...Why Does The IPP Industry Still Need 'Security'?
The NDP government of British Columbia appears to be taking tentative steps to dismantle GordCo, Inc's IPP protection racket.
Doug Penner of the Vancouver Sun has the story. Here is his lede:
The NDP government is moving to scrap the province’s legislated requirement that B.C. remain self-sufficient in electricity supply, a centrepiece of the previous government’s green-energy policy.
Government, in its legislative agenda for this session, tabled amendments to the Clean Energy Act, which include stripping out the legislation’s definition of energy self-sufficiency.
Energy and Mines Minister Bruce Ralston characterized it as a public-policy shift away from a measure that the NDP disagreed with when put in place in 2010, which simply gives B.C. Hydro some leeway in preparing its next major demand estimate.
“Eliminating it will enable Hydro, give it a bit more flexibility to purchase clean energy at the most affordable prices from within and without the province,” Ralston said...
As you might imagine the fine folks behind years and years and years (and future mandated/contracted years and years and years) of inflated fixed prices are not happy with this because of 'good faith', 'rules' and 'security' and all that:
...“It just doesn’t make sense to us to take this action now,” said Laureen Whyte, executive director of Clean Energy B.C., the industry group that represents independent power producers. “Essentially, what (the province) is doing is looking to import electricity instead of creating it here, along with the jobs and economic development and taxes that go with that.”
Independent power producers (IPPs) now supply B.C. Hydro with about a quarter of all its electricity under more than 120 long-term contracts with the utility after a decade-and-a-half of growth under the previous government.
“What this means for investors is that they have invested in this jurisdiction, in good faith, by the rules, understanding that there is a future for IPP technology,” Whyte said. “(The amendment has) kind of sent a message back to the investment community that, you know, maybe it’s not a secure place to be investing in as they thought.”...
So.
How much has all that fixed price 'security' for investors from the time of GordCo Inc. cost us (i.e. British Columbians who actually do the paying)?
Well, back in 2010 it was 'only' a couple of hundred million dollars:
...In fiscal 2010, B.C. Hydro spent $568 million to buy 8.9 million gigawatt hours worth of electricity from independent producers at an average price of $63.85 per megawatt hour, according to its annual report. In the same year, the utility spent $311 million to generate some 42.1 million gigawatt hours from its own power dams at an average price of $7.19 per megawatt hour...
But last year, 2019, it had ballooned to almost a billion with a 'B':
...The amount of private power B.C. Hydro buys, by fiscal 2019, ballooned to $1.2 billion for 14.2 million gigawatt hours at an average price of $87.52 per megawatt hour, according to last year’s annual report. In the same year, it spent $332 million to generate 42.2 million gigawatt hours from its own facilities at an average price of $7.87 per megawatt hour...
And, as Norm Farrell has pointed out many, many times, the fix is in for tens of billions down the road:
...Since (Gordon) Campbell’s friend Larry Bell promised to assist private producers, BC Hydro has purchased almost $14 billion in power from IPPs—most at 2x to 4x market price—and is contracted to buy more than $40 billion worth of additional electricity....
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But, returning to that solid story from the VSun's Mr. Penner, according to the IPP flackhackery we should all stop worrying about all that securitized price gouging in perpetuity because...
Prices are coming down!
...Costs for all renewable power producers have come down considerably since, Laureen Whyte (of Clean Energy BC) said, so new B.C.-based IPP developments would be equally competitive.
Whyte said the industry has seen new wind-farm developments capable of delivering electricity at $28 per megawatt hour, versus an average cost of $101 per megawatt hour in 2009. She is familiar with solar-power developments with electricity as cheap as $32, versus $323 per megawatt hour a decade ago.
Whyte said her group believes “a lot more work should be done collaboratively” between B.C. Hydro and independent producers as the utility works on its next integrated resource plan.
“We see independent power production as complementary to the energy that B.C. Hydro provides,” she said...
The pretzel logic, above, is truly breathtaking.
Sheesh.
.
