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BC’s Clean Electricity Same Price as BC Hydro’s New Electricity - Clean Energy Producers Respond to Review of BC Hydro panel report
FOR IMMEDIATE RELEASE
September 7, 2011
BC’s Clean Electricity Same Price as BC Hydro’s New Electricity
Clean Energy Producers Respond to Review of BC Hydro panel report
Victoria, BC – BC’s clean energy producers say that the electricity they produce costs less, if not the same, than new electricity produced by BC Hydro, while providing good, fair and long-term value for money for BC’s ratepayers.
That is the message delivered today by the Clean Energy Association of British Columbia (CEBC) in response to the recent Review of BC Hydro panel report.
“While we appreciate and support the work of the BC Hydro Review panel, British Columbians need apples to apples comparisons when it comes to the price of clean energy, a critical commodity for our economy and quality of life,” said Paul Kariya, CEBC’s executive director. “BC’s clean energy producers provide good, fair and long-term value for money for BC’s ratepayers. The reality is that new electricity generation costs more than old electricity, whether it is from clean energy producers or BC Hydro.”
According to the panel report, clean energy producers contract with BC Hydro at a price of $124/MWh, which is an “all-in estimated cost” in today’s dollars for a premium, fixed price clean electricity product over 20, 30, or even 40 years. The average plant gate price payable to clean energy producers is about $100/MWh.
However, the actual average price paid for electricity from clean energy producers over the past 20 years is $64/MWh, as noted by BC Hydro in the utility’s 2010 Annual Report.
By locking clean energy producers into long-term contracts, BC Hydro can hedge against market fluctuations and eliminate price uncertainty for ratepayers. Thus, clean energy assets being built today are tomorrow’s low-cost heritage assets. The cost of their electricity in 20, 30 or 40 years will be much lower than the cost of new electricity that will be generated at that time.
CEBC is also cautioning the province on the panel report’s recommendation that the definition of self-sufficiency be changed from critical water to average water for planning purposes. The CEBC, however, feels it may be time to look at eliminating the 3,000 GWh insurance requirement, as per the panel’s recommendation.
“Market conditions have fundamentally changed,” Kariya said. “We fully support the need to keep costs down for the ratepayer, and believe it may be prudent to consider the elimination of the 3,000 GWh of insurance in the self-sufficiency definition. However, it is crucial for ratepayers and our economy to continue to define self-sufficiency based on critical water, not average water.”
Maintaining the definition at critical water will not produce any short-term rate increases, and will result in long-term cost savings for the ratepayer. Conversely, redefining the definition of self-sufficiency from critical to average water creates significant economic risks for the province, and in particular specific industries the government intends to grow, such as natural gas production, LNG exports, mining and the green economy.
The alternative to generating electricity from BC resources – through BC Hydro or clean energy producers – is importing it from the United States through the spot market. However, BC Hydro’s own Mid-C price forecast (in real 2010 $US/MWh) from April 2011, predicts the spot market will rise 50 per cent by 2020 and 100 per cent by 2028.
“An increasing reliance on the spot market is not a sustainable long-term environmental solution,” said Andrew Weaver, one of the world's foremost climate scientists and UVIC Professor of Earth, Ocean and Atmospheric Sciences. “Spot market power is dirty power from coal plants and runs contrary to BC’s climate action objectives.”
“Clean electricity produced by Canadian companies like Innergex is good value. In fact BC Hydro’s purchases of clean energy accounted for only 2.6% of BC Hydro’s originally proposed rate increase,” said Graham Horn, Vice President of Corporate Affairs, Western Region, Innergex Renewable Energy Inc. “Along with BC Hydro, clean energy producers are building tomorrow’s low-cost heritage assets today. We are providing a dependable supply of cost effective clean electricity that creates jobs in BC.”
To date, clean energy producers’ existing operations have created 18,000 person-years of employment in BC; these jobs are often in First Nations and rural communities. The sector has contributed more than $2 billion to the provincial economy, and $378 million to government revenue for public services – money that pays for our hospitals and schools. The 27 projects in the Clean Power Call represent 3,800 person-years of employment during construction and $3.8 billion in capital investment across the province.
“These clean energy projects are an economic advantage for BC’s First Nations,” said Judith Sayers, UVIC adjunct Professor of Law and Hupacasath First Nation member. “Over 125 BC First Nations are involved in the clean energy sector through direct ownership, equity investments and partnerships arrangements. Clean energy has opened the door to a better economic future and greater opportunities for First Nations.”
For further information:
NATIONAL Public Relations
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