BC SUPPLY GAP A REDEFINITION OF SELFSUFFICIENCY 32

BC SUPPLY GAP: A REDEFINITION OF SELFSUFFICIENCY 32 nd USAEE/IAEE Conference, Anchorage AK July 29, 2013

Introduction 2 Paper examines an alternate solution to meeting British Columbia’s electricity needs given the legislated constraints within the Clean Energy Act.

3 British Columbia Bulk Power System Hydroelectric 10, 259 MW Thermal 1, 086 MW 89 EPAs Two Interties – AB and US GM Shrum and Peace Canyon Mica and Revelstok e

80, 000 70, 000 60, 000 50, 000 40, 000 30, 000 20, 000 10, 000 0 F 2012 F 2013 F 2014 F 2015 F 2016 F 2017 F 2018 F 2019 F 2020 F 2021 F 2022 F 2023 F 2024 F 2025 F 2026 F 2027 F 2028 F 2029 F 2030 F 2031 Firm Energy Capability (GWh) 4 BC’s Firm Energy Capability Load Resource Balance (year ending March 31) Existing and Committed Supply Planned Resources 2011 Mid Load Forecast After DSM without initial LNG

Legislated Constraints 5 (a) (b) (c) (d) (e) (f) (g) Achieve electricity self-sufficiency Utilize DSM to reduce expected demand by 66% by 2020 Generate 93% of electricity in BC from clean or renewable energy Keep electricity rates amongst the lowest in North America Reduce GHG emissions by 33% below 2007 levels Become a net exporter of electricity from clean or renewable resources Achieving these objectives without the use of nuclear power

Electricity Supply Resources 6 Power Smart (demand-side management program); Heritage Hydro (existing hydroelectric units and the proposed Site C facility); Heritage Thermal (existing thermal units); Resource Smart (upgrades to existing heritage hydro facilities); Downstream Benefits (the Canadian Entitlement from the Columbia River Treaty); Non-Firm/Market Imports 2, 500 GWh allowance, and Electricity Purchase Agreements (EPAs) with IPPs. Of these seven mechanisms, only three (Power Smart, Resource Smart, and EPAs) are able to increase energy supply in the future given the policy constraints that currently exist within the province.

Unit Energy Cost at Busbar om Bi se d W oo d Ba as R un s -o f-R O iv ffs er ho re W in d or e W SW M ns h O Pr ke t ar M M id -C Bi og as G eo th er m al Si te C C og en $700. 00 $600. 00 $500. 00 $400. 00 $300. 00 $200. 00 $100. 00 $0. 00 ic e $/MWh 7 Average price given by with range of costs given by the vertical black line

Import and Export Revenues 8 $400 $350 $ (millions) $300 $250 $200 $150 $100 $50 $0 Exports Washington Imports California Others

9 Price of Electricity in U. S Markets In the BC Hydro 2013 Annual Report, the market price forecast for electricity in 2014 is $29. 23/MWh

Conclusion 10 Remove electricity and replace revenue in definition of self-sufficiency Revenue self-sufficiency would require export revenues to exceed import costs Allows profitable trading activity to � maintain low rates � reduce the need for expensive EPA

Reference: Sopinka, A. and Pitt, L. (2013). British Columbia Electricity Supply Gap Strategy: A Redefinition of Self-sufficiency, The Electricity Journal, Volume 26, Issue 3, pp. 82 -88, http: //dx. doi. org/10. 1016. 03. 003 11

12 Updated cost of generation options