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Policy Note

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Policy Note delivers timely, progressive commentary on issues that affect British Columbians, including the economy, poverty, inequality, climate change, provincial budgets, taxes, public services, employment and much more. Contributors include staff and research associates from the B.C. Office of the Canadian Centre for Policy Alternatives (CCPA). The views expressed on this blog are those of the individual contributors, and do not necessarily represent the views of the CCPA. Visit the CCPA's Policy Note blog at www.PolicyNote.ca.

'Self-sufficiency' energy policy: So where is the science?

| September 9, 2011

The headline in the Globe was certainly ominous -- "Clark's Hydro policy threatens to collapse B.C.'s climate change progress, scientist says."

The purported policy change seemed scary -- the government might roll back the requirement for BC Hydro to be able to meet domestic electricity requirements in drought conditions. And the scientist's description of the consequences is also quite a fright -- BC Hydro will be forced to rely on coal-fired electricity if the policy change goes through.

It is quite a story and would be of concern if true. But there is no basis for the story that was told and little need to be concerned. There was no science in the scientist's reported remarks. It was sadly just another effort, sponsored by the IPP lobby, to encourage the government to retain the now widely discredited "self-sufficiency" policy that is forcing BC Hydro to buy more power than it needs to ensure reliable supply.

The policy issue is not, as characterized by Justine Hunter in the Globe, whether BC Hydro should be able to meet its requirements in drought conditions. Of course it must be able to do that. BC Hydro must ensure reliable supply under all water conditions. The issue is how that can best be done.

The government's self-sufficiency policy requires BC Hydro to guard against the risk of drought by entering into long-term firm power purchase contracts with British Columbia IPPs -- power that in many years it will not need and be forced to sell at a loss. It precludes BC Hydro from even considering more cost-effective and in many ways less environmentally damaging options -- in particular relying on the spot market for electricity in those years that its own hydro production is limited by drought.

Would relying on the spot market in low water years increase GHG emissions in British Columbia? No. There would only be an increase in provincial emissions to the extent BC Hydro were to use the Burrard natural gas thermal plant more than otherwise, and BC Hydro simulations and spot market price forecasts suggest that would not occur to any great extent. There almost certainly would be no significant impact on B.C.'s ability to meet its GHG reduction goals.

Would BC Hydro's relying on the spot market in drought years mean more coal-fired power generation in Alberta or the U.S.? There is no evidence or reason to think so. The coal plants in those jurisdictions do not ramp up and down to supply spot market demands by BC Hydro or anyone else. They will continue to produce as much power as they can as long as the governments in those jurisdictions allow it.

In any event, a large proportion of the spot market power that BC Hydro could buy would be as green and clean as any B.C. supply. There generally are opportunities to buy very low cost surplus hydro power during the spring freshet period, even in low water years. Increasingly, there is low cost surplus wind production that BC Hydro could purchase when high wind conditions occur during light load hour periods. And at least until 2024, there is the Columbia River Treaty power that BC Hydro could use if no less costly sources of electricity were available. That power is owned by the province and managed by BC Hydro's own power trading subsidiary Powerex.

Too much of the debate (and headlines) about the government's self-sufficiency policy has been cast in slogans and fears. The good scientist speaking at the IPP press conference would do a service by presenting some analysis of impacts, benefits and costs -- not just spectres of self-serving concerns.

This article first appeared in Policy Note.



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