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.
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.
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.
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.
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.
|Planning for the unexpected||
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.