Fort Nelson Generating Station Upgrade

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A growing demand in Fort Nelson

Demand for electricity in the Fort Nelson area is growing. As a result of increased industrial activity and households switching to electric heat, electricity demand has increased by more than 50% in recent years. It is expected to increase by a further 50 to 200% by 2013 from anticipated growth in gas extraction and expansion of industry in the region.

The primary drivers for the project are BC Hydro Resource Smart savings due to an expected efficiency improvement, and the need to meet significant load growth in an electrically-isolated region.

About the generating station

The Fort Nelson Generating Station (FNG) is a natural-gas fired facility located 16 km south of the town of Fort Nelson. It is a simple cycle gas turbine plant with a peak output of 47 MW in winter and 40 MW in summer. Although located within BC Hydro's service area in northeast British Columbia, it is electrically integrated with Alberta's electricity system. Load in Fort Nelson is generally met from FNG which is also available to provide energy and area voltage support to Northwest Alberta. There is also a backup agreement with the Alberta Electric System Operator (AESO) to provide 35.5 MW of backup power.

The region is currently supply constrained with BC Hydro unable to serve any new industrial customers until a new supply becomes available. As the region's economy grows, BC Hydro is evaluating options for other secure sources of additional energy. Upgrade of the FNG provides the most cost-effective, near-term capacity addition.

Project options, technologies

BC Hydro developed two options during the Definition Phase for upgrading the generating capacity of FNG. Either option will convert the existing plant from a simple gas-fired generating facility into a combined cycle generating station (CCGT). Option 1 would increase output by 8.6 MW with upgrades to the existing gas turbine and once-through steam generator. Option 2 would increase facility generation output by 24.5 MW with the installation of a new steam turbine generator and an air cooled condenser. Neither option would increase the existing generating plant 'footprint'– the amount of land currently required at the plant site.

CCGT technology will have the following benefits:

• Waste water or effluent production can be reduced by 50 to 75%;
• Greenhouse Gas (GHG) per MW can be reduced by 15 to 20% per year;
• Raw water usage can potentially also be reduced by 60 to 80%.

In order for BC Hydro to proceed with the upgrade, the BCUC has to make a determination that the capital expenditures required to implement the Fort Nelson Resource Smart project are in the public interest. This determination is anticipated as early as June 2009. BC Hydro's preferred choice is to upgrade the facility by 24.5 MW as this option will meet the "Low Growth" scenario of peak demand. This option has been approved by the BC Hydro Board at its May 22 meeting releasing full funding for the Implementation phase subject to BCUC approval.

Community consultation

BC Hydro continues to consult with the Fort Nelson and area communities. This includes but is not limited to: First Nations representatives, town council, and other stakeholder groups with an interest and involvement in this project.

Environmental stewardship

BC Hydro completed an independent environmental assessment (EA) by AMEC Earth and Environmental. Affected parties were approached to provide input into the EA, including the study field work and a review of the draft EA report.

The study area included the existing facility site plus a 100-metre radius around it. The assessment studies have included looking at the possible impact on vegetation and wildlife, water resources, archaeological resources and waste into the air and water.

Carbon capture and sequestration

BC Hydro's preliminary investigation into the feasibility of Carbon Capture and Sequestration (CCS) for FNG indicates that there is no synergy with Spectra Energy's CCS project other than compression of CO2 gases from the FNG plant.

FNG will have to install its own equipment for separating combustion CO2 from the exhaust stream. To date, the technology to separate (capture) combustion CO2 from the FNG exhaust stream has not been proven on a commercially economic scale, and is not a viable project option.

Therefore, BC Hydro will not be pursuing carbon capture at FNG in the near future.

Regulatory approval

BC Hydro is regulated by the British Columbia Utilities Commission (BCUC) and must obtain the BCUC's approval for a project of this nature. BC Hydro is currently seeking authorization from BCUC to move forward with one of the two proposed upgrades (8.6 MW or 24.5 MW). BC Hydro anticipates a determination in June 2009.

Next steps

BC Hydro will start with the detailed engineering of the approved option.

• Environmental permits and approvals will be sought after the BCUC Determination is received
• Award major equipment contracts
• Site work is likely to start in April 2010; the project is expected to be in service by November 2011.

Long-term requirements

Growth in electricity demand in Fort Nelson is expected to continue to grow. Therefore, BC Hydro has also applied to the BCUC to approve completion of preliminary studies for the following:

• Investigating the possibility of connecting the community to the BC Hydro provincial transmission grid;
• Investigating expansion of the Fort Nelson plant to a total generating capacity of 110 MW. This would be known as the Fort Nelson Expansion Project.