The British Columbian renewable energy sector is back on the straight-away after a few tight corners over the past few months. First, there was the economic downturn. Then, the British Columbia Utilities Commission (BCUC) decided that it wouldn’t endorse BC Hydro’s 2008 Clean Power Call. 

Despite these setbacks, the provincial government has reiterated that BC’s renewable energy sector will forge ahead as planned.  In a recent speech to the Union of BC Municipalities, Premier Campbell stated that “[BC] will give bioenergy and other clean power producers the certainty that they need to invest literally billions of dollars and create literally thousands more jobs in the province of British Columbia.”

The BCUC put the brakes on renewable power
The economic downturn had the potential to freeze the renewable energy sector in BC. But because BC Hydro initiated the 2008 Clean Power Call before the markets collapsed, it looked like the renewable energy sector would suffer much less than anticipated. At least, that was until the BCUC, the provincial energy regulator, rejected BC Hydro’s 2008 Long Term Acquisition Plan (LTAP) on July 27, 2009.

The BCUC reviews each LTAP application made by BC Hydro. In finding that the 2008 LTAP was not in the public interest, the BCUC made two findings that are particularly troublesome for BC’s renewable energy sector. First, the BCUC did not approve a specific acquisition target for the 2008 Clean Power Call.  BC Hydro was seeking approval to enter into electricity purchase agreements (EPAs) for up to 3,000 GWh/year of new renewable energy generation. 

Second, the BCUC did not agree with BC Hydro’s request to reduce its reliance on the aging, natural gas-fired Burrard Thermal power plant from 6,000 GWh/year to 3,000 GWh/year. Instead, the BCUC decided that Burrard Thermal should be relied on for 5,000 GWh/year for planning purposes. This meant that, from the BCUC’s perspective the 2008 Clean Power Call — and its 2,100 GWh/year net new renewable generation — was unnecessary.

Opponents of the Clean Power Call were quick to declare that the BCUC decision was, in effect, a wholesale rejection of independent power production in British Columbia. Luckily, this is far from the case.   

The BC Government back in the driver’s seat
The BCUC decision clearly irked the provincial government. Billions of dollars of investment were at stake, as were the province’s climate and energy plans. The Minister of Energy, Mines and Petroleum Resources responded first, stating that the government had no plans to increase the use of Burrard Thermal as a result of the BCUC decision. Then, a few weeks later, the Premier addressed the issue in the Speech from the Throne, stating that the BCUC will receive specific direction to ensure the phase out of Burrard Thermal and to act on the BC Energy Plan and Climate Action Plan.

The BCUC’s insistence that BC Hydro increase its reliance on dirty power conflicts with the BC Energy Plan. This Plan calls for clean or renewable electricity generation to continue to account for at least 90 per cent the province’s energy use. The provincial government is pursuing carbon neutral energy generation, and phasing out Burrard Thermal is a critical step in meeting this goal.  

But regardless of continued government support, the 2008 Clean Power Call will be delayed. BC Hydro may still enter EPAs if it thinks prudent to do so, but each project will be subject to individual review by the BCUC. This one-at-a-time review process will necessarily delay the original timeline for the 2008 Clean Power Call. But expect BC Hydro and the government to take steps to minimize any such delays in order to avert any harm to the provincial economy.

Driving the BC Energy Plan forward
The provincial government is holding fast to the BC Energy Plan. The province is moving towards its goal of electricity self-sufficiency by 2016, and is determined that it will do so through clean or renewable generation. In addition to the Clean Power Call, the province has a Standing Offer Program for smaller clean projects that generate up to 10 megawatts of power, and a two-phase Bioenergy Call for Power which focuses on converting biomass into clean, cost-effective and carbon-neutral electricity. 

The government has also awarded $47 million in funding to thirty-four clean energy projects through the Innovative Clean Energy (ICE) Fund. The ICE Fund has invested in a broad range of technologies and sectors, including bioenergy, geothermal, solar and other alternative energy sources. Lastly, the government committed that all new electricity generation projects will have zero net greenhouse gas emissions. 

Climate action remains a political priority. In June 2009, the Premier appointed John Yap to be the Minister of State for Climate Action. The Premier also continues to chair the Cabinet Committee on Climate Action, which brings together key government ministries to make policy related to climate change.

Given the province’s commitment to clean energy and combating climate change, renewable energy generation will continue to move forward in BC. Billions of clean-energy dollars are poised to enter the provincial economy, making it likely that the past few months were nothing more than bumps in the road to BC’s renewable energy future. 

Cheryl Slusarchuk is a partner in the Vancouver office of McCarthy Tetrault LLP practicing in the business law and technology groups. She is the president of the B.C. Premier’s Technology Council and serves as Chair of the B.C. Climate Action Team.

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