global warming. Their cognitive dissonance is almost painful to watch from an outsider’s perspective.

I can fully understand that political animals are going to act like political animals, but even the most politically partisan observers should be able to recognize facts when they are presented in a clear manner so let’s summarize the situation:

BC is doing well, at the moment, with respect to energy demand. While we meet most of our electrical energy needs using large-reservoir hydro, the majority of our energy needs are being met by using fossil fuels. As a nation Canada has pledged to reduce our dependence on fossil fuels. This can only be accomplished by substantially increasing our supply of electricity. To do so we will need to develop alternative energy supplies as most of our readily-available, large-reservoir hydro has been tapped. Given our future energy needs we also cannot ignore readily available large energy sources like the Site C project.

Given the extent of our future energy needs we need to start planning and funding future energy projects as soon as possible. Our national and provincial governments do not have the financial or professional resources to manage this transition alone. This means that they need to access the vast financial and intellectual resources of the private sector. The only way to involve the private sector is to provide the private sector with guarantees that we will buy the energy they produce at a fair price and we need to provide those guarantees in the form of enforceable contracts.

Let’s get real here, either the partisans out there are interested in meeting our international commitments or they are not. We need to have a serious discussion about energy in BC and that discussion needs to incorporate all the data. This topic is too important to be left for the partisans.

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9 Responses to A look at British Columbia’s energy picture in light of the Paris Agreement

  1. Fred says:

    Agreed, BC has little room to move. But then the rest of Canada is in the same boat.

    What the Liberals signed us up for at Paris/COP21 is both unrealistic and ridiculous. A 30% cut from our 2005 GHG level of 750Mt is just not going to happen. Cutting 210Mt would crucify the economy, reduce Canada to preindustrial 3rd world levels of social development.

    Take the Transport sector for example. Take every car, bus, truck, train, plane & ship off the roads, rails, waterways and skies and Canada would lower is GhG output by 110Mt or just over 50% of the required cuts.

    Where do we get another 90Mt of cuts? Cutting Industrail emissions by 50% would do but would be economic suicide. Canada won’t and shouldn’t make this level of cuts ever but it is Liberal chucklefest level thinking they can make it happen by 2030. But then Liberals are somewhat numerically challenged. How about those 25,000 Syrian refugees that arrived in Canada by the end of January last year?

    Run the numbers.
    https://www.ec.gc.ca/ges-ghg/default.asp?lang=En&n=5B59470C-1&offset=3&toc=show

    I built a quick & dirty spreadsheet and it is alarmingly clear Paris/COP21 is just Kyoto déjà bu.

    The Prime Minister should get a new dog and name it “Paris”. Good for his Green Cred.

    Liked by 1 person

  2. Interesting points, though you don’t allow for improvements through technology (LED bulbs, for one) and people “seeing the light” when their power bill goes through the roof, nudging them into better conservation habits. There is a lot of waste going on, which could be tightened up.

    As well: what about other sources of power generation, such as tidal, wind, solar and geothermal — and let’s not forget hyper-efficient nuclear.

    I find it odd that BC Hydro has been banned by the government from taking part in any power projects, other than Site C and retrofitting existing dams. Why not be allowed in on the run-of-river action, keeping it under provincial ownership and reducing the need for a profit to be turned?

    Question: if Hydro can produce its own power at $X… how is it a good deal for the province, BC Hydro, or ratepayers when Hydro has to spill their own water and buy IPP power at $X+ 50 to 100%? Hydro can’t sell it at the rate they buy it for, so someone has to make up the difference… or Hydro has to defer the debt. Blogger Norm Farrell pegs Hydro’s deferred debt at $5.5 billion. http://northerninsights.blogspot.ca/2015/09/financial-fraud-at-bc-hydro.html

    Finally, I am sure I have read that IPP projects have a shelf life, after which they are turned over to the province. You allude to this in your article, though you don’t spell it out. What are the details?

    Like

    • Looks to me BC needs to build a few nuclear power plants and change the goal to 2.0 degrees C, or maybe even 2.5 degrees C. Thats a bit more reasonable.

      Like

    • jmdesp says:

      People “seeing the light” when their power bill goes through the roof ? Well, why wouldn’t we start with *you* first triple or quadruple your electricity bill until you desperately search for a way to use less in order to still be able to pay your bills ? You would then find out that most of your significant use of electricity are not optional at all, or require big investments to reduce that you won’t have the money for given what you pay for the bill, catch 22.
      In Germany the solution they have found might be to use LED, something that everyone is already starting to do, but this doesn’t represent a lot of electricity at all ! What had a real large effect was to switch from electric heating to gaz, and the same for cooking, and also for hot water (still needs quite a bit of money for the change, so some people in social lodging that used electric heating just don’t heat them in winter and live in their apartment with many layer of cloth all winter). When compared to decarbonized electricity, this means an **increase** in GHG !

      Like

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