Executive Summary

Of all the forces that will shape global outcomes in the next few decades, none is as compelling as the need to develop alternative energy sources.

This paper proposes that British Columbians use their enviable combination of natural energy sources to expand and develop electrical generating capacity, until 100% of our primary energy comes from renewable sources.

To be successful, we must reconfigure our electrical generating system to an optimal form. Firstly, we should expand the amount of on-demand hydroelectric power capacity within public control. This in turn will allow independent power producers to add additional generating capacity from wind turbine farms, run-of river projects, tidal generating stations, and other forms of renewable (but intermittent) electrical generation. In practice, power would be drawn firstly from these intermittent sources, when and as available. The role of BC Hydro would be to supply baseline power needs, and to balance demand and supply from the on-demand hydroelectric resources within its control.

Suggested steps to achieve this are:

1. Construction of the Peace River Site C project.
2. Nationalization of Alcan's Kemano power station and the Nechako watershed.
3. Completion of generating capacity at existing BC Hydro stations, such as Revelstoke.
4. Contracting with independent power producers for substantial quantities of "as available" power from wind, microhydro and other renewable sources.

British Columbians clearly have a unique opportunity to be world leaders in renewable energy. To proceed, we need to plan about $4-5 billion investment in crown agencies, primarily BC Hydro. Our choices should be based on pragmatism, not on political ideologies or pressures.

We can have a pristine natural environment and an unequalled standard of living if we make prudent choices for our energy future now.

Currently, about 40% of the energy used by Americans is derived from petroleum, with natural gas and coal each accounting for about 23% of total consumption (reference #1). Figures for global energy consumption are very similar (reference #2). It is becoming painfully obvious that our heavy reliance on fossil fuels for approximately 85% of human energy consumption will of necessity come to a rapid end.

It is now recognized that globally we have already reached (or will reach within a few years) a state of peak oil production. Almost certainly within five years, petroleum supply will enter an irreversible decline: prices of all goods and services will rise, sending shock waves through the economies and politics of the world. There is ample evidence this process has already begun.

Many authors whose credentials are impeccable have outlined the scenarios that may engulf us if we do not wean ourselves of such a high dependence on petroleum, and the futures they depict are not pretty ones. References 3 to 9 (given below) detail these concerns.

The forecast for natural gas supply has radically changed in the last few years, and is now quite pessimistic (ref. #10). Although global coal reserves remain substantial, the environmental cost of extracting those reserves is steeply rising. More importantly, increased burning of coal carries unacceptably high pollution, with attendant health risks, such as asthma and possibly autism.

Relying on new fossil fuel discoveries is not an option. To extract the remaining petroleum reserves from the crust of our planet at current rates (even if that were possible, which is almost certainly not the case) is simply to ensure an even greater crash when they are exhausted. The potential to destroy civilization is not to be discounted. (references #11, 12).

No less relevant is the fact that all fossil fuel consumption carries a heavy carbon dioxide burden on the Earths atmosphere. It is now beyond dispute that this contributes substantially to the rapid climate change now being observed. Climate change may not be entirely harmful, and it may not be entirely avoidable, but the precautionary principle implies we should choose to mitigate this risk. In particular, global warming has already shown some very serious consequences for British Columbia, as we watch our interior forests die off to grassland, and grasslands turn to desert.

The only remaining alternatives for our energy future are nuclear and renewable energy sources. The sum total of a half-century of experience with nuclear power reveals that it is neither cheap nor safe. The only prudent choice remains to transfer our energy dependence from fossil fuel sources to renewable energy forms, almost all of which involve electricity at some stage or another.

Almost all forms of renewable energy come directly or indirectly from the Sun. Tidal energy comes from the gravitational effect of the moon.

Every day the Sun provides approximately 17,800 times more energy to the Earth than we consume globally in all human activities (ref. #13). In principle then, if we can successfully harness or capture just 0.0006% of this energy, we can meet all our energy needs and replace our dependence of fossil fuels entirely. The problem is that this energy is distributed widely and in many forms: heat, light, weather, wind, waves and rainfall. So far, rainfall as hydroelectric energy (the gravitational energy released by falling water) is the only form widely exploited. The European Union is committed to obtaining 20% of its energy from renewables by the year 2020 (reference #14). Some countries are seriously talking about using only 100% renewable energy.

British Columbia is far better endowed with potential sources of renewable energy than European countries. Despite the fact that we are in a most favourable position, (or perhaps because of it, since hydro development was relatively easy here), we have barely begun to develop wind and microhydro (also known as run-of-river hydro) projects, while tidal power has barely been examined. In fact none of these energy projects are yet operational in BC.

All of these new forms of renewable energy can only be harvested on an "as available" basis. That is, all require some other source of power "on demand" to be there when the wind is not blowing, when the stream runs dry, when the tide is slack, when the sun is set or hidden. This has led to a paradox: we can't develop non-renewable energy sources unless there's a backup, usually from gas-fired electrical generators. So to increase renewables, we tend to increase our use of fossil fuels, driving up demand even more, and overloading our atmosphere with carbon dioxide even more.

One way to increase our use of wind, microhydro and tidal power would be to store the energy in some form: for example by pumping water uphill into a reservoir which can be drawn down again as needed. Of course a vastly simpler solution is to draw from large reservoirs already in existence.

Hydro generating stations drawing from large reservoirs are the ideal solution (in fact, the only viable solution) to this paradox. Hydro turbines can be turned on very quickly to meet peak demand, and turned off as quickly as demand falls. But since river flows cannot fluctuate as wildly as demand, generating stations meeting rapidly variable demand should not only draw from large reservoirs, they should also empty into downstream reservoirs or the ocean. The best sites in BC to provide reservoir-to-reservoir power generation are those on the Peace River system, and at the Kemano power station.

Site C is a proposed hydroelectric generating station on the Peace River, located 7 km southwest of Fort St. John. It's strategic advantage is that it would work in tandem with the other existing Peace River stations, at the Bennett dam and Peace dam, allowing optimal draw-down from the successive reservoirs, and optimal control of downriver flow. Additionally, it is easily linked to the existing transmission switchyard at Peace Canyon.

The Site C project has been well documented and reviewed since it was first developed over 25 years ago. Development has not proceeded heretofore due to lack of power demand, a situation now reversed. An earthfill dam would create a 51 square km reservoir. The powerhouse would contain six units with total capacity of 900 MW, which would supply 4,800 GWh per year to the BC Hydro's system. BC Hydro currently owns most, but not all of the lands that would be affected. The capital cost of the project is $1.9 billion (2003 dollars) and would take 9 years to complete. It would deliver power at $53 per MWh cost (reference #15).

The environmental impacts of this development are significant but acceptable by many criteria. Positive environmental impacts are possible:

1. A moderating effort on temperatures surrounding the reservoir, increasing the growing season on adjacent farmland; and
2. More control over the downriver discharge of waters that feed the Peace-Athabaska wetlands (where the Peace River empties into Lake Athabaska), which form the largest freshwater delta in the world. It should be noted that the delta is a major migration and nesting area for birds, and the disruption caused by the two earlier power developments on the river system has had a very negative impact on this sensitive delta habitat. Development of Site C potentially has the ability to restore the natural pattern of heavy spring runoff that fed the delta prior to the Bennett and Peace dams.

The Kemano Completion Project during the 1980s sought to increase the flow of water from about 70% to 86% of the watershed's supply to the Kemano station, but the project was stopped prior to completion. A series of amendments was made to the Alcan water license in 1997 and after. The 1997 agreement essentially granted Alcan water rights in perpetuity provided the company met certain conditions, which they have yet to fulfil. This agreement explicitly contains a clause that allows cancellation or arbitration in the event of disputes occurring up until January 1, 2012 (reference #17).

In 2004 the District of Kitimat brought an unsuccessful lawsuit against Alcan in the Supreme Court for British Columbia for breech of conditions of the water license. However, the Supreme Court did leave other remedies open (reference #18). The District continues to press the claim that Alcan's power sales contravene the provisions of the Industrial Development Act and the terms of its water license, which give it access to a public water resource for the specific purpose of aluminum smelting (reference #19).

The Kemano power station presents almost unbelievably ideal conditions for supplying on-demand power: 896 MW of power (about 7% of BC's electrical capacity) from a vast, well-watered reservoir, dropping 800 m vertically (nearly 16 times the drop of Niagara Falls) almost to the edge of tidewater. This allows it to generate electricity more cheaply than virtually any other location in the world. However, as currently operated, the station is operated according to very different criteria than for on-demand power: it produces a steady output for aluminum smelting, with up to 50% of the power being sold for export. This represents a serious misuse of its unique capabilities. If operated as a public utility, it would allow phasing out of the increasingly costly gas-fired generating stations at Burrard and Campbell River which are presently used to balance BC Hydro's load demands. Public administration of the watershed would also improve the management of the water resource necessary to maintain viable fisheries in the Nechako and upper Fraser rivers. Of course, a contract would have to be made with Alcan to provide long-term power from the provincial grid at fixed rates, in order to maintain aluminum smelting at Kitimat

BC Hydro's Revelstoke station (shown above) is a conspicuous example of a generating station equipped to generate its average rate of power production, but never completed to fulfill the original design which would allow for greater load fluctuation. Only 4 of the 6 turbines that the station was built for have ever been installed. Completion of this capacity is described in BC Hydro's 2004 Integrated Electricity Plan (ref. #20). Such projects should be given priority.

Within the past two years, BC Hydro has entered into contracts with independent power producers to provide modest amounts of power from renewable sources, including wind and microhydro (run-of-river). Several of these agreements have already folded, due to the constraints on operating conditions and other terms offered by Hydro, which itself is currently constrained in its efforts to meet demand.

With the robust capacity to meet variable power demands that Site C, Kemano and Revelstoke would provide, BC Hydro would be in a much better position to negotiate viable contracts for "as available" electricity from these sources, and to phase natural gas-fired generation altogether.

Our goal should be 100% of our electricity from renewable sources, a reliable domestic supply, and additional power for export as a significant source of provincial revenue.

It is not the purpose of this paper to enter into discussion of public versus private power generation, or nationalization versus privatization. These arguments have traditionally followed political lines. Instead, I urge the committee and industry professionals to take a pragmatic approach. However, it is my personal belief that there is a place for both public and private power suppliers within a publicly-operated system.

If we were to create a perfect electrical system for BC from scratch, what would it look like? It would have distinct differences from the ad hoc way it has developed, and is being presently directed!

It would seem important to keep the key strategic assets (that is to say the largest generating stations, and especially those able to manage the supply side with greatest dexterity) within public hands. Smaller power stations, especially those using new and emerging technologies, may be better suited to operation by the private sector. Overall, a strong crown corporation is needed to manage the whole network as a functioning system. Crown corporations have the advantages of being able to raise funds outside the public-sector constraints, are not strongly profit driven, and retain a high degree of public accountability.

In order to exploit the many sources of renewable energy that are possible, BC Hydro needs to have increased capacity to provide "on demand" hydroelectricity. Three key steps to managing supply are: 1) construction of Peace River Site C station 2) addition of the Kemano station to its system 3) completion of Revelstoke and similar projects. This will then allow the fourth vital step, a prominent role for wind and microhydro projects.

These steps will provide a huge return on investment to all British Columbians in the form of sustainable economic activity, jobs for our citizens in all industries that are so dependent on inexpensive, reliable power, plus revenue from electricity exports.

It will require a substantial financial commitment of the part of the British Columbia government to realize this goal. I call your committee's attention to this challenge.