BC Hydro awards energy contracts
COMMENT: BC Hydro and the BC Government had a choice here. The choice for coal is a tragedy for British Columbia - setting the province back a century in terms of energy policy.
It's also significant that it is Richard Neufeld in the media defending the selection. BC Hydro appears to have lost its "independence" and is now just a gofer for government, as is Neufeld for Campbell.
Neufeld argues that new coal plants are clean. Bullshit. Emissions from a new coal plant which adheres to BC's emissions regulations, still emits a lot more toxic stuff - nitrogen oxides, sulphur dioxides, particulates and mercury - than does natural gas, for example. And for every unit of electricity generated, coal produces three times as much carbon dioxide, the main greenhouse gas leading to global warming.
This decision was not necessary. BC has boundless renewable energy resources in our sun, wind, tides, waves and rivers. These emit nothing toxic and don't exacerbate global warming.
But this government is handmaiden to certain corporate interests, and big-scale coal fired generation is a long-term plan of major coal producers. The two coal projects announced in the F2006 Call are the not-so-thin edge of the wedge. If they proceed, much larger projects are likely.
BC Hydro awards energy contracts
VANCOUVER – BC Hydro announced today the results of the 2006 Open Call for Power, awarding 38 contracts to independent power producers throughout the province. The new projects, once developed, will help to meet B.C.'s growing demand for electricity by adding more than 7,000 gigawatt hours per year to BC Hydro's system – enough power to meet the needs of over 700,000 homes. The announcement was made today by Richard Neufeld, Minister of Energy, Mines and Petroleum Resources and BC Hydro President and CEO, Bob Elton.
"Secure, reliable electricity has been key to British Columbia's economic prosperity and our quality of life for generations. But, as our province continues to grow, the gap between electricity supply and demand is expected to increase," said Minister Neufeld. "The contracts awarded today will help to close that gap by bringing new supply online by 2010 and also help us achieve our goal of leading the world in sustainable environmental management."
The contracts include 29 hydro, three wind, two biomass, two waste heat and two coal/biomass projects. The awards represent long term purchase agreements with an average term of 30 years. Ranging in size from under one megawatt to approximately 200 megawatts in capacity, the projects are located throughout the province and are expected to generate $3.6 billion in private sector investment. Of the successful bidders, 23 are already developing projects for BC Hydro resulting from previous calls, and three include First Nations as developers or partners.
"We are extremely pleased with the response to BC Hydro's Open Call," said Bob Elton. "Purchases from independent power producers represent one of the ways that we are working to secure our long term electricity needs as outlined in the Integrated Electricity Plan filed with the BCUC in March of this year. The diversity of energy resources awarded today will help meet demand growth and clean energy target while keeping B.C.'s electricity rates amongst the lowest in North America."
The 2006 Open Call Process was initiated in December 2005. Fifty-three separate projects bid into the process and were evaluated against publicly disclosed criteria including availability and reliability of the resource, proven technology and competitive pricing. As a result of a parallel tender process, BC Hydro also awarded a contract to the Brilliant Expansion Power Corporation, an affiliate of the Columbia Power Corporation.
Once BC Hydro and successful bidders have signed the electricity purchase agreements, the agreements must be filed with the British Columbia Utilities Commission.
Contact:
Elisha Moreno
Media Relations manager
Phone: 604 623-4099
elisha.moreno@bchydro.com
BC Hydro's 2006 Open Call for Power
The objective of the 2006 Open Call for Power was to acquire, through a competitive process, at least 2,500 GWh per year of firm, reliable, energy to be online by the year 2010.
As described in BC Hydro's Integrated Electricity Plan and Long Term Acquisition Plan filed with the British Columbia Utilities Commission in March 2006, BC Hydro has been a net importer of electricity in each of the last five years, and demand is expected to grow significantly in the next 20 years resulting in an estimated gap between supply and demand of 25 to 45 per cent.
To meet that demand, BC Hydro has awarded contracts for energy totalling more than the original target. The larger purchase is one step towards closing the gap between demand and supply for electricity expected by 2010, with allowance for attrition of some of these projects.
This is BC Hydro's sixth request to independent power producers for power project proposals in the last six years. There are currently 57 contracts in place, of which 38 are now online delivering 7,000 gigawatt hours per year.
Process
BC Hydro issued the Fiscal 2006 Open Call for Power ("Call") on December 8, 2005, following engagement and consultation with First Nations, stakeholders and independent power producers.
Based on input from independent power producers, a simplified process was also created to attract bids for small projects – those less than 10MW – with the target of acquiring 200 GWh per year of energy.
In April, BC Hydro received bids for 53 separate projects from 37 independent power producers representing both small and large electricity generation facilities. The response came from all areas of the province and included hydro, wind, biomass, waste heat and coal/biomass resources.
A multi-disciplinary team at BC Hydro including outside financial and resource experts evaluated the tenders based on the criteria stipulated in the procurement documents. These criteria included availability, reliability of the resource, proven technology and competitive pricing.
Results
On July 26, 2006, BC Hydro awarded 38 contracts to independent power producers throughout the province, with an average contract term length of 30 years. The projects, once developed, will result in the acquisition of more than 7,000 gigawatt hours per year of electricity by 2010.
The composition of the 38 projects is as follows:
There are 16 projects in the large project stream with an estimated 5700 gigawatt hours per year of firm energy and 750 gigawatt hours per year of non-firm energy, with an average firm energy bid price of approximately $74/MWh.
The 22 small stream projects have an estimated 650 gigawatt hours per year at an approximate average price of $70/MWh.
73% of the energy to be generated from the Call represents "clean energy" as defined in the BC Clean Electricity Guidelines.
As a result of a parallel tender process, BC Hydro also awarded a contract to the Brilliant Expansion Power Corporation, an affiliate of the Columbia Power Corporation, to purchase 226 gigawatt hours per year from the Brilliant Expansion Project (BEP). The price of the energy acquired from the BEP is competitive with prices paid for energy inthe large project stream in the 2006 Open Call.
The recommended projects are consistent with the prices tendered and awarded in other jurisdictions across Canada, and are consistent with the expected cost ranges as released in the 2006 Integrated Electricity Plan. The cost ranges are higher than in previous Calls due to construction inflation that is not expected to abate in the next few years. The contracts awarded by BC Hydro are fixed-price providing long-term price stability.
Once BC Hydro and successful bidders have signed the electricity purchase agreements, the agreements must be filed with the British Columbia Utilities Commission.
Regular updates, as well as further information about the acquisition process and evaluation criteria regarding the 2006 Open Call for Power, can be found on this website.
http://www.bchydro.com/news/2006/jul/release47609.html
