This publication is meant to help owners, employers, and workers understand the health and safety requirements related to power production in British Columbia. You may also find some of the information in this publication useful if you’re a prime contractor, supplier, or supervisor.
This publication doesn’t replace the Workers Compensation Act or the Occupational Health and Safety Regulation. It’s not intended to explain all the health and safety requirements that apply to power production in B.C. Owners, employers, contractors, and supervisors should always refer to the Act, the Regulation, and applicable guidelines for specific requirements that apply to their operations and work activities.
This publication was developed by WorkSafeBC and Clean Energy BC (CEBC). CEBC’s goal is to develop a viable power generation and power management industry in B.C. that serves the public interest by providing cost-effective electricity through the efficient and environmentally responsible development of the province’s generation and transmission resources and facilities.
Information Bulletin: Issued March 21, 2019
On February 14, 2019 the Minister of Energy, Mines and Petroleum Resources issued a report that the Ministry had commissioned entitled, Zapped: A Review of BC Hydro’s Purchase of Power from Independent Power Producers.
Zapped was a political document designed to make news headlines by alleging an over spending of $16 billion dollars over 20 years; however it was based on inaccurate information.
The Clean Energy Association of BC (CEBC) has prepared a thirty page report that debunks Zapped’s allegations mainly by using statements and statistics from BC Hydro. The report counters the misrepresentations embedded in the calculation that Zapped used to make its $16 billion overspending claim.
The CEBC report debunks Zapped’s three overall allegations that, starting in 2007:
- BC Hydro bought too much energy,
- BC Hydro paid too much for the energy it bought
- Undertook these actions at the direction of the Government.
The surplus energy that does exist today is not large, it was not intentionally created by the previous government, and was not forced upon BC Hydro. The amount of energy BC Hydro purchased from Independent Power Producers (IPPs) a decade ago was based on its own forecasts made before the utility and other forecasters recognized the economic impact of the global financial crisis of 2008-09.
Beginning in 2008 and based on rising load forecasts, BC Hydro issued Calls for Power that were to be supplied by the IPP projects that submitted the lowest priced bids. The volume of power that was purchased was based on BC Hydro’s forecasts that rising BC power demand would continue to grow at the same strong pace as it had for the previous several years.
Between January 2009 and August 2010, BC Hydro had signed Electricity Purchase Agreements (EPA) with the lowest cost IPPs that bid into the main Calls for Power. Almost no economic forecasters foresaw the depth or duration of the impacts of the 2008/09 global financial crisis on electrical loads. By the time the impacts to the BC resource sector and the drop in power consumption was fully understood by BC Hydro, construction had started on the IPPs that had received EPAs from those Calls for Power.
BC electricity demand increased slowly after the crisis, only returning to the previous 2008 levels in 2017. During those 10 years, BC was a net exporter for 4 years. While Zapped claims that BC exported 95,000 GWh, BC Hydro records show 15,500 GWh – one-sixth the amount.
For the next 10 years, from 2019 to 2028, Zapped estimates that the surplus of IPP energy will be 95,000 GWh. But BC Hydro’s most recent 10-year forecast shows that, after deducting Site C energy, the total net surplus of IPP energy will be 8,000 GWh – one-twelfth the amount estimated by Zapped.
For the 20 years upon which Zapped bases its $16 billion overspend allegation, the surplus energy from IPPs is 23,500 GWh, or only one-eighth of the 190,000 GWh estimated by Zapped.
Price of Energy Purchased
Zapped’s misinformed assertion that the “value of all energy is Mid-C” (the spot market price of importing energy from the USA) is not used by energy experts procuring new electricity supply. Since 1989, BC Hydro has bought energy through long term contracts that contain price certainty for ratepayers. In 2006, BC Hydro executives stated that purchasing from the spot market was accepting too much volatility. Recently, the government approved BC Hydro constructing its Site C Dam project rather than having it purchase more power from Mid-C.
While the price of renewable energy has dropped in the last 10 years, at the time the EPAs were awarded to IPPs, BC Hydro’s own reports stated that the price of energy was cost-effective.
Wind turbine costs have dropped over 60% and their performance has improved. Solar is seeing similar declines in cost and advancements in technology. Also, in the years since the 2008/09 financial crisis, the interest rates charged to finance wind, solar and hydro projects have dropped substantially. These renewable energy projects in select BC regions are now the lowest cost supply option.
Direction of the Government
The BC Liberals’ 2007 Energy Plan was not created with “the intent to create the appearance of an energy shortfall.” In 2007, after several years of high net imports and strong domestic load growth, the Energy Plan set a goal of self-sufficiency by 2016. This was supported by BC Hydro executives stating to the BCUC, in 2006, that the net imports were too high as they had reached 18%, and recommending replacing imported energy with long-term contracts with IPPs in B.C.
The 2007 Energy Plan’s policy direction to use the Burrard Thermal Generating Station less and to close it by 2016 was to save money and reduce GHG emissions. It consumed 25% more fuel than average gas-powered plant thereby increasing fuel costs, carbon taxes and GHG emissions by that same amount.
The previous government did not force BC Hydro to sign IPP contracts after the decrease in energy demand from the financial crisis was known. In 2010, BC Hydro (and other utilities) were still forecasting significant demand growth. By August 2010, BC Hydro had already signed the IPP contracts that resulted from the Calls for Power.
First Nations Benefits from IPPs Ignored
The Zapped report also ignores the benefits IPP projects have provided to First Nation communities. Thirty First Nations are involved in 78 operating IPP projects all over British Columbia. Almost all the IPP projects that were developed as a result of the BC Hydro EPAs have benefit agreements with local First Nations.
Through those benefit agreements, IPPs are delivering significant annual royalty payments and, in many cases, equity ownership in operating facilities. Those projects employed hundreds of Indigenous construction workers and currently employ many First Nations in permanent operating jobs, providing a legacy in remote communities where few other opportunities exist.
IPPs are not costing BC ratepayers an extra $16 billion
In conclusion, BC Hydro’s data does not support Zapped’s allegation of a $16 billion overspend. Zapped’s estimate of the over-purchased volume is eight times more than BC Hydro’s historical record and forecasts of net exports from surplus IPP energy. Zapped’s theory of Mid-C overcharging is irrelevant to the pricing of new projects energy and is not used by BC Hydro or any other utilities in regulated markets.
At no time during the writing of his report did Zapped’s author contact CEBC or any of its members to determine if his report was factually correct.
It is important to have a fair and factual debate when discussing important issues that impact affordability for all British Columbians. It is in that vein that CEBC has prepared the Zapped response report. It contains over 60 references, including over a dozen from BC Hydro testimonies and reports to the BCUC.
For more information contact CEBC office at 604-568-4778 or email email@example.com
Thank you to everyone who tuned into our Electrification of BC webinar.
The slides from the presentation can be found here as a PDF .
If you are interested in reading the paper that was released in October 2018, the report can be found here.
Clean Energy BC focused on three main areas of electrification through transportation, built environment and industry. For this webinar, we were lucky enough to be joined by the following presenters who spoke to their expertise.
Clean Energy BC Board of the Chair, Martin Mullany of Bridge Power
Built Environment: Heat-pumps
Clean Energy BC member, Ron Monk of KWL
Clean Energy BC 2018 Distinguished Service Award Recipient, Richard Harper of WSP
Industry : Upstream
Clean Energy BC Board Member, Steve Davis of Steve Davis & Associates
We are confident that low-carbon electrification will play a key role in reaching the targets set by Government of BC’s targets in CleanBC.
Through the release of the Electrification of BC white paper, our organization secured over 30 meetings with government, NGOs and industry associations. We are advocating for alignment of our climate targets with energy policy.
Clean Energy BC is an industry association, we represent a unified voice for the clean energy sector. Our membership ranges from renewable energy operators, developers, service providers such as lawyers, financiers and environmental consultants, as well as academic institutes and 12 First Nations.
We will post a synopsis and summary response to all of the engaged questions we received during the webinar. If you have more in-depth questions, contact information can be found on the last slide of the PDF presentation. Please return to this post to find our summary response in the near future.
We are ecstatic to be hosting our upcoming conference in Trail, BC Powering Generations: Legacy to the Future from June 3rd– 5th.
If you are interested in getting updates straight to your inbox, sign up for our newsletter here.
On December 18th, 2018 five new wind power projects were awarded contracts to supply electricity to Albertans for a record setting low price of $39/MWh. That is less than half the price of wind contracts awarded nine years ago when BC Hydro last contracted with large wind projects in BC.
“The cost of wind turbines has dropped over 70% in the last ten years,” said Jae Mather, Executive Director of Clean Energy BC. Prices for wind power contracts awarded in other power contract competitions in Saskatchewan and Alberta over the last 12 months were around $39 MWh and $45/MWh, respectively.
“This program is an important entry point into Alberta’s renewable energy sector, providing much-needed revenue streams and employment opportunities for First Nations while generating economic and environmental benefits for the province as a whole … we believe the knowledge gained will lead to even greater success for First Nations in the future.”
— Guy Lonechild, CEO, First Nations Power Authority
The five new Albertan projects will supply a total of 760 MW – enough to power nearly 300,000 homes. The companies behind the projects will invest $1.2 billion and create about 1,000 jobs. Three of the wind projects are private-sector partnerships with First Nations, which include a minimum 25% Indigenous equity component.
The contracts resulted from the latest competition held under the Alberta government’s Renewable Electricity Program. The power price is set and capped for the entire 30 years of each contract. If the project experiences and cost over-runs they are absorbed by the companies’ shareholders and are not passed through to electricity customers.
“We are extremely pleased to be investing in Alberta with our partner, the Sawridge First Nation. The development, construction, and operations of the Buffalo Atlee Wind Farm will provide significant environmental benefits, create jobs, drive local economic activity, and deliver excellent value to Alberta ratepayers. We look forward to completing this exciting project in Alberta, which has become a destination of choice for renewable energy investment.”
— David Eva, Chief Executive Officer, Capstone Infrastructure Corporation
The last time BC Hydro contracted for power from large wind projects was in 2009. Since then there has been a dramatic drop in the cost of producing wind power.
Low wind power prices are good news for the CleanBC program announced on December 5th by the BC government. CleanBC aims to reduce emissions by substituting clean electricity for fossil fuels throughout industry, buildings and transportation. “CEBC estimates over 30,000 GWh of new renewable electricity will be required to meet CleanBC’s emission-reduction targets,” says Mather who further adds “These recent low wind prices in next door Alberta are good news for BC ratepayers.”
“EDF Renewables is very pleased to be investing in Alberta, which, thank you to this government’s commitment, has made the province one of North America’s most competitive and successful markets for renewable energy. We’re proud to be partnering with the Kainai First Nation (Blood Tribe) on the Cypress Wind Project. It will create hundreds of well-paying jobs, invest millions into Cypress County and Alberta’s economy, while generating affordable renewable electricity for Albertans.”
— Cory Basil, VP Development, EDF Renewables
More info on the Alberta Wind Awards can be found here.
Electrification of British Columbia: Assessing the Economic and Environmental Benefits of Extensive Electrification in BC.
This white paper is now officially released as of Tuesday October 16th, a PDF version is available for download here.
A shorter version is also available, Electrification of BC White Paper Briefing.
Additional research for the white paper can be found linked within the PDF document or by clicking here.
CEBC Board Member Judith Sayers was one of 10 contributors to a paper on the National Energy Board and the concept of social licence both within energy projects and generally.
Renewable Energy Producers Inject Billions into the Province, Report Finds
FOR IMMEDIATE RELEASE: April 14, 2016
British Columbia’s clean power producers have invested more than $8.6 billion in First Nations communities and local economies—including those hit hard by the recent collapse in global commodity markets—while fighting climate change and creating thousands of jobs.
That’s the key takeaway of a new Clean Energy BC assessment, Local Legacies: How Clean Power Producers are Building the Green Economy and Strengthening Communities Across British Columbia. The report finds:
- British Columbia’s clean power industry has attracted more than $8.6 billion in investment, and the money is spent in local economies, including the province’s north and interior regions.
- The sector has to date supported 15,970 direct, full-time equivalent person years of construction employment in every region of the province—with another 4,543 FTE person years of employment in the works on forthcoming projects.
- Renewable power companies now employ 641 people in operational roles around the province. Projects now under construction will support an additional 165 such positions once online.
- 25 percent of BC Hydro’s energy supply comes from independent power producers, of which 14 percent is provided by stand-alone clean-energy producers.
also details how First Nations participate in renewable energy projects, through impact benefit and revenue sharing agreements, employment, training, procurement, and more.
“Over the course of a decade, clean power producers have forged deep relationships with indigenous leaders, innovated made-in-B.C. solutions to protect ecosystems, and breathed new life into struggling communities all over the province,” said Paul Kariya, executive director of Clean Energy BC.
“We’re proud of that work, but our members are now ready to create a new legacy by powering the green economy of the future. If the provincial government heeds the advice of its own Climate Leadership Team, then we’re going to need plenty of clean electricity. We’re ready to deliver the goods.”
About Clean Energy BC
The BC Clean Energy Association represents 160 members who develop and operate reliable, responsible and affordable clean and renewable energy projects in cooperation with BC Hydro. A dozen First Nations are also members of the private-sector industry association.
Contact: Paul Kariya, Executive Director
The B.C. First Nations Clean Energy Toolkit was prepared by Kekinusuqs, Judith Sayers for the B.C. First Nations Clean Energy Working Group in November 2015.
” This toolkit is designed to assist First Nations in understanding the kinds of clean/renewable energy there are, how to begin looking into doing a clean energy project, pre-feasibility, feasibility, developing, financing, relationship building, opportunities, and where to find resources.”
Our London Economics 2014 study looks at the cost-effectiveness of our clean energy and Site C. The 49-page PDF linked here is our report from London Economics International, on the cost-effectiveness of our clean energy and Site C.
It shows private clean energy could save British Columbians $750 million to $1 billion during the 70-year “economic life” of Site C.