Clean energy is cost-effective
Comparing '60s-era BC Hydro infrastructure with new, private generators is akin to apples and oranges
The panel appointed by Premier Christy Clark and the Minister of Energy and Mines to review BC Hydro made some good recommendations to reduce rising electricity costs for B.C. families. British Columbians should be pleased with their report.
It is unfortunate, however, that critics were quick to use the report to continue to spin misinformation about the cost of electricity generated by B.C.'s clean energy producers.
Clean energy producers are smalland mid-sized companies, often B.C. entrepreneurs and engineers, as well as renewable energy innovators working on an international scale. They develop renewable energies like wind, run-of-river, biomass or solar projects in rural and first nations communities across our province.
No less than two-thirds of B.C.'s first nations are also participating in B.C.'s clean energy sector through direct ownership, equity investments and various partnership arrangements. Their involvement in this industry means new jobs and economic benefits that would otherwise not exist.
Moreover, clean energy's contribution to a healthy environment is recognized by leading climate scientists such as Nobel laureate, Dr. Andrew Weaver.
Lost in the critics' misinformation is the fact that clean energy producers provide good, fair and long-term value for money for B.C.'s ratepayers. Our electricity costs less if not the same as electricity produced by BC Hydro.
The reality is that new supplies of electricity cost more to build and generate than old supplies of electricity, whether it is from clean energy producers or BC Hydro.
Regardless of who builds it, you can't compare the cost of a new electricity project with one that was built by BC Hydro in the 1960s or '70s. That's like comparing the cost of building a house in the 1960s with the cost of building a house today, and complaining that the house built in 2011 is more expensive. It's an apples-to-oranges comparison critics frequently trot out - and they're wrong. Based on BC Hydro's most recent competitive bidding process - the Clean Power Call - the estimated cost to BC Hydro to purchase firm electricity and handle it in its system is about $124/MWh.
But the average price paid to the clean energy producer at the "plant gate" is about $100/MWh.
Clean energy producers produce non-firm electricity that BC Hydro pays a much lower price for, which is included in the $100/MWh price.
This price is fixed in a contract in today's dollars for terms of 20, 30, or even 40 years.
BC Hydro conducted a review of the Clean Power Call that showed that the prices they paid for this clean electricity were "at the lower end of the energy price ranges of other North American jurisdictions."
The clean energy assets being built today are tomorrow's low-cost generating assets.
The cost of their electricity in 20, 30 or 40 years will be much lower than the cost of new electricity generated at that time.
The same principle was at work when W.A.C. Bennett built B.C.'s large hydro dams. British Columbians paid the upfront capital costs and locked in the operating costs at a long-term and stable price that later generations enjoy today, at low cost.
Today's contracts with clean energy producers are no different, with one exception: the project development responsibilities, business risks and project costs are borne by the private sector, not the ratepayer.
B.C.'s electricity system, owned by the public and augmented with clean private sector electricity, is a common sense model that uses the best of both worlds to deliver cost-effective electricity to B.C. families and industry.
Thus, despite the allegation that BC Hydro's rate increase was caused by private sector power purchases, our electricity accounted for only $94 million, or 2.6 per cent, of BC Hydro's proposed 32-per-cent rate increase over three years. Critics make another apples-to-oranges comparison by comparing the cost of firm, clean electricity generated in B.C., with nonfirm, brown electricity purchased on the U.S. spot market.
Increasing spot market purchases is not a sustainable solution for ratepayers or our economy.
Spot market power is dirty power from American coal plants. It's also volatile. BC Hydro even forecasts that spot market prices are set to rise 50 per cent in 10 years, and 100 per cent in 20 years.
Further, importing U.S. power means we are exporting B.C. jobs.
It's time the critics of private sector power come clean. Stop comparing apples to oranges. And stop risking made-in-B.C. jobs and economic benefits for B.C. communities and first nations.
It's time for the province to continue to build on its leadership and innovation in clean electricity.
Paul Kariya is executive director of the Clean Energy Association of British Columbia.
Comparing '60s-era BC Hydro infrastructure with new, private generators is akin to apples and oranges
The panel appointed by Premier Christy Clark and the Minister of Energy and Mines to review BC Hydro made some good recommendations to reduce rising electricity costs for B.C. families. British Columbians should be pleased with their report.
It is unfortunate, however, that critics were quick to use the report to continue to spin misinformation about the cost of electricity generated by B.C.'s clean energy producers.
Clean energy producers are smalland mid-sized companies, often B.C. entrepreneurs and engineers, as well as renewable energy innovators working on an international scale. They develop renewable energies like wind, run-of-river, biomass or solar projects in rural and first nations communities across our province.
No less than two-thirds of B.C.'s first nations are also participating in B.C.'s clean energy sector through direct ownership, equity investments and various partnership arrangements. Their involvement in this industry means new jobs and economic benefits that would otherwise not exist.
Moreover, clean energy's contribution to a healthy environment is recognized by leading climate scientists such as Nobel laureate, Dr. Andrew Weaver.
Lost in the critics' misinformation is the fact that clean energy producers provide good, fair and long-term value for money for B.C.'s ratepayers. Our electricity costs less if not the same as electricity produced by BC Hydro.
The reality is that new supplies of electricity cost more to build and generate than old supplies of electricity, whether it is from clean energy producers or BC Hydro.
Regardless of who builds it, you can't compare the cost of a new electricity project with one that was built by BC Hydro in the 1960s or '70s. That's like comparing the cost of building a house in the 1960s with the cost of building a house today, and complaining that the house built in 2011 is more expensive. It's an apples-to-oranges comparison critics frequently trot out - and they're wrong. Based on BC Hydro's most recent competitive bidding process - the Clean Power Call - the estimated cost to BC Hydro to purchase firm electricity and handle it in its system is about $124/MWh.
But the average price paid to the clean energy producer at the "plant gate" is about $100/MWh.
Clean energy producers produce non-firm electricity that BC Hydro pays a much lower price for, which is included in the $100/MWh price.
This price is fixed in a contract in today's dollars for terms of 20, 30, or even 40 years.
BC Hydro conducted a review of the Clean Power Call that showed that the prices they paid for this clean electricity were "at the lower end of the energy price ranges of other North American jurisdictions."
The clean energy assets being built today are tomorrow's low-cost generating assets.
The cost of their electricity in 20, 30 or 40 years will be much lower than the cost of new electricity generated at that time.
The same principle was at work when W.A.C. Bennett built B.C.'s large hydro dams. British Columbians paid the upfront capital costs and locked in the operating costs at a long-term and stable price that later generations enjoy today, at low cost.
Today's contracts with clean energy producers are no different, with one exception: the project development responsibilities, business risks and project costs are borne by the private sector, not the ratepayer.
B.C.'s electricity system, owned by the public and augmented with clean private sector electricity, is a common sense model that uses the best of both worlds to deliver cost-effective electricity to B.C. families and industry.
Thus, despite the allegation that BC Hydro's rate increase was caused by private sector power purchases, our electricity accounted for only $94 million, or 2.6 per cent, of BC Hydro's proposed 32-per-cent rate increase over three years. Critics make another apples-to-oranges comparison by comparing the cost of firm, clean electricity generated in B.C., with nonfirm, brown electricity purchased on the U.S. spot market.
Increasing spot market purchases is not a sustainable solution for ratepayers or our economy.
Spot market power is dirty power from American coal plants. It's also volatile. BC Hydro even forecasts that spot market prices are set to rise 50 per cent in 10 years, and 100 per cent in 20 years.
Further, importing U.S. power means we are exporting B.C. jobs.
It's time the critics of private sector power come clean. Stop comparing apples to oranges. And stop risking made-in-B.C. jobs and economic benefits for B.C. communities and first nations.
It's time for the province to continue to build on its leadership and innovation in clean electricity.
Paul Kariya is executive director of the Clean Energy Association of British Columbia.
