Throughout the first decade of the 2000s, British Columbia experienced the growth of a new industry – the independent power producer.
Based on a power call from BC Hydro, at the direction of the provincial Liberal government and its 2002 BC Energy Plan, independent power producers raised and spent billions in B.C. to build new wind farms and run-of-river hydro projects.
BC Hydro ended up buying $16 billion worth of power on long-term purchase agreements -- agreements that were later criticized by the NDP government as too lavish.
The private power bonanza gave rise to B.C. companies like Finavera Wind Energy and Alterra Power, both of which were eventually acquired by other companies.
The bonanza ended a decade ago, however, after the Site C hydro-electric dam was sanctioned and BC Hydro determined it would not need any more private power for the foreseeable future.
Many independent power developers left B.C. for Alberta, Saskatchewan and the U.S. Some may now be lured back to B.C., as a new power call now expected from BC Hydro next year stokes a mini renaissance for the private power sector.
This time around, First Nations are likely to be bigger players, as the B.C. government is earmarking $140 million for First Nations to participate in new renewable energy projects. And whereas run-of-river dominated the last power call, wind power is likely to dominate the next power call, simply because it has become so much more cost-competitive.
British Columbians may recall that, when the previous Liberal and the current NDP governments were still wrangling over Site C dam, one of the most compelling arguments against it, from an economic standpoint, was that the power was not needed. Industrial demand for power had fallen, thanks in part to the shuttering of pulp mills, and it was argued that the dam would produce way more power than B.C. could ever use.
As recently as December 2021, BC Hydro was forecasting in its Integrated Resource Plan (IRP) that it would not need any significant amounts of additional power – a forecast that changed quite suddenly with an updated IRP in June.
Now, BC Hydro says it could be in a power deficit as early as 2030, if it doesn’t come up with about 4,000 gigawatt hours (GWh) of clean electricity.
What’s mainly driving this sudden change in load forecast is the B.C. government’s plan to electrify the LNG and natural gas sector, as per the new Energy Action Framework, announced in March.
That will undoubtedly raise concerns about who will ultimately pay for the billions of dollars worth of new power contracts – industry or average BC Hydro ratepayers.
“These issues may be the subject of questions and submissions before the BC Utility Commission in efforts to defend ratepayer interests,” said David Craig, executive director of the Commercial Energy Consumers Association of BC.
BC Hydro thinks it can secure about 900 GWh of clean power simply by renewing contracts with existing independent power producers that are close to expiring.
But it estimates it will also need another 3,000 GWh in new “greenfield” power. That’s about one-third of what BC Hydro acquired under the last power call in the early 2000s (about 9,500 GWh), and a little over half the capacity of Site C dam (5,100 GWh).
Juergen Puetter, a wind power pioneer and CEO of Aeolis Wind Power, is guardedly optimistic over the latest power call, though he believes BC Hydro is being too conservative and may have to revise its load forecast upwards.
“It’s clearly something we have been waiting for for 15 years,” Puetter said. “Finally, there’s an opportunity here that wasn’t there before. We also expect BC Hydro will revise their requirements for energy upward quite considerably.”
Whereas run-of-river developers were the big winners under the previous power call, Puetter and others believe wind will be the big winner this time around. Whereas the capital costs of run-of-river haven’t changed, the cost of wind turbines have come down significantly.
Generally, Clean Energy BC estimates the capital costs of solar power to be $2 million to $3 million per megawatt (MW), wind $3 million to $4 million per MW, run-of-river $5 million to $6 million and geothermal $10 million.
New wind projects built in B.C. are also likely to feature larger, higher capacity wind turbines, as technology has evolved since the last build-out of wind farms, with wind turbines now featuring higher towers and longer blades that bump generating capacity.
The Moose Lake wind farm that Puetter's company co-developed in Northeastern B.C., for example, is small in scale (just four turbines), but uses the largest onshore wind turbines yet developed -- the German-made Enercon E-123, which can have capacities of 7.6 MW per turbine, compared to earlier generation turbines with capacities of 2 to 3 MW.
The capital cost of solar power have also come down, but Puetter said the prospects for solar power aren’t great in B.C., and notes there is little appetite in B.C. for another large hydro-electric project like Site C dam, leaving wind power the most likely one to dominate the next power call.
“We think the only real major source – and that’s what BC Hydro says too – is wind,” Puetter said.
Wind power currently makes up only about four per cent of B.C.’s total electricity generation. Even if wind power developers capture only two-thirds of the next power call, Puetter said 2,000 GWh of power from wind would require about six new wind farms the size of Aeolis Wind Power’s Bear Mountain park, which has a nameplate capacity of 104 MW.
Craig agrees that wind will likely dominate in the next power call.
“Big commercial utility wind power has come down the cost curve dramatically,” he said. “The options for dealing with its intermittent nature are increasingly becoming available and cost effective.”
He added that BC Hydro’s own updated integrated resource plan suggests BC Hydro will likely lean into wind.
“The call for 3,000 (gigawatt hours per year) of power will likely be open to all sources, but evidence makes it clear that wind power options, and not run-of-river, are more likely to be the cost-effective solution for BC Hydro” Craig said.
Cole Sayers, executive director for Clean Energy BC, agrees.
“BC Hydro has said that it’s open to all technologies, but given where current capital costs are, wind and solar are very cost competitive, whereas run-of-river hydro is probably twice as much as wind and solar,” Sayers said. “In the last call, wind and solar weren’t where they are today in terms of costs.
“BC Hydro has indicated they want utility scale projects in this new call, so those are pretty large. There is really good wind resources in the northeast. It is very possible to get the entire 3,000 gigawatt hours from wind projects in the northeast.”
There are several prime wind assets ready for development -- mostly in the Peace region of northeastern B.C. -- that were in various stages of permitting before they were cancelled in 2016, after it became apparent BC Hydro would build Site C dam and would not be issuing a second major power call.
Interestingly, the most recent submissions to the BC Environmental Assessment Office (EAO) for new renewable energy projects isn’t for wind power, but solar.
Canadian Solar recently entered the BC EAO process with the filing of initial project descriptions for a 100-megawatt solar project near Merritt (the Aspen Solar project) and a 150-MW solar park near Ashcroft (Highland Solar). Both projects include battery storage of 400 MWh (Aspen) and 600 MWh (Highland) respectively.
Puetter doesn’t think solar projects stand much of a chance in B.C., where latitude and climate make it less efficient than wind power.
Sayers agrees solar could have a hard time competing with wind in B.C.
“There are other things, but they’re not as competitive and ready to go as wind in the northeast,” he said.
(This story originally cited Clean Energy Canada as a source. It has been corrected to cite Clean Energy BC.)
