One of the arguments against Site C dam is that, when it begins producing power in 2024, much of that output will be surplus to B.C.’s needs, and any electricity it sells will be at a steep discount.
But B.C. has six years to try to develop new markets or domestic uses for its power before the dam starts producing electricity, and some energy experts dispute the low load forecasts that the BC Utilities Commission assumed when it issued its final report on Site C.
“The need for energy in B.C. is only going to skyrocket,” said Jae Mather, executive director of Clean Energy BC.
Should a liquefied natural gas industry ever actually develop in B.C., it could provide additional industrial demand. An aggressive push for greater electric-vehicle adoption and switching from natural gas to electricity for heating could also add additional demand.
But the biggest demand would come from electrifying the natural gas sector and removing regulatory hurdles that make it difficult for companies to build data centres and server farms in B.C., Mather said.
“Electrifying northeast gas is vital,” Mather said. “It sits at the core. Changing our business models and procurement models in B.C. so that we’re compatible with the high-tech industry is the other key one.”
Some electrification of natural gas processing in northeastern B.C. has already occurred, and Mather said it could easily be expanded, creating a significant additional demand for electricity.
While that would add even more costs to BC Hydro for new transmission lines, federal government clean-energy infrastructure funding is available to help pay some of those costs.
The second-biggest demand – one with significant economic benefits – would be positioning B.C. to use its high-tech talent, its abundant clean power and relatively cold climate to become a hub for data centres and server farms, which consume huge amounts of electricity.
“The only reason B.C. is not the server farm capital of the planet Earth is because of our procurement exercises and the way that we manage grid connections,” Mather said.
Any company wanting to connect a new server farm into B.C.’s grid has to go through a two-year study process, Mather said. In Europe, where Mather spent 20 years, the process takes about three months, he said.
He hopes to see the BC NDP government and BC Hydro reconsider their policies to make it easier for data centres and large server farms to be built in B.C.
One other potential new market is sales through emerging energy imbalance market in the U.S., which pools regional power to manage supply and meet demand.
In 2018, BC Hydro’s power-trading arm, Powerex, will become the first Canadian entity to join the western Energy Imbalance Market (EIM), which includes eight western U.S. states and five public utilities, serving a market of 38 million power customers. By 2020, six more utilities are expected to join the EIM.
The market was developed, in part, to help utilities manage the growth of wind and solar power, which is intermittent and unpredictable. It is a real-time trading system in which its members can buy and sell power in five- and 15-minute intervals.
Powerex has been doing this sort of power trading with California for years. By joining the EIM, Powerex will simply be doing what it has been doing for years, but in a bigger market.
“It allows any of these utilities that have excess (power) to offer that into the real-time market, where buyers can then take advantage of what may be a lower cost energy, in order to serve their own needs,” said Steven Greenlee, senior public information officer for the California ISO, which runs the EIM’s control centre.
“It is a big market for power, and the thing that makes it so appealing is that it gets even a little better each time a new entity comes in.”
However, Powerex itself does not expect entering the EIM will significantly increase electricity exports. In an email to Business in Vancouver, Powerex stated the EIM market “won’t be that significant.”
Mather thinks Powerex may be downplaying the EIM’s potential for power exports, partly because of the negative experience it has had with California in the past.
After California deregulated its own power system and began experiencing brownouts, it was forced to buy power from other utilities and jurisdictions, including B.C., between 2000 and 2001, at steep prices.
In 2013, the U.S. Federal Energy Regulatory Commission (FERC) determined that Powerex and 15 other power traders had been engaged in manipulating the market and ordered Powerex to pay back $1 billion to California. Despite that finding, Powerex has continued to sell power to California.
Because of B.C.’s abundant clean disptachable power, Mather thinks the EIM market could, in fact, provide a growing market for B.C. power.
“I think it could be quite a big deal,” he said.