Review of the 2013 plan

In our 2013 Integrated Resource Plan, as part of the Clean Energy Strategy, we committed to reviewing the plan to determine if we need to purchase additional energy resources – over and above what was approved in 2013 – in advance of the next Integrated Resource Plan.

In 2016, we updated our long-term demand forecast and demand supply outlook. This updated outlook shows that we have sufficient supply, with no need for a call for new energy in advance of the next Integrated Resource Plan. We also expect to have sufficient resources in place to support near-term actions outlined in the Climate Leadership Plan and we will address longer term needs in the next Integrated Resource Plan.

A summary of our review

As outlined in our fiscal 2017 to fiscal 2019 Revenue Requirements Application, our current demand forecast continues to predict long-term demand growth across our three customer sectors – residential, commercial, and industrial. But the rate of growth has been slower than what we originally forecasted in our 2013 Integrated Resource Plan.

Electricity Demand Forecast graph

Both residential and commercial sectors are projected to continue to grow at a slow but steady rate. Residential growth is mainly driven by economic factors such as housing starts and a projected population increase of more than one million residents over the next 20 years. The commercial sector is largely driven by the gross domestic product (GDP).

The large industrial sector includes mining, forestry, and oil and gas facilities. The sector is expected to grow at a slower rate as it continues to experience the effects of a slowing world economy. As this sector is the most volatile, we closely monitor the sector's upturns and downturns in order to account for its impact on our forecast. We've also been closely watching B.C.'s new liquefied natural gas (LNG) industry for potential new loads coming from the sector.

Electricity Demand Forecast then and now

The primary reason for the change in our demand forecast since the 2013 plan is market changes in the large industrial sector. Driving that lower forecast are:

  • Delays of in-service dates for several mining, LNG, and oil and gas projects
  • Closure of the Howe Sound Thermo-Mechanical Pulp Facility
  • Reduced expectations for potential new loads until commodity prices recover.

Our demand supply outlook compares our long-term demand forecast with our existing and committed supply to determine when resources are needed, and how much is needed. This drives our need for resource acquisitions such as conservation initiatives, building new projects, or buying more from independent power producers (IPPs).

Our current demand supply outlook is outlined in our fiscal 2017 to fiscal 2019 Revenue Requirements Application. Since the 2013 Integrated Resource Plan, key changes include:

  • Our conservation rates brought in lower than expected savings, while codes and standards are expected to deliver more savings over the long-term.
  • More supply from IPPs as a higher number of IPP facilities have achieved commercial operation than expected.
  • We're no longer assuming that 400 MW of capacity supply will be required on the North Coast before the end of fiscal 2024.
  • Mica Units 1 to 4 maintenance will require taking one unit out of service at a time for 12 to 18 months each, i.e., about 400 MW of dependable capacity unavailable for up to six years (starting in fiscal 2025).

Similar to the 2013 Integrated Resource Plan, we're forecasting an earlier need for new capacity resources rather than energy resources. Capacity is our ability to meet peak demand in the system, such as on a cold winter night. Maintenance at Mica generating station could take up to six years to complete. To make up for this lost capacity, the sixth unit at Revelstoke Generating Station will be required as part of our base resource plan. Revelstoke Unit 6 can be built as early as fiscal 2022 if needed, and will add up to 500 MW of dependable capacity to our system.

Peak demand supply outlook

While we have more than enough energy in the near term, if we kept our system as is and didn’t build Site C – a third dam on the Peace River currently under construction – or pursue other actions such as conservation savings or IPP contract renewals, we'd have an energy deficit by fiscal 2022. Over 20 years, the resulting 23,000 GWh deficit would be equivalent to what it would take to power more than two million B.C. homes.

Electricity Demand Supply Outlook

Given our updated electricity needs and our demand supply outlook, the actions outlined in the 2013 Integrated Resource Plan are sufficient to meet our needs over the next decade. We continue to monitor market changes and load developments, and any additional required actions over and above what was approved in our 2013 plan will be addressed in our next Integrated Resource Plan.

We've grouped the 18 actions outlined in our 2013 Integrated Resource Plan into five categories. Take a look below at some of the highlights of our progress.

Category Highlights
Conserving first
  • We've undertaken a process to modernize our demand-side management strategy, which has reduced demand-side management expenditures to achieve cost savings, keep rates low and respond to customer and system needs.
  • We're piloting capacity conservation initiatives with our industrial, commercial, and residential customers.
  • We've developed long-term roadmaps with short-term actions to achieve near net zero buildings, home labeling and building benchmarking, and enhanced building code compliance.

    Read more about our demand-side management plan [PDF, 22.7 MB].
Managing resources
  • We've adjusted our portfolio of Independent Power Producer (IPP) resources by carrying out agreements with IPPs to defer or downsize projects, as well as terminating a number of Electricity Purchase Agreements where project development had stalled.
  • We're targeting the renewal of IPP contracts for those facilities that have the lowest cost, greatest certainty of continued operation, and best system support characteristics.
Powering tomorrow
  • Site C has been approved and construction is currently underway for an in service date of fiscal 2025.
  • We continue to implement the Clean Energy Strategy [PDF, 213 KB]. Highlights include:
    • Increasing the eligible project size for our Net Metering program to 100 kW.
    • Updating our Standing Offer Program to include an increased annual target of 150 GWh, introducing a new target management system, and removing existing generation from project eligibility to create more opportunities for new projects.
    • An optimization process to determine ways for the Standing Offer Program to better reflect technological advancements, changing system needs, and to find cost savings to keep rates low.
    • Launching our Micro-Standing Offer Program for First Nations and Communities.
    • Continuing to monitor electricity supply options, with our most recent update in 2015.
Supporting LNG
  • We've explored natural gas-fired generation options in the North Coast, and at this time we're no longer assuming that North Coast capacity additions will be required before the end of fiscal 2024 (compared to 400 MW estimated in the 2013 Integrated Resource Plan), and we continue to assess regional needs.
  • We are monitoring LNG developments closely, and we're prepared to serve new load as LNG customers request service.
Planning for the unexpected
  • The Revelstoke Unit 6 project is planned for an in-service date of fiscal 2027. In case it is needed earlier, the earliest in-service date of fiscal 2022 is being maintained. This will add up to 500 MW of peak capacity.

The Government of B.C. released the Climate Leadership Plan on August 19, 2016. We're working closely with government to determine how we can best support a number of the government initiatives and actions outlined in the plan, including:

  • Incentives for purchasing a clean energy vehicle
  • Supporting vehicle charging development for zero emission vehicles
  • 10-year plan to improve B.C.'s transportation network
  • Encouraging development of net zero buildings
  • Making B.C.'s electricity 100% renewable or clean
  • Using electricity to power natural gas production and processing
  • Efficient electrification
  • Reducing emissions and planning for adaptation in the public sector.

During our review of the 2013 Integrated Resource Plan, we took a look at potential demand implications from electrification [PDF, 1.3 MB] similar to those that may result from Climate Leadership Plan actions. Examples include an increase in electric vehicle use and/or electrification of the large industrial sector, which otherwise would generate their own power using natural gas turbines. We expect that demand would increase gradually to start, and given the current demand supply outlook and IRP actions, we have sufficient energy resources to support electrification prior to determining future actions in 2018 Integrated Resource Plan.

At the same time, our need for capacity resources may become greater as the demand supply outlook for capacity gets tighter. With the 100% clean policy for new resources, we will continue to explore clean capacity resources so that we're ready with cost-effective options when needed.

As we make our way through the Climate Leadership Plan and what it means for our business, we'll take actions where we can, and will also consider our longer term contributions as we develop our 2018 Integrated Resource Plan.