The pre-eminent solution to the climate crisis lies first in greening the power sector, then electrifying everything. An essential part of this clean transition lies in establishing a system of energy procurement that promotes decarbonization while contributing to economic development.
New research by Simon Fraser University’s Clean Energy Research Group (CERG) suggests we draw from the private and local ownership models of B.C., Quebec and Norway to combat the climate crisis through power procurement regulation.
Canada is taking some bold steps on climate. The federal and B.C. governments have announced climate action plans (here and here) that will take effect over the next 30 years with the goal of reaching net-zero emissions by 2050. The scary news is that even modest adoption scenarios require the scale of electrification to be massive, and the infrastructure requirements to support these demands have yet to register with governments and citizens alike.
B.C., however, is well positioned to reassess its generation strategy. The province is replete with raw renewable resources. The opportunity to develop power generation assets for both domestic and export markets is significant. Yet, there is a lack of a reliable long-term development plan to support a carbon transition.
In Working Paper No. 1, CERG estimated the contentious Site C Clean Energy Project would only account for a mere 10 per cent of the province’s future energy demand driven by electrification and demographic shifts. It’s unknown how new demand will be met. Since 2017, BC Hydro’s primary mechanism for signing Independent Power Projects (IPPs), the Standing Offer Program, has been suspended — due in part to a scathing review of the program’s cost to ratepayers. The committed development of the Site C facility, despite significant cost overruns, has helped maintain the province’s IPP inertia.
Nearly two years after the province’s IPP program stalled, B.C. made its clean energy ambitions clear with the 2019 Zero-Emissions Vehicle Act. The act, partly driven by a series of dire warnings by global climate studies published in late 2018, mandates that light-duty electric vehicles consist of 10 per cent of zero-emission vehicle sales by 2025, 30 per cent by 2030 and 100 per cent by 2040. To help meet these targets, the government has planned a substantial increase in charging stations to address consumers’ concerns about the distance limit of electric vehicles. The overarching question is: Where is the additional power needed for this transformation going to come from?
Working Paper No. 5 from CERG suggests a reboot of the IPP program that avoids past pitfalls by drawing upon partial provincial successes from before its suspension, and looking to the successes of Quebec and Norway in IPP regulation. B.C., Quebec and Norway all rely on some form of independently generated electricity that is then sold to their grids. All three have also prioritized clean energy to address the climate crisis and have used IPPs to promote renewable energy over fossil fuels. The paper explores how pre-planning support, resource licensing, grid access and calls for tender can be regulated to promote diversification of supply, with reference to all three cases’ experiences.
The looming, huge power deficit in the coming decades can be fertile grounds for advancing reconciliation by provisioning First Nations, often the title owners of raw renewable resources, to become economic engines for their own communities by developing local power resources that enable them to compete in a free market for electricity. Indeed, the report finds that the relative success of Quebec and Norway lies in increasing both their renewable capacity and the diversity of that capacity, along with the value of municipal energy ownership. Bringing renewables with different peak production times online helps to fill in production gaps and effectively resolve the problem of intermittency inherent in most single forms of renewable energies.
The opportunity for an extensive IPP renewable boom in B.C. exists partly because the connected West Coast grid allows the sale of electricity to the United States at premium pricing during their summer demand peak for cooling. California simply does not have adequate in-state capacity to provide adequate clean energy, as we see from the current rolling blackouts there. This presents a significant investment opportunity for IPP storage and generation of electricity here in B.C. The return on investment would ensure ratepayers in B.C. will continue to pay the lowest global electricity pricing for decades to come.
The scary news about decarbonizing the economy is the scale of electrification and infrastructure requirements that have yet to register with governments and citizens alike, write Luke Faulks and @realandyhira. #CleanTech #NetZero #ClimateChange
By adopting a more open system of bids and transmission access, while placing protections on waterways for public entities, the province can push the private sector towards the innovative development of non-hydroelectric resources. A better thought-out regulatory system can also promote remote communities’ economic development and Indigenous reconciliation through a more purposeful embrace of local utilities.
A great IPP reboot could lead to a more inclusive green jobs economy for B.C. We just have to ensure and regulate a fair access and fair cost-base playing field to trigger the game.
Anil (Andy) Hira is a professor of political science at Simon Fraser University and the director of the Clean Energy Research Group.
Luke Faulks is an undergraduate student of political science and history at Simon Fraser University. His research involves policies and regulations aimed at promoting deep de-carbonization to prevent catastrophic climate change.