Province Signs Agreement with BC Hydro and Independent Power Producers

High Voltage Structure

By James Noble

October 29, 2015

The B.C. government, BC Hydro and the Clean Energy Association of B.C. have signed a memorandum of understanding promising to work together to plan for B.C.’s future energy needs.

The new agreement will help the independent power sector collaborate with BC Hydro, improve procurement processes and explore more opportunities with First Nations.

Integrating independent power producers (IPPs) into B.C.’s energy mix was central to the province’s energy policy under former premier Gordon Campbell, as the government attempted to position B.C. as a leader in renewable energy development. However, over the past five years, the relationship between BC Hydro and the IPPs has become strained.

Critics of B.C.’s IPPs claim that the sector provided power that was not needed by the province and drove up consumer rates. Proponents, on the other hand, claim that the IPP sector diversifies B.C.’s energy supply. The new agreement provides the parties with an opportunity to turn the page and clear the channels of communication.

While it offers little in terms of concrete obligations, the new arrangement may help the B.C. government re-evaluate its current climate action policies, which is something it must do in preparation for the upcoming Paris climate change conference in November.

Under the new agreement, the parties will meet at least quarterly to discuss innovative renewable energy technologies.

Still, as the Vancouver Sun reports, it’s unlikely the province will have much demand for new independent power production before 2030.  The planned site C hydroelectric dam is intended to supply B.C.’s electricity needs for the foreseeable future.

According to a Globe and Mail report, the province is instead looking to export electricity, which could create a market for the independent producers. Energy Minister Bill Bennett is apparently interested in selling power to Alberta to reduce that province’s demand for coal-fired electricity.

BC Hydro currently has more than 100 power purchase agreements with IPPs, which account for roughly 25% of the province’s electricity, or enough to power 1.5 million homes.

The agreement will remain in place until the end of 2017.