BC SUPPLY GAP: A REDEFINITION OF SELF-SUFFICIENCY32nd USAEE/IAEE Conference, Anchorage AK

July 29, 2013

2

Introduction

Paper examines an alternate solution to meeting British Columbia’s electricity needs given the legislated constraints within the Clean Energy Act.

3

British Columbia Bulk Power System

GM Shrum and Peace Canyon

Mica and Revelstoke

Hydroelectric 10,259 MWThermal 1,086 MW89 EPAsTwo Interties – AB and US

4

BC’s Firm Energy Capability Load Resource Balance

F201

2

F201

4

F201

6

F201

8

F202

0

F202

2

F202

4

F202

6

F202

8

F203

00

10,00020,00030,00040,00050,00060,00070,00080,000

Existing and Committed SupplyPlanned Resources2011 Mid Load Forecast After DSM without initial LNG

(year ending March 31)Fir

m E

nerg

y C

ap

ab

ilit

y (

GW

h)

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Legislated Constraints

(a) Achieve electricity self-sufficiency(b) Utilize DSM to reduce expected demand by 66% by

2020(c) Generate 93% of electricity in BC from clean or

renewable energy(d) Keep electricity rates amongst the lowest in North

America(e) Reduce GHG emissions by 33% below 2007 levels(f) Become a net exporter of electricity from clean or

renewable resources(g) Achieving these objectives without the use of

nuclear power

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Electricity Supply Resources

Power Smart (demand-side management program); Heritage Hydro (existing hydroelectric units and the proposed

Site C facility); Heritage Thermal (existing thermal units); Resource Smart (upgrades to existing heritage hydro

facilities); Downstream Benefits (the Canadian Entitlement from the

Columbia River Treaty); Non-Firm/Market Imports 2,500 GWh allowance, and Electricity Purchase Agreements (EPAs) with IPPs. Of these seven mechanisms, only three (Power Smart,

Resource Smart, and EPAs) are able to increase energy supply in the future given the policy constraints that currently exist within the province.

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Unit Energy Cost at Busbar

Mid

-C M

arke

t Pric

e

Biog

as

Geoth

erm

al

Site

C

Cogen

MSW

Onsho

re W

ind

Woo

d Ba

sed

Biom

ass

Run-o

f-River

Offshor

e W

ind

$0.00$100.00$200.00$300.00$400.00$500.00$600.00$700.00

$/M

Wh

Average price given by with range of costs given by the vertical black line

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Import and Export Revenues

Exports Imports$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

$400,000,000

Washington California Others

$ (

million

s)

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Price of Electricity in U.S Markets

($/MWh)

Mid Columbia NP15 SP15 Palo Verde

Min $0.49 $21.00 $21.50 $19.55 Max $108.81 $81.23 $72.67 $71.73 Average $30.72 $37.34 $37.50 $35.18

In the BC Hydro 2013 Annual Report, the market price forecast for electricity in 2014 is $29.23/MWh

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Conclusion

Remove electricity and replace revenue in definition of self-sufficiency

Revenue self-sufficiency would require export revenues to exceed import costs

Allows profitable trading activity to maintain low rates reduce the need for expensive EPA

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Reference:

Sopinka, A. and Pitt, L. (2013). British Columbia Electricity Supply Gap Strategy: A Redefinition of Self-sufficiency, The Electricity Journal, Volume 26, Issue 3, pp. 82-88, http://dx.doi.org/10.1016.03.003

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Updated cost of generation options