In the second installment of a two-part series examining the failed private power model in BC, geologist and concerned British Columbian George Gibson focuses on the proposal to dam and divert the Kokish River as a prime example of the flawed BC Liberal energy policy.

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An introduction and promotion from the proponents of the Kokish Project – benefits of this project:

Security of power supply: In winter, North Island communities not only utilize more electricity, they also experience a high incidence of power outages. Unlike many BC river systems, where peak flows occur during spring freshet, flows on the Kokish River are at their highest in late fall and winter. These high flows will make it possible for the Project to reliably generate enough power to supply the entire North Island.

Really?…That would be a neat trick. Here are some operational realities courtesy of Environment Canada and BC Hydro:

BC Hydro reports that “cold weather equals peak electricity demand” and makes specific reference to a period of sustained cold temperatures starting November 22, 2010 which placed an additional load of almost 2,000 MW on the system. A review of the Water Survey of Canada historic hydrometric data for the Tsitika River (the basis for a synthetic flow model for the Kokish) shows that this project would have been off line for the entire duration of this cold snap. Furthermore, a review of a less severe cold snap from January 15 – 17, 1970 using historical hydrometric data directly from the Kokish River shows that only a total flow of 4.5 m3/s would have been available. This facility requires a minimum flow of 21 m3/s, over and above minimum in-stream ecosystem requirements, for full 45 MW capacity output. Once again, this facility would have been either off line or at severely restricted capacity.

This blatant collusion is further propagated in a fact sheet example provided by the Clean Energy Association of BC promoting the urgency for IPP development. Colder than normal temperatures between January and April 2008 combined with unscheduled unit outages and other operational constraints created short term energy shortfalls that cumulatively required the import of 2,300 GWh. The Clean Energy BC Fact Sheet on Run-of-River explicitly promotes this technology as “providing a continuous source of clean, green renewable energy with minimal environmental impact.”

Firstly, BC Hydro is not in the business of importing expensive on-peak market electricity unless these imports are intended to cover short term capacity issues. The demand driver in this case was cold weather. How much capacity relief did run-of-river power producers contribute during these conditions? Once again, the hydrometric data for the Tsitika River, over this period, shows meager flows during every single cold snap. The Kokish facility would not have been available to provide BC Hydro with any effective capacity support during these short term capacity shortfalls. Much of the imported 2,300 GWh (about 800 MW of additional average daily capacity over the four month period) would still have had to come from some other non-hydro source.

Even more ironic, is that the only non-hydro source of clean energy capable of providing this level of capacity support, is available right now from the Northwest Power Pool. Would it not make more sense for BC Hydro’s marketers to spend their time securing firm energy purchase agreements from the wind power producers located right on our door step?

Secondly, run-of-river IPPs are far from immune to unscheduled unit outages. We will now consider a major vulnerability unique to this type of infrastructure.

Seismic hazard risk and run-of-river infrastructure: Electricity self-reliance and public safety will be the first casualties.

The energy security mandates of BC’s Clean Energy Act, including private sector promotions of run-of-river development on Vancouver Island and along the coastal mainland, quite literally, have the greatest potential for catastrophic failure. This is for two reasons:

1.  Proximity to major geologically active fault structures that have a 100% probability of generating a destructive earthquake.
2. Inherent seismic vulnerabilities in run-of-river infrastructure that precludes cost-effective hardening measures.

Seismic hazards in BC are most severe along coastal regions and include two major offshore threats: “Canada’s equivalent of the San Andreas fault”, running from northern Vancouver Island to the Queen Charlotte Islands, and the Cascadia Subduction Zone, extending from northern Vancouver Island to northern California. The Cascadia Subduction Zone has been the source of massive magnitude 9+ earthquakes at intervals ranging between 300-800 years. The last one was on January 26, 1700….do the math! An even greater threat is posed by strain build up between these intervals that produces, on average, one onshore event per decade. These events are typically smaller in magnitude but occur much closer to built-up areas, as in the June 23, 1946 magnitude 7.3 earthquake centered beneath mid-Vancouver Island.

Infrastructure vulnerabilities to earthquake damage have now become a major consideration for populations in high hazard locations. Experience has repeatedly demonstrated that one of the most vulnerable components of critical  “lifeline” infrastructure are water supply systems. Equally vulnerable are wastewater or sewage systems. Water pipeline infrastructure is vulnerable because it is typically buried just below the surface where destructive surface wave energy is concentrated. Furthermore, analysis from the February 27, 2010 magnitude 8.8 offshore earthquake in Chile demonstrated that water pipelines were particularly prone to rupture when buried in loosely consolidated soils. Specifically it was observed that “areas within 200’ (or so) of river banks often suffered lateral spreads and settlements”. A partial tally of the damage to water supply pipelines in the Concepcion area alone included 72 breaks or leaks to large diameter welded steel pipes and over 3000 breaks in water mains and service laterals. One year later, the repairs were ongoing. In addition to this, wastewater systems suffered heavily, including damage to large diameter interceptor pipes and small diameter collector pipes.

None of the above findings bode well for a power generating facility dependent on a long water pipeline (penstock) to deliver water from an intake weir to a powerhouse. Specific features of the Kokish run-of-river project are supplied by the proponent:

Minimal requirement for new infrastructure: The Project’s proximity to existing roads and transmission lines will minimize requirements for new infrastructure, which will in turn reduce environmental impacts and clearing requirements, and help reduce project costs. The low level weir and intake will be located within 100 m of the Kokish Main Road on the east side of the Kokish River. The 9 km buried penstock will run parallel to the Kokish Main Road for about 80% of its length, and the powerhouse and switchyard will be situated on land that is immediately adjacent to the Telegraph Cove Road.

The Kokish run-of-river project is located only 150 km from the Nootka Fault, one of BC’s most seismically active regions. This is located essentially at the confluence of the “San Andreas of the north” and the Cascadia Subduction Zone. This is also very close to the location of BC’s most recent wake up call that rattled Vancouver Island last year.

In light of the information presented above, it should be obvious that not only is this project susceptible to catastrophic earthquake damage, it poses the additional risk of damaging or interfering with access to critical road and highway infrastructure. This is no trivial matter: A rupture anywhere along the 9km length of the Kokish facility’s penstock could cause the uncontrolled release of nearly 6,000 gallons of water per secon Damage at or near the powerhouse would be compounded by very high water pressure: 2,140 KPa or about 300 psi.

Where’s the value?

BC Hydro will be obliged to purchase 180 GWh/year from the Kokish run-of-river facility. This amounts to approximately 1/3 of 1% of BC Hydro’s total integrated system requirements and will contribute 0 MW of capacity support during peak system loads. This energy will cost BC Hydro approximately $18 million dollars/year, nearly the same amount of capital dedicated to vegetation management for Hydro’s entire system. Today, BC Hydro could purchase approximately 580 GWh of on-peak (high demand conditions) market electricity or in excess of 1000 GWh of off-peak (low demand conditions) market electricity for the same $18 million.

Proponents of the $200 million Kokish Project list additional benefits as the full-time employment of  approximately 70 people over the two year construction phase of the project. Like all other run-of-river facilities, the subsequent operation of this facility would be automated, requiring no further significant employment opportunities. The argument that this is an effective job creation strategy is a slap in the face to the ecotourism businesses established in the area. A single whale watching operation based in Telegraph Cove has contributed at least this number of man hours of employment with many more to come. Furthermore, their customers contribute to a cascade of economic spin-offs for the community. There is no Clean Energy Act directive to support sustainable family businesses that promote the importance of environmental stewardship.

LNG Exports to Asia to be powered by new clean energy projects: A complete loss of integrity and credibility for Government and Clean Energy Producers

This idea is a serious contender for the “Darwin Awards” as the most counterproductive initiative ever conceived. A brief review of one inconvenient reality that both Government and clean energy producers have chosen to ignore: The concept of thermal efficiency. This is the single most effective variable available to combat GHG emissions. Thermal efficiency is a measure of how efficient or wasteful a fuel burning process is. A few examples:

• typical automotive engine (gasoline) ~ 25%
• coal-fired power plant ~ 45%
• modern combined cycle natural gas power plant ~ 60%
• high efficiency natural gas appliance (furnace or water heater) ~  98%

This demonstrates how extraordinarily wasteful we are with our fossil fuel use. Any use other than for the purpose of heating contributes significant and unnecessarily GHG emissions. It is especially important to note that the use of electricity from a natural gas power facility for heating purposes reflects poor management of this resource.

The LNG proposal promoted by Premier Christy Clark is predicated on the use of natural gas to displace coal-fired power plants. In fact, by supporting this practice, the carbon footprint of BC’s natural gas will be increased dramatically. Pipeline transportation to the coast, conversion to LNG, and shipping to Asian markets all compound GHG emissions either directly or indirectly. It is important to remember, the construction process for the required infrastructure, including building new clean energy facilities, all produce significant GHGs. Furthermore, BC has no control over how this resource will be used at the other end. In a complete twist of irony, China uses a huge amount of natural gas for feedstock in the production of ammonia for petrochemical fertilizer. This is due, in part, to the vast tracts of fertile flood plains that have been sacrificed for massive hydropower projects. The use of natural gas for the production of ammonia has been specifically identified as having one of the highest intensities of GHG emissions.

DSM (Demand Side Management): The only practical, affordable, and effective option

The Smart Meter Program is a specific directive of the Clean Energy Act. It mandates that BC Hydro communicates a very simple message to its customers, in the most expensive way possible! It will cost  BC Hydro close to $1 billion to say “you’re screwed” to those customers unfortunate enough to rely on electricity to heat their homes. We have previously demonstrated a massive potential  reduction in the supply gap that would be possible by getting customers to fuel switch their heating demands from electricity to natural gas. This is already a “no-brainer” by today’s comparative energy costs. Pending future increases in electricity costs will only serve to force the issue. In fact, only about 20% of a typical BC household’s annual energy demands (25 MWh) require electricity: appliances and electronics(15%), and lighting(5%). The remaining 80% is split between space heating(60%)and water heating(20%). Therefore up to 80% of household energy use could be supplied by natural gas.

This option for fuel switching is a significant advantage for BC. A winter peaking energy profile allows for efficient substitution of domestic energy resources. In contrast, large export markets such as California, have summer peaking energy profiles where electricity-dependent cooling demands are the main drivers of energy consumption. The total annual energy requirements for BC’s residential sector are about 45,000 GWh. However, only about 9,000 GWh are dependent on electricity. This presents an opportunity for BC Hydro to once again become a highly profitable clean energy exporter using existing capacity from its heritage assets. These exports would be displacing the much less efficient use of natural gas for producing electricity to power California’s air conditioners.

The most efficient use of BC’s natural gas is for domestic energy requirements in high efficiency furnaces and water heaters. Natural gas committed to household energy use could easily eliminate any anticipated electricity supply gap for years to come. Furthermore, it would eliminate any dependence on private power producers and put a stop to the completely unnecessary sacrifice of our rivers and streams. Perhaps more importantly, BC would be able to ensure the most effective management of GHG emissions from this resource.

The race for BC to become a world leader in new clean energy production was over long ago, when Government and the private power sector blew their wager on run-of-river technology. A failure from all influences on this particularly ill-suited initiative for BC has been offset only by stunning successes in the wind power industry. It defies all logic that BC Hydro should not be able to take full advantage of this already established massive new resource and optimize natural operational synergies with other partners in the Northwest Power pool.

The only things standing between efficient management of BC’s GHG emissions, affordable electricity, and a highly profitable public utility are the Clean Energy Act and the boneheads behind it.

Lessons learned

A fitting conclusion is provided by David Freeman, appointed chair of The California Power Authority during the California Electricity Crisis. This submission was made to the Senate Subcommittee on Consumer Affairs, Foreign Commerce and Tourism, on May 15, 2002:

There is one fundamental lesson we must learn from this experience: electricity is really different from everything else. It cannot be stored, it cannot be seen, and we cannot do without it, which makes opportunities to take advantage of a deregulated market endless. It is a public good that must be protected from private abuse. If Murphy’s Law were written for a market approach to electricity, then the law would state ‘any system that can be gamed, will be gamed, and at the worst possible time.’ And a market approach for electricity is inherently gameable. Never again can we allow private interests to create artificial or even real shortages and to be in control.

George Gibson is a retired geologist from Courtenay, BC , who applies his passion for science and the environment to wilderness preservation, and the promotion of environmental stewardship through ecotourism.

The following is the first in a two-part series by geologist and concerned British Columbian George Gibson examining the failed private power model in BC.

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Dedicated to my 4 year old daughter who asked, “Dad, can BC Hydro make electricity from ice?”

We were on a family walk along one of our favorite rivers. She had just heard her parents lamenting that this river was one of many in the area slated for private power development. It was a crisp January day and her parents had failed to notice that there was only a trickle of water in the main channel.

The recently awarded Environmental Assessment Certificate for the Kokish River hydroelectric project provides a fitting backdrop for a review of disastrous and increasingly relevant flaws in BC’s Clean Energy Act. Premier Christy Clark’s complacency and Energy Minister Rich Coleman’s failure to address glaring new realities has resulted in increasingly desperate collusion by government and corporate influences to justify obsolete policy. The ongoing explosive growth of wind power capacity in the Pacific Northwest Power Pool, the collapse of natural gas prices, and a timely reminder of infrastructure vulnerabilities from the earthquake in Japan are all examples of evolving conditions where adaptability is key to survival.

Inherent flaws in BC’s Clean Energy Act are an inevitable consequence of a policy committed to the paradoxical agendas of economic growth and reducing GHG emissions. The invariable result of this combination is that neither will be done well. Furthermore, many of the specific directives of the Clean Energy Act reflect private sector influences that are both self-serving and profit driven. This private sector influence is therefore in a direct conflict of interest with value-based solutions that honour the best interests of the public.

Clean Energy BC (formerly the Independent Power Producers Association of  British Columbia) and the Green Energy Advisory Task Force are prominent influences on policy. Both groups are dominated by expertise in business and corporate finance. Perhaps the most troubling attribute of these advisory groups is the near absence of engineers, scientists (including ecosystems and fisheries biologists), and environmental researchers. Those most qualified to build an effective policy and assess the legitimacy of “green” qualifications have been largely bypassed.

Government policy embracing a profit-based, finance-driven corporate agenda for the clean energy sector has had the unfortunate side-effect of introducing deceptive and questionable marketing and promotion practices to a generally wholesome industry. Sadly, these promotion strategies are driving development in projects tailored to maximizing profits rather than effectiveness in reducing GHG emissions. Adding insult to injury, The Clean Energy Act burdens BC Hydro with outrageous and conflicting expectations to both facilitate IPP development and maintain obligations to ratepayers. The following analysis will detail how inherent defects in this legislation will result in little meaningful reduction in GHG emissions while transferring senseless risk and expense to the ratepayer.

The Clean Energy Act: A suicide mandate for BC Hydro

“The Clean Energy Act sets the foundations for areas of priority”, as per the Ministry of Energy Shareholder’s Letter of Expectations presenting government mandated directives to BC Hydro. These directives must then become the basis for BC Hydro’s Service Plan. The Letter of Expectations for BC Hydro’s 2011/12 Service plan includes the following areas of priority:

• Ensuring electricity self-sufficiency at low rates
• Supporting the development of clean private power projects to enable economic growth and create jobs in every region
• Securing long-term export power sales by partnering with private power producers without risk or cost to BC ratepayers

Furthermore, this Letter of Expectations contains an explicit directive from government for BC Hydro to “explore and identify opportunities to facilitate access for independent power producers to sell clean, renewable electricity in western North American markets”. ( That’s right…the same government that accused BC Hydro of being over-staffed is now expecting their marketers to do legwork on behalf of private power producers!)

The mandates referenced above are absurdly inconsistent with the realities of the challenges facing BC Hydro. BC Hydro’s obligations to ratepayers are to provide  reliable, secure and sufficient supplies of electricity safely and cost-effectively. The most significant challenges to these obligations are to provide reliable service under conditions of maximum demand and stress on the system.

The conditions for peak electricity demand and largest risk to the system are explicitly identified by both BC Hydro and the Northwest Power Pool as “cold weather” or “significant weather events” where temperatures drop more than 10°C below normal. This is for the simple reason that in BC, space heating requirements are responsible for about 57% of total household energy use. A legacy of the era of cheap hydro power is that between 200,000 and 500,000 of BC’s 1.8 million households use electricity as either a primary or complementary source for space heating. This calls for a staggering amount of capacity: approximately 2000 MW over and above typical usage patterns.

This causes unique problems for jurisdictions where electricity is generated primarily from hydro power facilities. Freezing temperatures stall the process of precipitation runoff, and within a matter of hours, river and stream flows are reduced to minimum levels. Hydro reservoirs are taxed by maximum withdrawals and minimal refilling. Capacity support from run-of-river facilities during these conditions is not effective. Furthermore, capacity support from wind generation may or may not be available depending on the location of those facilities and whether or not temperatures at those sites drop below standard operating limits (typically -10° C). Cold weather limitations on electricity supply from hydro power sources, including run-of-river, have been a major contributor to historical requirements for BC Hydro to offset short term energy supply shortfalls with market imports. It is therefore unrealistic to expect clean energy electricity suppliers to meet demand driven by cold temperatures.

The conditions for greatest stress with maximum potential for service interruption are caused by winter storms. BC Hydro explicitly identifies the single greatest cause of power interruption as damage caused by trees and branches falling on power lines. In the wake of major service disruptions caused by this type of damage, BC Hydro has managed to reduce these occurrences on a measly annual vegetation management budget of approximately $20 million. The proliferation of private power facilities will require significant expansion of transmission infrastructure and only serve to exacerbate this issue.

Added to the challenge of hardening a system against winter storms, is the requirement to harden against seismic risk. BC Hydro bears the responsibility of managing complex and capital intensive requirements for operating a power supply and distribution network of critical infrastructure in an area threatened with the inevitable occurrence of a major earthquake. In fact, much of the $6 billion worth of capital that BC Hydro has committed to spending on renewing or replacing aging infrastructure is related to seismic upgrades. This stems from the fact that at the time these facilities were built, our knowledge of seismic hazards and vulnerabilities of critical infrastructure was limited to only a handful of documented events. In light of the numerous devastating earthquakes that have occurred since then, and the vast amount of data available for identification of earthquake hazards and infrastructure vulnerabilities, it is completely unreasonable to criticize the economic efficiencies of these expenditures.

The challenges mentioned above are largely reflected in a summary of significant costs for BC Hydro in supplying domestic needs, as stated in the BC Hydro Service Plan 2010/11 – 2012/13:

• The cost of buying energy accounts for between 35% and 40% of BC Hydro’s overall domestic costs. This includes the cost of net market electricity purchases, IPP purchases, and natural gas costs for thermal generation facilities.
• Capital investment costs account for approximately 33% of overall domestic costs. This includes system upgrades for reliability as well as capacity additions.

The Clean Energy Act has alarming implications for the future escalation of these costs.

The act mandates BC Hydro will loose the flexibility to augment supply with net market imports beyond 2016. This will restrict access to approximately 13,000 MW of wind power capacity in the Northwest Power Pool. The Northwest Power Pool Assessment of Reliability and Adequacy 2011-2012 Winter Operating Conditions reports on a situation that has been completely ignored by the BC Government: There is already a problem with surplus clean energy capacity in the spring and fall when wind and hydro generation may exceed load plus the capacity to export. This supply surplus has resulted in downward pressure on Pacific Northwest wholesale electricity markets, creating bargain prices during the freshet and periods of mild wet weather. February 2012 wholesale prices are trading around $24/MWh for firm, on-peak delivery. Despite this fact, BC’s Government and the IPP sector justify The Clean Energy Act mandate for electricity self-sufficiency with repeated reference to wild price volatility and potentially exorbitant costs of importing electricity from external markets.

In a perverse display of deception, both parties make specific example of the California Energy Crisis as the calamitous consequences of any dependency on external supply. Any degree of familiarity with this event reveals that this example had very little to do with real supply shortages and everything to do with market manipulation by fraudulent private sector participants such as Enron. Any contribution to real supply constraints was caused by the combination of cold weather and drought conditions which critically reduced hydro power capacity in the Pacific Northwest.

These inherent limitations, and in particular cold weather limitations on hydro power generation, pose a conundrum for BC Hydro. An increased dependency on hydro power in a hydro power dominated market only serves to exacerbate supply gaps during times of peak demand. Nevertheless, the IPP sector and the BC Government continue to press the urgency to build more run-of-river facilities in order to fulfill increasingly speculative and illusory future supply gaps. BC Hydro is left to deal with the paradoxical realities.

BC Hydro will lose even more operational flexibility and incur additional affordability challenges as the option to offset peak system loads by purchasing cheap natural gas for thermal generators will be restricted by limitations on GHG emissions.

Future capital investment will be committed to transmission infrastructure expansion to facilitate IPP development and the highly controversial Site C project. The end result is that BC Hydro’s single greatest cost, buying energy, will be almost entirely dedicated to an exclusive group of private power producers. Furthermore, a significant portion of capital costs will go toward facilitating this. To date, over 70% of BC Hydro’s contracted electricity purchases for clean energy have been awarded to private run-of-river and limited storage hydro power projects. BC Hydro’s yearly cost for run-of-river power alone, currently stands at $340 million (assuming 3,400 Contracted GWh/year at a weighted average of $100/MWh). This contribution amounts to about 6% of total annual electricity demand. However, as previously explained, cold weather limitations shift the timing of this supply to periods of low demand. The value of electricity supplied to BC Hydro is indexed to market pricing only when timing of delivery corresponds directly to periods of daily peak demand.

The wisdom of these directives, including expectations for new clean energy to supply economic expansion, and the implications for BC ratepayers will be considered in the context of the Kokish run-of-river private power project, which we’ll examine in detail in part 2 of this series. This project provides an excellent opportunity to assess glaring deficiencies, blatant collusion, and unacceptable costs for both ratepayers and the general public.

George Gibson is a retired geologist from Courtenay, BC , who applies his passion for science and the environment to wilderness preservation, and the promotion of environmental stewardship through ecotourism.