Power lines coming from the BC Hydro Skeena Substation in Terrace, B.C., in November.ETHAN CAIRNS/The Canadian Press
After the political fallout over the construction of the $16-billion Site C dam, the B.C. NDP government showed no appetite for ever building another hydropower megaproject.
Another big dam has always been possible, but for the past eight years, the NDP has looked in every other direction for new electricity sources. The clean and reliable hydroelectric power that British Columbia enjoys from its large dam system does not come without a cost to the environment, First Nations’ rights, and agriculture, and the NDP paid a heavy price for those downsides when it built Site C.
But the province’s Crown-owned electricity utility is facing an urgent demand for more clean energy. Adrian Dix, Minister of Energy and Climate Solutions, has asked BC Hydro to look at new sources of power with no ideas barred from discussion, including the possibility of reviving a 50-year-old plan for another major dam on the Peace River, marked on an aged map as Site E.
“That would cause a big ripple, when you mention Site E,” Mr. Dix said in an interview.
“The intention isn’t to cause a ripple. The intention is to look at everything that BC Hydro can do on the two rivers and everywhere else and that’s what we’re doing.” The two rivers are the Columbia and the Peace, and under provincial policy dating back six decades, they are destined to carry the brunt of the province’s hydroelectric schemes.
Minister of Energy and Climate Solutions Adrian Dix has asked BC Hydro to look at new sources of power.DARRYL DYCK/The Canadian Press
B.C. is rolling out the red carpet to attract new energy-intensive resource projects, and the result is that demand is now forecast to outstrip supply. A failure to deliver electricity as promised will be a blow to the economy that the province can ill-afford. The hunt for new power – backed by costly new distribution systems – is on.
In 2017, one of the first major challenges for the new NDP government was the decision to move forward with Site C, the most expensive public-infrastructure project in B.C.’s history.
“We do it with a heavy heart,” then-premier John Horgan said at the time. The NDP – including Mr. Horgan himself – opposed the project while in opposition, aligning with First Nations communities, Peace River ranchers and environmentalists. The decision to continue the project started by the previous Liberal government divided Mr. Horgan’s caucus and cabinet. It wasn’t a project that the NDP would have started, the premier said at the time, but his government was forced to finish it only because the Liberals had pushed it past the point of no return.
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Instead of more dams, BC Hydro under the NDP has dramatically increased its private power contracts, mostly for wind power.
Site C was completed at the right time, coming fully online last summer, when Canada’s appetite to fast-track new energy-intensive resource projects was growing. B.C. has used the tariff war with the United States to promote proposed new liquefied natural gas and critical minerals mines as nation-building projects, and its reliable supply of cheap electricity is a natural advantage.
When construction began, there were questions of whether Site C was necessary. Those are now moot. The question is now: How much more electricity supply does B.C. need?
BC Hydro had issued two major calls for new electricity production from private producers and had no shortage of proponents. Mr. Dix suggests another call is imminent.
When Mr. Dix was asked at a resource conference in September whether the province had built its last large dam, he replied “No.”
BC Hydro's Site C dam and hydroelectric generating station on the Peace River near Fort St. John.HO/The Canadian Press
In addition to BC Hydro’s dusty plans for Site E, Mr. Dix says he is interested in a major private-sector project that would rival Site C’s output, known as Bute Inlet. That project would string 17 run-of-river hydroelectric facilities across a remote section of B.C.’s mid-coast, and environmentalists expressed alarm about the potential damage to sensitive ecosystems when it was proposed more than a decade ago. An environmental assessment was mothballed in 2016 because BC Hydro wasn’t interested in buying the power at the time.
The sense of urgency is explained in documents that were buried in a compliance letter filed March 2 by BC Hydro to the B.C. Utilities Commission.
In it, the Crown corporation disclosed that its forecasts for electricity demand have changed, increasing the near-term need for new energy and capacity resources. Four years from now, electricity demand is expected to be 2,700 gigawatt‑hours higher than their mid-range plan anticipated – roughly half the annual output of the Site C dam.
The higher load growth, due to the advancement of several natural gas and LNG terminal projects as well as new data centre and AI-related load, means that B.C. faces an undersupply challenge.
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“This is great news for B.C.,” Mr. Dix said this week in an interview. “This is B.C. growing in a way that has not happened in recent times.” But the good news of economic development means that the Crown corporation has to race to provide more supply.
BC Hydro acknowledges in its latest Integrated Resource Plan “that the risk of an undersupply of power in the province is a greater threat than the risk of an oversupply, as an undersupply could undermine economic growth,” notes a report from the National Energy Group at McCarthy Tétrault LLP.
Sven Milelli, a partner in the law firm who specializes in energy mergers and acquisitions, isn’t surprised that BC Hydro’s leaders are more open to new – or old – ideas.
“I think they’re really, as an organization, struggling to meet the moment,” he said in an interview. “They were originally forecasting that they’d be in an energy deficit as early as 2029 in the high growth scenario. If they’re saying now that they are on the higher end, that means that they’re going to be in a pinch at the end of this decade.”
Professor Werner Antweiler, an environmental economics expert at the University of British Columbia’s Sauder School of Business, predicts that BC Hydro will be able to scale up as needed through additional private power contracts. “There’s going to be enough capacity to see us through even a high-growth scenario,” he said.
If large new projects such as LNG Canada Phase 2 move forward, BC Hydro can issue calls for more power. Wind power is cheap and relatively quick to build out, he noted, compared with costly new dams.
“It all comes down to what can be done in a cost effective manner.”
The bottleneck, he said, is getting electricity delivered to where it is needed. The government has committed to building the North Coast Transmission Line (NCTL), with construction starting this summer, to encourage the development of new mines and liquefied natural gas plants in the northwest corner of the province.
Even though there is strong political support for the project, the details are still far from clear.
The NDP government passed the Energy Statutes Amendment Act last fall to exempt the NCTL from a regulatory review process, signalling its desire to fast-track construction. And the project is deemed by the federal government to be of national importance and has been referred to the Major Projects Office to help speed it along.
BC Hydro has started site preparation for camp areas along the transmission line route, which includes relocating the worker accommodations no longer needed at Site C, but it is still negotiating with First Nations along the route, and despite all the political backing, it doesn’t have a formal budget.
Based on early estimates, phases 1 and 2 of the project are anticipated to cost $6-billion. An updated budget, based on detailed planning and design, is expected when the BC Hydro board of directors makes a final investment decision later this year.
Editor’s note: A previous version of this article incorrectly stated that construction of Site C dam cost $12-billion. That figure has risen to $16-billion.