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Clean Energy BC News Release: February 3, 2012
For Immediate Release
Feb. 3, 2012
Vancouver, BC - The Clean Energy Association of BC (CEBC) today welcomed the BC Government's new natural gas and LNG energy strategies as good news with the potential to stimulate economic activity across the energy sector and generate new jobs and investment throughout the province in rural and First Nations communities.
“The BC Government's new natural gas and LNG energy strategies have the potential to stimulate economic activity across the energy sector on a scale comparable to the W.A.C. Bennett hydro developments of the 1960s,” said Paul Kariya, Executive Director of the CEBC. “BC’s clean energy producers strongly support the plan to use clean electricity as the preferred source for power in LNG production in order to maximize the environmental benefits of natural gas exports.”
While the government announcement did not include an estimate of the potential electrical demand from the gas sector at this time, a recent study prepared for the Canadian Wind Energy Association poses a “Mid-Case” demand for an additional 6,112 gigawatt hours by 2017 and 17,292 GWh by 2025 to service natural gas developments and new mines in northern BC. This compares with BC Hydro’s current total energy requirements of approximately 55,000 GWh per year.
CEBC recognizes the significant opportunity for First Nations to benefit from the growth of the natural gas and renewable energy industries. There already are 125 First Nations involved in the clean energy sector as developers, partners or suppliers and through impact benefit agreements.
“This is an unprecedented opportunity for BC First Nations to participate as key partners in the development agenda,” said CEBC Board Director Dr. Judith Sayers, former Chief Councilor of the Hupacasath First Nation and an experienced project developer.
“The CEBC will be pleased to work with BC Hydro, the BC Government, the natural gas sector and other key stakeholders government to develop procurement plans that maximize the benefits and minimize the costs of clean energy inputs to meet the forthcoming load growth,” Kariya said.
Realizing the Full Potential of The BC Jobs Plan, BC’s Natural Gas Strategy and BC’s LNG Strategy with Cost Effective, Reliable and Clean Electricity
The clean energy sector is an economic advantage for British Columbia. The sector provides a cost-
effective, dependable supply of clean electricity while creating jobs and new economic opportunities in rural and First Nations communities, our cities and throughout the province. The clean energy sector is poised to help government realize the full potential of The BC Jobs Plan for the benefit of all British Columbians.
Growing jobs and new economic opportunities in rural and First Nations communities
- BC's clean energy sector has created 18,000 person-years of employment to date. Many of these jobs are in rural and First Nations communities.
- The clean energy sector has invested more than $4.5 billion in our province's economy, while contributing over $378 million to government for public services – money that pays for our hospitals and schools.
- When the 27 projects in BC Hydro’s most recent power call are built, they will deliver another 3,800 person-years of construction employment and an additional $3.8 billion in capital investments across BC, including tens of millions in community spending.
- The 125 First Nations that participate in the sector through direct ownership, equity investments and various partnership arrangements are better off because of clean energy. Their involvement means new jobs and economic benefits that would otherwise not exist.
Realizing the full potential of The BC Jobs Plan
The electricity demand associated with development in BC's natural gas, liquefied natural gas (LNG) export and mining sectors is significant and will require a large new supply of electricity. This demand growth has not been seen in BC since the rise of the pulp and paper industry in the 1960s and 70s.
- Cost effective clean energy options can supply and meet the pending load growth from the new industrial and natural resource developments envisaged in The BC Jobs Plan and the BC government’s Natural Gas Strategy and LNG Strategy announced February 3.
- BC clean energy should be viewed as an integral part of the Jobs Plan both as a stand-alone job and investment driver as well as a valuable input that can help reconcile industrial
- While natural gas has a place in BC's electricity supply mix, there is a strong provincial interest to ensure that all relevant costs and benefits of the supply options available are fairly and fully compared.
- A fulsome assessment of the fuel supply options would include the full range of risks, costs and benefits across key evaluation criteria, including: tax revenues, employment, First Nations and rural community development, GHG implications, timelines, and marketplace requirements. A simple "cost of supply" comparison is insufficient to accurately assess the best option for industry, the economy and ratepayers.
- When natural gas is used to generate electricity there could be a reduction in government royalties as, depending on the generation option, there is no royalty payable on the natural gas used in fuel supply.
- Natural gas has price and GHG risk. BC Hydro’s own forecasts show both of these increasing over time. With new LNG terminals in BC and elsewhere, the price of natural gas in North America will go up which will increase the cost of generating electricity with natural gas.
- Fuel supply options have significant job implications. BC’s clean energy producers have potential projects distributed across the province. There is also a strong likelihood that clean energy solutions will create more jobs compared to other options like natural gas.
- Fuel supply options have significant GHG implications. There are potentially significant implications to the 93% clean electricity requirement of the Clean Energy Act and the 33% GHG reduction target by 2020 in each fuel supply option.
- Timeliness of supply is a critical issue. The private sector can play a constructive role in developing innovative partnerships and new processes to ensure the timely provision of fuel supply. Innovative procurement processes can reduce risk, provide investment certainty and mitigate ratepayer impacts, while transferring important aspects of electricity supply development to the private sector.
- Electrification, including transmission planning and construction, must be undertaken in a timely manner. Electrification plans should consider alternative funding models and the use of royalty programs to fund transmission infrastructure. The Northwest Transmission line serves as a potential reference point.
- Clean Energy BC understands that the current definition of self-sufficiency has raised stakeholder and public concerns respecting costs. Redefining self-sufficiency could deliver a small, short term savings for ratepayers. The Association supports an adjustment to the definition of self-sufficiency.
Good, fair, long-term value for money for BC’s ratepayers
BC’s clean energy producers provide good, fair and long-term value for money for BC’s ratepayers. Our electricity costs less, if not the same, as electricity generated by BC Hydro. It accounted for 2.6 per cent of BC Hydro’s proposed rate increase of 32 per cent over three years.
- In developing clean energy, the project development responsibilities, business risks and project costs are borne by the private sector, not the ratepayer.
- According to BC Hydro, the prices the utility pays clean energy producers are “at the lower end of the energy price ranges of other North American jurisdictions.”
- The cost of wind energy continues to go down.
- A new supply of electricity simply costs more than an old supply of electricity, whether it is generated by BC Hydro or a clean energy producer. Comparing the price of electricity from a new clean energy project to the price of electricity from one of BC Hydro's older dams is like comparing housing prices today with housing prices from the 1960s.
- BC Hydro locks clean energy producers into long-term contracts of over 20, 30 or 40 years to eliminate price uncertainty and risk for ratepayers. 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. Clean energy producers are building tomorrow’s low-cost generating assets today.
- The same principle was at work when WAC Bennett built BC’s large hydro dams. British Columbians paid the upfront capital costs and locked in the operating costs at a long-term and stable price that later generations enjoy today, at low cost.