The B.C. government’s pledge to fast-track a second transmission line to bring power to a string of new critical mineral mines could break a stalemate that has stymied investment for years, a move aimed at unlocking billions of dollars of investment and providing the world with precious resources, says a mining industry spokesman.
The announcement this week by Premier David Eby at a natural resources conference is a key part of a strategy to grow and diversify B.C.’s economy – a plan made more urgent in the face of threatened tariffs from its major trading partner, the United States.
Michael Goehring, president and chief executive of the Mining Association of BC, welcomed the province’s commitment.
“It’s an integral piece of electricity infrastructure,” he said in an interview.
British Columbia’s north generates most of the province’s hydroelectricity, and the lion’s share of it is sent south to support its densely populated regions. There is potential for massive new resource projects – mines and liquefied natural gas – that could help the province’s remote north coast grow. But those investments have been blocked by one major hurdle: The single transmission line running between Prince George and Terrace is at capacity, unable to provide the cheap, clean energy that potential new investors are demanding.
Two years ago, BC Hydro proposed to move forward with a new power line, but it first needed sufficient expressions of interest from industry that there would be demand for the service. BC Hydro doesn’t want to spend billions on new infrastructure without knowing the customers will be there. Investors don’t want to commit without assurances that the power will be there.
The Crown-owned utility said then the project could be in service by the fall of 2032. The project price tag was $3-billion.
The mining industry says there are 17 critical minerals mines on the books in B.C., representing potential capital investments of $36.5-billion, and many are in the northwest where new power lines are needed.
But a final investment decision on any project won’t go ahead until proponents know how much they would have to pay to get that service delivered, which nobody will know until well into the planning process.
Energy Minister Adrian Dix said he is ready for the province to make the first move: Build the line with confidence industrial investors will come.
Canada is seeking to join a global critical minerals revolution by developing mining for copper, nickel, lithium, graphite and cobalt needed for renewable energy projects and electric vehicles. B.C. has critical minerals but very little is currently produced.
The biggest opportunities for investment lie along that 450-kilometre corridor northwest of Prince George, where critical mineral development promises a chance to make B.C. a key supplier of something the world needs.
“It’s not the question of, ‘Will it be built’ or ‘Should it be built.’ It will be built, and we’ve got to get going,” Mr. Dix said in an interview. “We believe they’ll come. You can’t simply wait, or the timeframes don’t work.”
Mr. Eby told the conference on Tuesday his government will bring in legislation this spring to have an existing agency, the BC Energy Regulator, take over sole responsibility for transmission line projects.
The agency already provides regulatory oversight for B.C.’s oil, gas and other energy resources, and will now be tasked with wrangling permits for the planned transmission lines that are required under the Forest Act, the Heritage Conservation Act, the Land Act, the Wildlife Act and more.
Mr. Dix acknowledged there is much work to be done, and he declined to provide a cost or a timeline for the completion of the North Coast Transmission Line.
The B.C. Utilities Commission still has regulatory authority over BC Hydro and has yet to approve the line. First Nations along the proposed route are still being consulted. And equity stakes in the project are being negotiated. But Mr. Dix said he does not anticipate those factors will stall the project.
“Is there going to be demand? Yes, there is. Is it a challenge to build? Of course. It’s a big project, but we believe it’s a justified project. It is needed now; it will be needed in the future. So, it’s a high priority for us, and it’s a vision of Hydro playing a major role in building out the province.”
Mr. Goehring cautioned that industry is still going to need to know what they’ll be expected to pay to access power before they’ll put any money down.
“BC Hydro is not unlike every other utility in North America, they are conservative and cautious,” he said. “They don’t want to build costly new infrastructure unless they are assured of anchor tenants – they want to avoid stranded assets.”
Similarly, investors will be cautious about committing until there are more details. Each potential customer will have to bear a share of the cost of building up the new infrastructure, so the price tag matters.
“As BC Hydro moves to plan and develop the transmission line, they will determine the final estimated costs that this new line would impose on a project, and that cost is input into the final investment decision of the mine,” Mr. Goehring said.
By reducing the regulatory burden, Mr. Dix said he expects he can get the line in service years earlier than planned.
But his hesitation to provide firm details on timeline and budget is learned experience: BC Hydro posted huge cost overruns for the Northwest Transmission Line project, which was finished in 2014. The Interior to Lower Mainland Transmission Line, which came in to service the following year, not only went over budget but BC Hydro engaged in a bitter contract dispute after the contractor brought in faulty steel towers from India that twisted, bent and collapsed.
At that time, Mr. Dix was the energy critic on the opposition benches and he described the construction of the line to the Lower Mainland as “a disaster.”
Today, Mr. Dix is more confident that his project will be better managed. “It would be my hope and expectation that lessons from those projects have been learned.”