Comparing BC Hydro reports of calendar year 2015 to CY 2007, we learn that sales to residential, commercial and industrial consumers declined by 1,827 GWh to 49,272 GWh. Yet purchases from independent power producers (IPPs) rose by 114% or 7,690 GWh.
In 2015, BC Hydro produced 6,600 GWh less at its own hydro sites than it produced at the same facilities, on average, 2006-2008. If the utility buys more private power and sells less to its consumers, since there is no profitable export market, it must turn off internal supply. Simple economics.
Comparing CY 2007 to CY 2015, the amount paid IPPs increased $762 million or 167%. According to BC Hydro, the per gigawatt hour price paid IPPs in the quarter ended December 2015 was $91,422. In the same period, the average MidC wholesale price was $44,212 Canadian, well under half the amount paid IPPs in British Columbia. In addition, BC Hydro paid to extend transmission facilities to bring private power all over the province into its system. Widely distributed power sources with less than optimum line efficiencies result in transmission losses that drive up the effective cost of power.
The status quo benefits a relative handful of people in BC and investors elsewhere – most IPPs are owned outside BC – but most people in this province pay the cost.
Edison Foundation’s Institute for Electric Efficiency estimated the cost of saving electricity is 3.5¢ per KWh. That is far below the marginal cost of new power and should be the focal point of provincial policy. Instead, troubled with surplus power, BC Hydro rolled back conservation and demand management incentives.
Additional private power is unneeded, yet more IPP deals are coming on line. Electricity consumers in BC will not use SiteC power and there is no certainty of it being needed in 10 to 20 years. Breakthrough alternative technologies are more likely.
Utility scale solar generators are already capable of producing power at about half the cost of Site C and new solar cells containing earth-abundant minerals are evolving. Technologies such as the flagship project of Californian fim SolarReserve promise higher efficiencies, lower cost and flexibility in application.