Privatizing public dollars

Massive expansion of wind and solar energy critical to ensuring the affordability of Canada’s future electricity system, Robert Hornung, Canadian Renewable Energy Association:

Wind and solar energy have become the dominant choice for new electricity generation globally because they provide new electricity at the lowest cost. Keeping electricity costs low for Canadians will require adding a lot more solar and wind energy to the mix.

According to Lazard’s 2020 Levelized Cost of Energy Analysis, the cost of solar energy has fallen 90% since 2009 and the cost of wind energy has fallen 71%. Solar and wind energy now have a levelized cost lower than any other form of new electricity generation in the United States.

…Here in Canada, wind and solar projects are competitive with any form of new electricity generation. We are seeing contracts signed for wind energy in Alberta and Saskatchewan at prices below $40/MWh, and solar energy contracts signed in Alberta at prices averaging $48/MWh.

Incredibly, these low costs are projected to fall still further thanks to continued technological evolution

Electricity created for less than $40 per megawatt-hour is not a dream, it is reality in the 2020s.

But that is not helping British Columbia ratepayers.

High-priced help at BC Hydro and the provincial government decided benefits of cost reduction should never be wasted on consumers. To ensure they are not, the utility signed decades-long deals with private power companies to purchase electricity generated by wind, solar, hydro, and thermal systems. Prices were not established by competitive bids or cost factor analyses. They were awarded by sympathetic bureaucrats. The contracts contained annual inflation escalators and were designed to be unbreakable.

Rather than paying $35 to $40 per MWh for wind power, British Columbia’s public utility is far more generous to private power suppliers. While individual contracts themselves are secret, the answer to an FOI inquiry I made to the utility some months ago is revealing:

BC Hydro’s systems show that the average unit price paid for wind power delivered by Independent Power Producers was $120.58/MWh during fiscal 2020.

Perhaps paying 12¢ per kilowatt-hour seems entirely reasonable to BC Hydro since they will be paying far more for electricity produced at Site C.

It is also worth noting that BC Hydro was successful when it sought to restrict consumers from installing solar systems capable of feeding excess power back to the grid, even though cost of that power to the utility was below what it was paying IPPs. BC Hydro executives knew the price of solar power had dropped dramatically in recent years and increasing efficiencies would ensure continued cost declines. Lower prices would encourage consumer to add more generating capacity.

BC Hydro management sees self-generation as a threat to the empire. That is typical of old-style utilities, which sometime demand protection from political leaders. A few years ago, the Governor of Nevada rejected a bill designed to establish community projects, where renters and low-income Nevadans could participate in generating solar power. That would have gone against the interests of billionaire Warren Buffett, whose Berkshire Hathaway corporation owns a large part of the state’s power system.

The status quo favours elites and disfavours the rest. People in power tend to represent one category, not the other.

Categories: Energy

4 replies »

  1. In Tahiti, most residences have solar generation capabilities. Purchase of electricity is expensive. The people work like crazy during the solar generation periods, using whatever electric they can, because when the solar panels stop working, they MUST use purchased electricity, the corporation. The residences are forbidden to store electricity, period. It’s a sad state.
    On the other hand, it has been suggested that we should hook televisions (and computers) up to bicycle generators for power. Either TV/computer time would fall off a cliff, or the population in general would be really, really fit!


  2. I’m wondering, perhaps when people were hired at BC Hydro they just weren’t informed, or couldn’t understand the concept that the corporation is a public utility. I mean that bit should have been required reading. Hey, BC Hydro employees, if you want to work for someone like Warren Buffet that is of course your choice, but you obviously need some help in making your career choices.

    People, like the promoters of new energy projects, Hydro or the Canadian Renewable Energy Association, are amazing in that they don’t mind if we go incurably into debt, well that and their inability to understand the Utility Death Spiral, and the conservation of electricity that it entails.

    Liked by 1 person

  3. Hi Norm,

    Just wanted to thank you for this excellent post. I can no longer afford to keep my home heated in the winter – it is electrical heat. So I end up turning everything down to 15 C and leaving it there all winter. Thank you BC Hydro! It seems that the vacationing Mr. Horgan is good with promised, but absolutely useless in carry through.

    Thanks again, Norm!


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