Over the past few years a number of us have puzzled over this question. The Crown Corporation, in most people’s minds, was given its natural monopoly status in the belief that the Board and Officers will prudently manage Hydro’s assets so as to deliver adequate electricity to British Columbians at the lowest rates possible. For decades this seemed to be what happened, making BC the place in North America with the lowest electricity rates. It was held to be an achievement to celebrate and certainly gave our province an energy edge when it came to attracting new businesses. This is fast becoming no longer the case.
Let’s take a look at the record. In 2000 total assets were $11.596 billion; by 2011, assets had ballooned to $19.479 billion. In 2000, total liabilities were $9.320 billion; by 2011 they too had ballooned to $16.599 billion. If one were to add the yet-to-be-collected amounts held in the “Regulatory Assets” accounts (money we owe as ratepayers) that BC‘s Auditor General discovered, BC Hydro would be negative equity, more liabilities than assets.
Had there been a matching increase in demand it would make some sense but in the chart below you can see that has never been so. For several years the unanswered question has been: How could financially literate people steer our crown corporation on such a perilous course? The enormity of this financial fiasco places the prized assets of BC citizens directly in harm's way with no credible explanation as to why.
Through the decades BC Hydro has consistently shown a passion to have more generation and transmission capacity than was ever necessary to fulfill its real purpose of satisfying its BC customers. In support of this assertion please consider the Chart below (credit: Sandra Hoffman, PhD.).
The forecasts for all businesses are corporate manifestations of a course to be navigated. Forecasts drive investment planning and by extension, borrowing.
In his 1999 book, White Gold: Hydroelectric Power in Canada, Karl Froschauer , writing about BC Hydro, stated “By the early 1980s, the ‘unplanned surplus’- the equivalent of the entire capacity of the $2 billion Revelstoke dam (1,843 MW)- became evident, and BC Hydro was called to account for its planning decisions. The statement of Robert Bonner, BC Hydro chairman at the time, was reported as follows: ‘ Hydro was merely responding to what its corporate customers thought they would need. He said those industries could not have forecast plant closings and the general slump in the economy that resulted in a drop in the demand of electricity.’”
It is worth borrowing a military concept at this point. The best commanders are those displaying “situational awareness”. It is part of the art of valuable leadership. Chairman Bonner was simply excusing himself and his management team from their dearth of “situational awareness”. There are numerous indicators to call upon plus more than a hundred years of formal economic literature that would provide “situational awareness” for those wishing to avoid making “stranded investments” - those investment that no longer can produce revenues but still must be paid for.
Mr. Froschauer goes on to write that “There is no evidence that these companies were held responsible for not purchasing the electricity for which they had made firm inquiries…Upon revising and reconfirming the inquiries made by potential industrial customers, BC Hydro found that its estimates were now less than half of the original forecast.”
BC Hydro forecasts have consistently being far too optimistic because the corporate leadership and Governments have sought to turn electricity into an export product, forgetting along the way to ask the ratepayers in BC if that is a good idea and at what cost. The most recent forecast is no different than what Mr. Froschauer critiqued.
Demand for electricity in BC is from three categories: residential, business and large industrial. According to BC Hydro’s forecasting manager, the first two categories are driven by population and economic forecasts obtained from provincial sources. It is the third category where the trouble arises, much as described above. BC Hydro’s corporate development officer, Warren Bell, is tasked with taking expressions of need from would be new customers. He has demand growth for this group increasing from 15,722 GWhrs in 2010 to 22,271 GWhrs by 2017. In this group would be the Northern Gateway Pipeline, which has yet to clear environmental hurdles and get the support of the Provincial Government. Mr. Bell is tasking the corporation to be ready to provide electricity to what history tells us are the most fickle people BC Hydro could want as customers.
So does an unblemished record of demand exaggeration and an explosion in new investing/borrowing bring one closer to understanding why? I doubt it. So what else is there?
The answer may be found in another location. Most readers will not have heard or read of a private US corporation, the “North American Electric Reliability Corporation” (NERC). This private enterprise came into existence in 2006 and has the stated intent:
a. to promote the reliable planning and operation of the electric bulk power systems of North America; b. to act as the electric reliability organization for the United States as certified by the Federal Energy Regulatory Commission and for Canada and Mexico as recognized by applicable government and regulatory authorities in such countries, all pursuant to law; c. to develop, implement, and enforce, consistent with executed agreements with regional entities and approvals by applicable regulatory authorities, standards that provide for reliable planning and operation of the electric bulk power systems of North America; and d. to conduct such other lawful business and activities, not otherwise inconsistent with specific purposes set forth herein, in which a corporation subject to the New Jersey Nonprofit Corporation Act may engage.
Since 2006 our Federal Government has caused the National Energy Board to complete a memorandum of understanding with NERC. In its 2010 Annual Report NERC states that its “standards are mandatory and enforceable in Ontario and New Brunswick as a matter of Provincial law. NERC has an agreement with Manitoba Hydro, making reliability standards mandatory for that entity.” MOUs also existed with Nova Scotia, Quebec, Saskatchewan and Alberta. Learn about the nature of BC Hydro's obligations to NERC in this report.
So what has been taking place is the rearrangement of control of bulk electricity production in North America by a private US entity. NERC has the power to enforce its will on producers and looks to have the legal authority to by-pass local utility commissions. It is this development that might be the key to the understanding of why BC Hydro has indulged in its aggressive contracting with Independent Power Producers in BC when domestic demand increases are non-existant.
This is neither a complicated nor a long story – but it’s a tragic vindication for a hell of a lot of people who have been telling the story, ignored at best, more often vilified.
Look at page 1 of the story in the Vancouver Sun, May 11 under the heading "HYDRO AWASH IN PRIVATE POWER", where you’ll see that BC Hydro is spilling water over its dams and missing a chance to make a huge profit and is, instead, sustaining a crippling loss all by reason of corrupt bargains it’s been forced to make with private companies.
Ask yourself how Hydro could lose money in one of the wettest years in history, when their reservoirs are chock-a-block full?
It’s because of the gross negligence of the Campbell/Clark government – supported by the mainstream media (which has refused to do its job and investigate the private power plan – a plan which compels Hydro to buy private power at double+ the market price.)
Yes, folks, the chickens I’ve been writing about for years have indeed come home to roost – BC Hydro is buying private power while spilling its own water over the dams. Your power company, instead of using the water in its reservoirs to make power for British Columbians, lets it spill away, unused, while it pours money into grasping private hands at immense profits to them and immense losses to us.
Moreover, BC Hydro – such is the surplus of power in the US – could be buying Bonneville Dam power for a song and flipping it into a neat profit.
The exposure of the evils of the so-called “run of river” scheme was first published by Dr. John Calvert in his book, Liquid Gold, which exposure has been re-emphasized by too many power experts to mention – though one must point out the work of our resident economist Erik Andersen, who has been putting the price of these corporate rip-offs in language we can all understand.
We at the Common Sense Canadian have had super back-up from our contributors. It’s dangerous to list some for fear of offending others but as the official spokesperson for the Common Sense Canadian I must give special thanks to John Calvert, Marvin Rosenau, Larry Dill, Joe Foy, Otto Langer, Rex Weyler and so many others who weren’t afraid to stick their heads above the parapet.
Do Damien and I feel vindicated?
You're damned right we do, though it leaves a very bitter taste. For nearly three years we’ve traveled this province from meeting to meeting, trailed by power company stooges putting out the bullshit that we weren’t telling the truth while having no “facts” of their own to put forward. We’ve seen local media reporters have their reports of our meetings spiked by editors told from above to make no mention of our evidence. We’ve searched and waited in vain for just one major media editor to back up the simple truths we were disseminating.
The momentary pleasure that comes with vindication is massively overwhelmed when one tots up the damage including the destruction of 75 rivers and streams and the ecologies they sustain, with hundreds more to come; the destruction of salmon runs and resident Rainbows, Cutthroat, Dolly Varden and Bull Trout; clear-cuts for utterly unnecessary roads and transmission lines; the incalculable loss of wildlife; and last but scarcely least, the bankruptcy of BC Hydro (the only reason it isn’t officially bankrupt is that it can always raise money by raising rates and obtaining grants from the government – this means that British Columbia, its citizens and industries are bankrolling slick, greedy corporations as they cheerfully comply with the secret sweetheart deals the Campbell/Clark government has forced BC Hydro to give them. Yes, the profits from these corrupt deals are, for the most part, sailing out of the province directly out of your pockets and mine..
British Columbia has the right to have this whole sordid mess investigated – we are also entitled to a media that delves into this grossly negligent government action and lays the facts out before us.
I cannot leave without making special mention of Tom Rankin, who spent a fortune in his Save Our Rivers Society bringing the truth to the people. Damien and I are both much in his debt and the Common Sense Canadian was, in large part, inspired by Tom’s sacrifices.
There it is, folks, the truth is out and, in all likelihood, they’ll all get away with it.
Read this story from Scott Simpson in the Vancouver Sun, reporting on the glut of cheap hydroelectric power in BC and Washington State due to overflowing reservoirs from a big Spring runoff; despite this, BC Hydro is forced to pay top dollar for private power, unable to avail itself of more affordable alternatives. (May 12, 2012)
After a bumper year for precipitation in the Pacific Northwest, BC Hydro stations around British Columbia are sitting idle while independent power producers run flat out.
There’s so much water available for hydroelectric power that a Washington-Oregon utility, which runs full-time to protect salmon and trout, is paying other utilities to take electricity off its hands.
That means bargain-priced import electricity is available to BC Hydro from the Bonneville Power Authority, but it’s a bittersweet opportunity.
It’s difficult for BC Hydro to tap into the cheap power because of contractual obligations to purchase power from about 75 independent power producers (IPPs). Hydro is forced to buy from IPP operators, including big industrial ones such as Rio Tinto Alcan and Teck Resources, even as its own generation stations wait on standby. For example, at Peace Canyon generating station downstream of W.A.C. Bennett Dam on the Peace River, the primary source of hydroelectricity for all of B.C., the turbines are sitting idle for the first time in a decade.
Prices paid to IPPs vary by season, from an average winter high of $100 to a springtime low of about $60. By contrast, the Bonneville price in recent weeks has averaged less than $20 US.
Overall, according to Hydro’s 2011-12 annual report, IPPs earned $676 million from Hydro in the 12-month period ending March 31 — at a price per megawatt of power that was more than twice the cost of imported electricity during the same period of time
The water is pouring in just as warmer spring temperatures push down electricity demand. Data this week from the U.S. Energy Information Agency shows Oregon with 172 per cent of its long-term average precipitation supply, and B.C. with 131 per cent.
Meanwhile, a continuing U.S. economic recession is curtailing industrial power requirements south of the border.
That means there’s no market for B.C. electricity exports to the U.S. Nor do B.C. residents need Hydro to crank up domestic production.
B.C.’s IPP community includes wind, large industrial hydro and gas-fired generation — but most operations are small-scale run of river hydroelectric installations.
The textbook case is the watershed of the Squamish River system.
Hydro is taking a pass on all the water running into its Daisy Lake reservoir near Whistler. Instead of diverting the water from Daisy via pipeline to a BC Hydro generating station on the Squamish, the Crown corporation is allowing the water to flow directly downstream into the Cheakamus River.
Meanwhile, on two other Squamish River tributaries, the Ashlu and the Mamquam, Hydro is paying IPPs to generate power for the British Columbia electricity grid.
I ask because I’m going to be urging such a course in the times to come.
Although he didn’t invent the idea, Mahatma Gandhi invented the modern term when he protested a tax on salt imposed by the British which hurt the poor Indian especially. He broke the law deliberately and went to jail for doing so.
A more current example was that of the Freedom Marchers of the 1960s who challenged the segregation laws of the Southern US by “sitting in” at segregated restaurants; by Rosa Parks who defied the laws of Montgomery, Alabama, by sitting in the white only section of a bus; and by Dr. Martin Luther King who in the same time urged peaceful demonstrations.
Many would go back much further in time to Jesus.
What are some of the rules?
It must be non violent. That is a very important rule.
The law being protested must be unjust in one or more ways. It must be imposed unfairly or itself contrary to law or justice or both.
Those protesting must be prepared to go to jail.
There must be no other reasonable way to attain justice.
They must be effective.
Where do I suggest civil disobedience?
Fish farms, for one area. Government policy allows them yet they are not only in violation of the UN law requiring the Precautionary Principle but against Canadian law in this regard.
So-called “run of river” projects which, without fail, severely damage the river and its ecology usually to the point of - for all intents and purposes - utter destruction.
Pipelines - especially the proposed Enbridge Northern Gateway pipelines taking the ultra toxic bitumen from The Tar Sands to Kitimat - which don’t pose a risk of huge environmental damage but the certainty of it.
The utter lack of government concern for the environment and the public that wishes to preserve it is underscored by the recent decision of the federal government to dam the Kokish river near Port McNeill – a river that is home to all species of salmon, resident Rainbow, Cutthroat, Dolly Varden and has both a winter and summer run of steelhead.
Tanker trafficking of bitumen from Kitimat or through Vancouver Harbour which, again, don’t pose risks but certainties of huge environmental damage.
Civil Disobedience has had successes in the past in BC but too often there have been one or two who have refused to obey the law and once they have been jailed, the protest has petered out.
We must organize such that scores, even hundreds, defy the law and are ready to do time.
There has been very little by way of organization in the overall community but First Nations appear to be ready and, if nothing else, the rest of us must be prepared to support them and face the same consequences.
Our first step must be, in my view, a clear statement by environmental organizations and individual British Columbians that we will stand shoulder with First Nations - and we at the Common Sense Canadian plan to meet with their leaders and see how we can help.
It’s indeed an overworked accolade but Dr. David Suzuki is a great man. In the Environmental world he is in that pantheon of heroes that include the likes of Rachel Carson, Jane Goodall, Thor Heyerdahl and Jacques Cousteau. Dr. Suzuki is a scientist but is better known as the man who brought the environment into the living rooms of the world, explaining things in ways we all could understand.
In years when it was unfashionable to be an environmentalist in Canada he, with the likes of Colleen McCrory, Mark Angelo, Joe Foy, Betty Krawczyk and so many others, slowly but surely got the public’s attention. Dr. Suzuki’s impact is incalculable.
But great people make mistakes and usually they are great mistakes, bringing unforeseen consequences that should have been foreseen. Perhaps that’s because people are reluctant to challenge those held in such high esteem.
Dr. Suzuki not only hasn’t suffered fools gladly, he doesn’t suffer those who disagree with him. This caused great harm for those who believe that the Campbell/Clark government has done irreparable harm to BC’s environment. I’m one of those people.
I felt so strongly on this subject that I campaigned long and hard for the NDP in the May ’09 election. In that election Dr. Suzuki and the crass opportunist, Tzeporah Berman, supported the private development of rivers.
Dr. Suzuki now admits that he was wrong to think that private enterprise and environmentalists could work together to obtain the best of both worlds. In my opinion, Dr. Suzuki failed to understand that corporations don’t give a rat’s ass about the environment and only act responsibly when they’re forced to. As a former Environment Minister I could have told him that. Indeed, a corporation’s mandate is to make money for shareholders and for management and the directors to piss away profits on environmental concerns is actually a breach of the trust placed in them.
Dr. Suzuki made his commitment to capital/environmental cooperation in good faith but that doesn’t alter the fact that he wreaked great harm on the environment he has laboured so long and hard to protect.
Those of us active in trying to save rivers were in shocked disbelief when we learned of his position. In fact I was so shocked that in a public meeting I referred to him as a “pseudo-environmentalist”, a remark instantly passed on to him - but much as I admire David, I wasn’t sorry for the outburst.
How can I say that his position helped the Liberals win a close election?
Because I was there. I campaigned all around the province for the NDP and saw first hand what people thought. If David Suzuki thought that damming of our rivers to produce power was OK, well then it must be - those who disagree must be just shrill tree huggers.
The impact wasn’t, perhaps, so great in the Lower Mainland and Southern Vancouver Island but it was substantial in rural BC where many races were very close. As I spoke in rural ridings, Suzuki’s words provided an invisible critic of what I was saying.
I applaud Dr. Suzuki leaving his Foundation so that their neutral status required for them, as a charitable society, to get public funds, isn’t compromised. (As an aside, I wonder if the Fraser Institute has such a status or is bias OK for the far right?)
David Suzuki must make amends. He must look at the serious issues of fish farms, destruction of farmland, ruination of rivers for electricity we don’t need produced for the bank vaults of larger corporations, pipelines and huge tankers taking Tar Sands gunk through our precious environment and down our coast and out of Vancouver Harbour.
He doesn’t owe a damned thing to me or any other who has disagreed with his 2009 stance.
He does, however, owe a hell of a lot to his province and to the next generation and those to come.
Have you thought about whether or not there’s a soul? What about near death experiences? Should the Book of Revelation scare the pants off us? Find out what other religions and experts say with my new book The Home Stretch available online for your computer, kindle, kobo or iPad for the miserly sum of $9.99
Listen to Damien Gillis and CHLY's "A Sense of Justice" host Rae Kornberger's recent wide-ranging discussion on the war being waged against fish by both the Canadian and BC Governments. The pair cover everything from Stephen Harper's underhanded plan to gut the fisheries act in order to pave the way for oil pipelines and other major industrial projects that would harm fish habitat, to news on the impacts of salmon farms and private river diversion projects on wild fish. (March 14, 2012 - 46 min)
Read this exclusive story from the Vancouver Sun on documents obtained by the Wilderness Committee that demonstrate private river power projects are killing fish. (Match 10, 2012)
The Mamquam River pours cold and fresh off the Coast Mountains, forming pools and canyons and chutes of white water on its way to the Squamish River and Howe Sound.
It was a natural place for federal fisheries biologists to assemble on an August 2010 weekend for swift-water safety training. Like the river itself, however, their exercise took an expected turn.
Rather than watch the Mamquam flow predictably to the sea, the biologists were dismayed to witness the water levels fluctuate wildly — and with dire consequences.
Young steelhead were dying, stranded without water.
The culprit? The Capital Power run-of-river hydro plant, located just upstream.
The independent power industry bills itself as green, sustainable and environmentally responsible.
But more than 3,000 pages of documents obtained separately by The Vancouver Sun and the Wilderness Committee through freedom of information requests show water-flow fluctuations caused by run-of-river hydro projects are killing fish — and the problem is not isolated.
While independent power producers insist their sector remains the cleanest energy option, the documents bolster environmentalists’ long-standing concerns about the industry.
“I’m seeing significant environmental problems,” said Gwen Barlee, policy director for the Wilderness Committee. “And that runs completely counter to what the companies are saying, which is essentially, ‘Trust us with your wild rivers and there won’t be any problems.’ ”
The documents detail repeated short-term fluctuations in water flows, resulting in the stranding and killing of juvenile fish downstream of two plants, Capital Power on the lower Mamquam and Innergex on Ashlu Creek, another tributary of the Squamish.
These opening words from Gwen Barlee of the Wilderness Committee which cry out (in my mind at any rate for I don’t speak for the W.C. which certainly doesn’t need my help) for the highest manifestation of protest including civil disobedience:
Tucked away in the wild of northern Vancouver Island, the Kokish River is a treasure for fishers and wilderness lovers alike.
The Kokish River, located 15 km east of Port McNeill on northern Vancouver Island, is threatened by a proposed 45 megawatt hydropower project. The river is renowned for its high fish values including endangered summer and winter runs of steelhead.
Thus has begun yet another rape of a river without any public process at all. The deal requires approval from the Department of Fisheries and Oceans, which is why the Wilderness Committee is calling on citizens to write to them and demand they reject this project that would unquestionably damage important fish habitat.
The proposal is to divert the river through 9 kms of pipe through the generators then back into the river. This river has 2 steelhead runs and all 5 species of Pacific salmon.
Back to Ms. Barlee:
Kwagis Power, owned by Brookfield Renewable Power and the Namgis First Nation, has applied to dam and divert the 11 km river into a 9 km pipe. The federal Department of Fisheries and Oceans (DFO) considers the Kokish to be a high-value river with a sensitive fish population.
The Kokish is a fish-rich river. In addition to the steelhead populations, it is home to five species of wild salmon, coastal cutthroat trout and Dolly Varden.
This is an outrage and it must be stopped.
Let’s remind ourselves what this means.
In the environmental sense, the river will no longer be the home and breeding point for the salmon and trout which rely upon this river. How the hell can you expect anything else to happen? It is indeed "common sense"!
What also happens is the slow death of the river and its ecology which depend upon the fish in the river for its own survival.
On the fiscal side, here is yet another nail in the BC Hydro coffin. It will be required to take this power during the spring run-off when BC Hydro doesn’t need the power, at double+ what it’s worth in the market or use it at many times over what BC Hydro can make for themselves!
Adrian Dix now has a right, and indeed a duty, to speak out loudly and clearly that he and his party condemn this project and that if elected, he will cancel this deal forthwith.
As for the premier and her outfit - who have already approved the project without any public consultation - this demonstrates, as if it were needed, her appalling ignorance of environmental and, indeed, fiscal matters. It also indicates the premier’s lack of courage – she evidently wants no controversial matters to spoil her day, assuming that if she just sticks to photo opportunities, her admitted good looks will sway the voters.
Now she gives us all the finger as she hands over yet another of our rivers to her corporate supporters. (I suppose we should be comforted in the knowledge that the Vancouver Board of Trade always gives her a standing ovation.)
This government has squandered at least 3 billion dollars, tripled our provincial debt and is dumb enough to cost the province $35 million dollars by refusing that sum from Telus who offered that if the dome was called Telus Field.
It has not just shown no interest in the environment, it has encouraged those who would pillage it for profit, to fill their boots.
It has driven BC Hydro into what would be bankruptcy in the private sector and now strikes yet another blow to it by adding the Kokish to the ecological disasters which have been the hallmark of the Campbell/Clark government.
More than fifty organizations and individuals - including NHL star Willie Mitchell and yours truly - have signed onto the Wilderness Committee's letter calling for DFO to reject the project. They clearly believe that if the public adds its voice to the chorus, there is a real opportunity to make DFO do the right thing.
In the first of a two-part interview, Rafe Mair grills BC NDP Leader Adrian Dix on private power, Site C Dam and BC's flawed environmental assessment process. What will the NDP do with existing and future private river power projects (a.k.a. IPPs) if they form the next government - and where do they stand on Site C Dam? Watch and find out...and stay tuned for part 2 Thursday, dealing with Enbridge, LNG and salmon farms.
In the second installment of a two-part series examining the failed private power model in BC, geologist and concerned British Columbian George Gibson focuses on the proposal to dam and divert the Kokish River as a prime example of the flawed BC Liberal energy policy.
-----------------------------------
An introduction and promotion from the proponents of the Kokish Project - benefits of this project:
Security of power supply: In winter, North Island communities not only utilize more electricity, they also experience a high incidence of power outages. Unlike many BC river systems, where peak flows occur during spring freshet, flows on the Kokish River are at their highest in late fall and winter. These high flows will make it possible for the Project to reliably generate enough power to supply the entire North Island.
Really?...That would be a neat trick. Here are some operational realities courtesy of Environment Canada and BC Hydro:
BC Hydro reports that “cold weather equals peak electricity demand” and makes specific reference to a period of sustained cold temperatures starting November 22, 2010 which placed an additional load of almost 2,000 MW on the system. A review of the Water Survey of Canada historic hydrometric data for the Tsitika River (the basis for a synthetic flow model for the Kokish) shows that this project would have been off line for the entire duration of this cold snap. Furthermore, a review of a less severe cold snap from January 15 – 17, 1970 using historical hydrometric data directly from the Kokish River shows that only a total flow of 4.5 m3/s would have been available. This facility requires a minimum flow of 21 m3/s, over and above minimum in-stream ecosystem requirements, for full 45 MW capacity output. Once again, this facility would have been either off line or at severely restricted capacity.
This blatant collusion is further propagated in a fact sheet example provided by the Clean Energy Association of BC promoting the urgency for IPP development. Colder than normal temperatures between January and April 2008 combined with unscheduled unit outages and other operational constraints created short term energy shortfalls that cumulatively required the import of 2,300 GWh. The Clean Energy BC Fact Sheet on Run-of-River explicitly promotes this technology as “providing a continuous source of clean, green renewable energy with minimal environmental impact.”
Firstly, BC Hydro is not in the business of importing expensive on-peak market electricity unless these imports are intended to cover short term capacity issues. The demand driver in this case was cold weather. How much capacity relief did run-of-river power producers contribute during these conditions? Once again, the hydrometric data for the Tsitika River, over this period, shows meager flows during every single cold snap. The Kokish facility would not have been available to provide BC Hydro with any effective capacity support during these short term capacity shortfalls. Much of the imported 2,300 GWh (about 800 MW of additional average daily capacity over the four month period) would still have had to come from some other non-hydro source.
Even more ironic, is that the only non-hydro source of clean energy capable of providing this level of capacity support, is available right now from the Northwest Power Pool. Would it not make more sense for BC Hydro’s marketers to spend their time securing firm energy purchase agreements from the wind power producers located right on our door step?
Secondly, run-of-river IPPs are far from immune to unscheduled unit outages. We will now consider a major vulnerability unique to this type of infrastructure.
Seismic hazard risk and run-of-river infrastructure: Electricity self-reliance and public safety will be the first casualties.
The energy security mandates of BC’s Clean Energy Act, including private sector promotions of run-of-river development on Vancouver Island and along the coastal mainland, quite literally, have the greatest potential for catastrophic failure. This is for two reasons:
Proximity to major geologically active fault structures that have a 100% probability of generating a destructive earthquake.
Inherent seismic vulnerabilities in run-of-river infrastructure that precludes cost-effective hardening measures.
Seismic hazards in BC are most severe along coastal regions and include two major offshore threats: “Canada’s equivalent of the San Andreas fault”, running from northern Vancouver Island to the Queen Charlotte Islands, and the Cascadia Subduction Zone, extending from northern Vancouver Island to northern California. The Cascadia Subduction Zone has been the source of massive magnitude 9+ earthquakes at intervals ranging between 300-800 years. The last one was on January 26, 1700….do the math! An even greater threat is posed by strain build up between these intervals that produces, on average, one onshore event per decade. These events are typically smaller in magnitude but occur much closer to built-up areas, as in the June 23, 1946 magnitude 7.3 earthquake centered beneath mid-Vancouver Island.
Infrastructure vulnerabilities to earthquake damage have now become a major consideration for populations in high hazard locations. Experience has repeatedly demonstrated that one of the most vulnerable components of critical “lifeline” infrastructure are water supply systems. Equally vulnerable are wastewater or sewage systems. Water pipeline infrastructure is vulnerable because it is typically buried just below the surface where destructive surface wave energy is concentrated. Furthermore, analysis from the February 27, 2010 magnitude 8.8 offshore earthquake in Chile demonstrated that water pipelines were particularly prone to rupture when buried in loosely consolidated soils. Specifically it was observed that “areas within 200’ (or so) of river banks often suffered lateral spreads and settlements”. A partial tally of the damage to water supply pipelines in the Concepcion area alone included 72 breaks or leaks to large diameter welded steel pipes and over 3000 breaks in water mains and service laterals. One year later, the repairs were ongoing. In addition to this, wastewater systems suffered heavily, including damage to large diameter interceptor pipes and small diameter collector pipes.
None of the above findings bode well for a power generating facility dependent on a long water pipeline (penstock) to deliver water from an intake weir to a powerhouse. Specific features of the Kokish run-of-river project are supplied by the proponent:
Minimal requirement for new infrastructure: The Project’s proximity to existing roads and transmission lines will minimize requirements for new infrastructure, which will in turn reduce environmental impacts and clearing requirements, and help reduce project costs. The low level weir and intake will be located within 100 m of the Kokish Main Road on the east side of the Kokish River. The 9 km buried penstock will run parallel to the Kokish Main Road for about 80% of its length, and the powerhouse and switchyard will be situated on land that is immediately adjacent to the Telegraph Cove Road.
The Kokish run-of-river project is located only 150 km from the Nootka Fault, one of BC’s most seismically active regions. This is located essentially at the confluence of the “San Andreas of the north” and the Cascadia Subduction Zone. This is also very close to the location of BC’s most recent wake up call that rattled Vancouver Island last year.
In light of the information presented above, it should be obvious that not only is this project susceptible to catastrophic earthquake damage, it poses the additional risk of damaging or interfering with access to critical road and highway infrastructure. This is no trivial matter: A rupture anywhere along the 9km length of the Kokish facility’s penstock could cause the uncontrolled release of nearly 6,000 gallons of water per secon Damage at or near the powerhouse would be compounded by very high water pressure: 2,140 KPa or about 300 psi.
Where’s the value?
BC Hydro will be obliged to purchase 180 GWh/year from the Kokish run-of-river facility. This amounts to approximately 1/3 of 1% of BC Hydro’s total integrated system requirements and will contribute 0 MW of capacity support during peak system loads. This energy will cost BC Hydro approximately $18 million dollars/year, nearly the same amount of capital dedicated to vegetation management for Hydro’s entire system. Today, BC Hydro could purchase approximately 580 GWh of on-peak (high demand conditions) market electricity or in excess of 1000 GWh of off-peak (low demand conditions) market electricity for the same $18 million.
Proponents of the $200 million Kokish Project list additional benefits as the full-time employment of approximately 70 people over the two year construction phase of the project. Like all other run-of-river facilities, the subsequent operation of this facility would be automated, requiring no further significant employment opportunities. The argument that this is an effective job creation strategy is a slap in the face to the ecotourism businesses established in the area. A single whale watching operation based in Telegraph Cove has contributed at least this number of man hours of employment with many more to come. Furthermore, their customers contribute to a cascade of economic spin-offs for the community. There is no Clean Energy Act directive to support sustainable family businesses that promote the importance of environmental stewardship.
LNG Exports to Asia to be powered by new clean energy projects: A complete loss of integrity and credibility for Government and Clean Energy Producers
This idea is a serious contender for the “Darwin Awards” as the most counterproductive initiative ever conceived. A brief review of one inconvenient reality that both Government and clean energy producers have chosen to ignore: The concept of thermal efficiency. This is the single most effective variable available to combat GHG emissions. Thermal efficiency is a measure of how efficient or wasteful a fuel burning process is. A few examples:
typical automotive engine (gasoline) ~ 25%
coal-fired power plant ~ 45%
modern combined cycle natural gas power plant ~ 60%
high efficiency natural gas appliance (furnace or water heater) ~ 98%
This demonstrates how extraordinarily wasteful we are with our fossil fuel use. Any use other than for the purpose of heating contributes significant and unnecessarily GHG emissions. It is especially important to note that the use of electricity from a natural gas power facility for heating purposes reflects poor management of this resource.
The LNG proposal promoted by Premier Christy Clark is predicated on the use of natural gas to displace coal-fired power plants. In fact, by supporting this practice, the carbon footprint of BC’s natural gas will be increased dramatically. Pipeline transportation to the coast, conversion to LNG, and shipping to Asian markets all compound GHG emissions either directly or indirectly. It is important to remember, the construction process for the required infrastructure, including building new clean energy facilities, all produce significant GHGs. Furthermore, BC has no control over how this resource will be used at the other end. In a complete twist of irony, China uses a huge amount of natural gas for feedstock in the production of ammonia for petrochemical fertilizer. This is due, in part, to the vast tracts of fertile flood plains that have been sacrificed for massive hydropower projects. The use of natural gas for the production of ammonia has been specifically identified as having one of the highest intensities of GHG emissions.
DSM (Demand Side Management): The only practical, affordable, and effective option
The Smart Meter Program is a specific directive of the Clean Energy Act. It mandates that BC Hydro communicates a very simple message to its customers, in the most expensive way possible! It will cost BC Hydro close to $1 billion to say “you’re screwed” to those customers unfortunate enough to rely on electricity to heat their homes. We have previously demonstrated a massive potential reduction in the supply gap that would be possible by getting customers to fuel switch their heating demands from electricity to natural gas. This is already a “no-brainer” by today’s comparative energy costs. Pending future increases in electricity costs will only serve to force the issue. In fact, only about 20% of a typical BC household’s annual energy demands (25 MWh) require electricity: appliances and electronics(15%), and lighting(5%). The remaining 80% is split between space heating(60%)and water heating(20%). Therefore up to 80% of household energy use could be supplied by natural gas.
This option for fuel switching is a significant advantage for BC. A winter peaking energy profile allows for efficient substitution of domestic energy resources. In contrast, large export markets such as California, have summer peaking energy profiles where electricity-dependent cooling demands are the main drivers of energy consumption. The total annual energy requirements for BC’s residential sector are about 45,000 GWh. However, only about 9,000 GWh are dependent on electricity. This presents an opportunity for BC Hydro to once again become a highly profitable clean energy exporter using existing capacity from its heritage assets. These exports would be displacing the much less efficient use of natural gas for producing electricity to power California’s air conditioners.
The most efficient use of BC’s natural gas is for domestic energy requirements in high efficiency furnaces and water heaters. Natural gas committed to household energy use could easily eliminate any anticipated electricity supply gap for years to come. Furthermore, it would eliminate any dependence on private power producers and put a stop to the completely unnecessary sacrifice of our rivers and streams. Perhaps more importantly, BC would be able to ensure the most effective management of GHG emissions from this resource.
The race for BC to become a world leader in new clean energy production was over long ago, when Government and the private power sector blew their wager on run-of-river technology. A failure from all influences on this particularly ill-suited initiative for BC has been offset only by stunning successes in the wind power industry. It defies all logic that BC Hydro should not be able to take full advantage of this already established massive new resource and optimize natural operational synergies with other partners in the Northwest Power pool.
The only things standing between efficient management of BC’s GHG emissions, affordable electricity, and a highly profitable public utility are the Clean Energy Act and the boneheads behind it.
Lessons learned
A fitting conclusion is provided by David Freeman, appointed chair of The California Power Authority during the California Electricity Crisis. This submission was made to the Senate Subcommittee on Consumer Affairs, Foreign Commerce and Tourism, on May 15, 2002:
There is one fundamental lesson we must learn from this experience: electricity is really different from everything else. It cannot be stored, it cannot be seen, and we cannot do without it, which makes opportunities to take advantage of a deregulated market endless. It is a public good that must be protected from private abuse. If Murphy’s Law were written for a market approach to electricity, then the law would state 'any system that can be gamed, will be gamed, and at the worst possible time.' And a market approach for electricity is inherently gameable. Never again can we allow private interests to create artificial or even real shortages and to be in control.
George Gibson is a retired geologist from Courtenay, BC , who applies his passion for science and the environment to wilderness preservation, and the promotion of environmental stewardship through ecotourism.
