Powering the future
BC Hydro must cut its greenhouse gas emissions but continue to meet the province's growing power needs, which means choosing either natural gas or electric power as a main fuel source. Both have their supporters. Both need major investment. Both demand a commitment that will be difficult to break. So ... which will it be?
VICTORIA -- In Whistler, green energy comes in turquoise, the colour of a new pipeline running alongside the Sea to Sky Highway. This week, a crew was laying the final 160 metres of the 50-kilometre line. By April, it will be bringing natural gas to Whistler, allowing residents in the resort community to switch their 14,000 propane appliances to run on a cleaner fossil fuel.
In Hecate Strait off the Queen Charlotte Islands, clean energy will be white. It is the only colour option for the wind turbines that are on order. The groundwork for Canada's first offshore wind energy project is laid, not yet in bricks and mortar, but with a partnership agreement this week between NaiKun Wind Development and the Haida Nation. The rotors, 107 metres across, are expected to be spinning their contribution to the electricity grid by 2013.
Natural gas or electric power: Which holds the key to B.C.'s future?
In the face of ever-increasing demand for energy, B.C. must cut greenhouse-gas emissions by one-third of current levels by 2020. That squeeze has produced a quiet power struggle as the two biggest players in the domestic energy market - the people who heat and light homes and businesses - lock horns over territory.
The B.C. government's climate-change directive demands a fundamental change in the energy system that will take years to plan and execute. The province has an abundance of carbon-free energy in the form of hydroelectric power, but it isn't enough to meet even today's needs, much less the future's. B.C. also has a wealth of natural gas that will continue to offer a prime source of energy.
The first public shot in this debate appears to have been fired by Randy Jespersen, CEO of Terasen Gas, speaking at a business luncheon last November.
"My mother always told me that those who live in glass houses should cast no stones," he said as a prelude. Then he set out to demolish the energy plans of his company's chief rival, BC Hydro.
"My suggestion is not so much whether there is forecast error," he told the crowd, "but rather that we understand the consequence of forecast error."
Both utilities must file their forecasts with their regulator, the B.C. Utilities Commission, to ensure that these key services are adequately planning for the future. They should offer a glimpse at the future of energy consumption in British Columbia.
But BC Hydro, Mr. Jespersen argued, isn't calculating for a green future because it has understated the future demands for hydroelectricity. If he is correct, it is a miscalculation that could lead to higher rates, missed emission targets and increased reliance on dirty energy imports.
To advance his case, Mr. Jespersen projected key sections of BC Hydro's own long-term power acquisition plan on a screen for his audience.
That document, which is now before the BCUC for approval, does not account for the potential impact of increasing prices of fossil fuels, which may encourage consumers to switch to electric power. Nor does it fully account for the B.C. government's climate-action plan. It calls for the electrification of truck stops, ports and oil and gas facilities, and it encourages electric vehicles.
What if Mr. Jespersen is right, BC Hydro's CEO, Bob Elton, was asked in a recent interview.
"If he or other people are right and the loads are higher than we think, we track that all the time," he said. "So let's say the recovery is sharper than we expect, and let's say also that some of this fuel switching happens more quickly. There would be indications of it, we would have time to go back and say we need more."
Mr. Jesperson's critique was not an idle sideswipe. His company is competing with the notion that BC Hydro holds the solution to clean energy in the future.
"We need integrated thinking that will use the right energy form for the right application," the natural gas executive said in an interview.
Communities such as Whistler have been persuaded that natural gas is part of a sustainable future. "What is taking place now is all of the rules of play are being written and it's important that there is a willingness to look at all emissions on a net basis," Mr. Jespersen said. "There is no room for fiefdoms with greenhouse gases."
WILL CONSUMERS GO GREEN?
There is no shortage of ideas to supplement and conserve energy. Smart meters in homes. Electric cars in driveways. Tidal currents pushing turbines off Vancouver Island's shores.
The City of North Vancouver is working on a 100-year plan to produce local green energy. The changes are coming one neighbourhood at a time. This spring, a dark array of solar hot-water panels on the roof of the library will be ready to harvest emissions-free energy. In the meantime, a mini-plant provides heat for the building and surrounding neighbourhood with natural-gas-fired boilers.
Policies can change choices, but consumers still shape the market.
Harry Grimm has been in the housing construction industry for 20 years. He's a principal in Portrait Homes, which is currently building a 500-home development in Maple Ridge.
"To me, the game right now is affordability," Mr. Grimm said. The subdivision boasts ecological features that added to the cost of building each unit, but customers are not willing to lay down big bucks for the environment. "They say they like the green space, but if you say, 'It will cost you an extra five thousand dollars,' people say, 'I'd sooner have the granite countertop.' "
In the higher-end homes, he is installing electric hot-water tanks and natural-gas furnaces, but in most multifamily units, the heating is all electric baseboard.
That represents a new trend and one that might have Terasen Gas worried. But the company is building for the future, with two pipeline projects, including the Whistler initiative. As well, it is constructing a $190-million, liquefied natural gas storage facility on Mount Hayes, outside Nanaimo, for its Vancouver Island customers.
BC Hydro's investments are largely absorbed in maintaining its crumbling infrastructure. The corporation is still mostly running on the megaprojects of the 1960s and 70s - held together with "tape and twine," as one official recently put it.
For example, just east of Cranbrook, workers are rebuilding the Aberfeldie Dam, tearing out wood sluices dating back to 1922. When it's completed, the dam will produce five times as much hydroelectric power as before.
For seven of the past 10 years, BC Hydro has failed to produce enough electricity to meet domestic demand. On average, it is importing 10 to 15 per cent of its energy on a net basis, and much of its imports come from "dirty" sources including coal and natural gas located across the province's borders.
As a result, the power coming out of the electric socket is not as clean as one might think. About 17 per cent of BC Hydro's power is produced with fossil fuels.
As part of the province's green energy agenda, BC Hydro has been ordered to wean itself off electricity imports by 2016. Until then, BC Hydro can rely on the markets for shortfalls. After that, it will need additional supplies. It has not decided what those resources will be.
$6-BILLION DAM TOUTED
Many of the "go green" initiatives being touted to reduce B.C.'s greenhouse-gas emissions involve switching from fossil fuels to electricity.
A few weeks ago, BC Hydro participated in an event on the front driveway of the legislature. The B.C. government announced it is converting 34 vehicles into plug-in electric vehicles. A spokesman for the utility was there, enthusiastically speculating that up to 60 per cent of new vehicles on provincial roads by 2025 could be hybrids or fully electric vehicles.
University of Victoria professor Andrew Weaver is one of the world's leading authorities on global warming and climate change. He's also a member of B.C.'s Climate Action Team, helping shape government policy and, he hopes, the future of green energy in B.C.
He is no fan of switching to natural gas as a path to a greener future: "The only solution, to be perfectly blunt, is to go carbon neutral." And the only way to do that, he said, is for BC Hydro to get back in the business of mega-projects. "They should be carving out their niche with the Site C dam," he said.
That option has been on the drawing board for years and now comes with a price tag in excess of $6-billion. It would be built on the Peace River, just southwest of Fort St. John, and would produce enough electricity to provide power for nearly half a million homes.
"I cannot see what is stopping Site C," Prof. Weaver said. "There are environmental consequences, yes, but there are environmental consequences for everything we do and we have to stop using the atmosphere as an unregulated dumping ground."
Mr. Elton was non-committal about Site C. And while he wouldn't take the bait on the gas-versus-electricity debate, he urges consumers to conserve.
British Columbians, in terms of electricity consumption, are gluttons, having enjoyed cheap electricity for decades. There's been little incentive to unplug and switch off. Buried in BC Hydro's long-term plan, however, is a secret weapon: a promise of massive rate increases that may finally make a dent in habits.
"I hope consumers will enjoy that over the next 10, 20 years their bills won't go up," Mr. Elton said. Not because rates won't climb - they will - but because people will learn to use less.
"If we worked in the greenest offices and lived in the greenest homes, we would be consuming far less," he said. "That's the way to go."
THE ECONOMY'S EFFECT
In early October, Bob Elton, CEO of BC Hydro, found himself before the corporation's regulator, the British Columbia Utilities Commission.
At the hearing, a lawyer put him on the spot about the utility's forecasting: "Let's just assume, for the sake of argument, that we're on the front end of a recession which will be felt in British Columbia. ...What kind of implications would that have for BC Hydro's priorities?"
Very little, Mr. Elton replied: "There have been significant ups and downs in this province in the last 40 years. The difference it makes to electricity consumption is not as much as you think."
By December, BC Hydro changed its corporate mind. It announced it would cut its call for green-energy proposals from independent power producers by 40 per cent. The reason? The slowdown in the economy.
Two weeks ago, it offered another revision: "Even this large range [of forecasts] may not necessarily capture all of the uncertainties inherent in possible future demand for electricity," the corporation told its regulator. "BC Hydro does not want to limit its opportunities to acquire cost-effective renewable power."
In a recent interview, Mr. Elton was rather sour on the whole forecasting business.
"If you could get three people in a room agreeing on forecasting right now, I'd like to meet them," he said.
BC Hydro's long-range planning document explains, without apparent irony, that it uses a Monte Carlo model for its forecasts. Presumably, it is not referring to gambling, but to a device designed to negotiate the uncertainty of economic activity, weather and electricity rates. The document selects a mid-range forecast based on the model, and assures the BCUC that it will watch for further developments.
The cut to BC Hydro's green-energy call was poorly received in many quarters, including then-B.C. energy minister Richard Neufeld. Mr. Neufeld, who has since left his post for a Senate appointment, said the corporation needs to build for the future - and it needs to start now.
"You don't start building on Monday and finish on Friday," he said in an interview. "I think too many people think you can build this stuff fast."