Non-integrated area community renewable energy projects
Since 2019, we've been working with communities in the non-integrated areas (NIAs) to support the development of renewable energy projects, which is central to reducing diesel use in remote communities. To support this effort, we’ve proposed an offer to purchase electricity from community projects.
Community electricity purchase agreements to reduce diesel use in remote areas
As of fall 2023, through the knowledge and experience gained from ongoing work with Indigenous developers, we’ve drafted an NIA community renewable energy offer (NIA CREO) to advance efforts to replace diesel using renewable energy sources.
The NIA CREO is a collaborative approach that supports successful project development with communities within a commercial framework – guided by clear pricing principles and contract terms. Under this offer, we intend to purchase electricity from selected projects through community electricity purchase agreements (CEPAs).
This initiative supports CleanBC’s target to reduce reliance on diesel generation by 80% by 2030, as well as a core goal in our five-year strategy. It’s an important part of our commitment to improve the accessibility of clean, reliable and affordable power to Indigenous Nations communities in remote areas of the province.
We’ll collaborate with NIA communities across B.C. to select, develop, design and connect projects that displace diesel generation in remote areas.
We’ll work with each community to support the development of your preferred project and ensure that its configuration meets reliability and safety standards. General project requirements:
- Must use a clean or renewable resource, as defined by the Clean Energy Act.
- Must be able to interconnect directly to the community microgrid.
- Must be appropriately sized to the community, which is determined by considering community energy planning and load forecasting.
The pricing approach depends on the resource type:
- Solar projects: The nominal price offered is $378 per megawatt-hour (MWh) as of 2024, escalated at 50% B.C.’s consumer price index (CPI).
- Other renewable projects: The price will be bilaterally negotiated using the same pricing principles.
This approach is designed to:
- Minimize project risks for proponents.
- Set a price that reflects the project risk level and maximizes the probability that the project remains financially feasible over the term of the agreement.
All community electricity purchase agreements executed under this offer will be filed for acceptance with the B.C. Utilities Commission pursuant to section 71 of the Utilities Commission Act.
Community developers are responsible for paying for interconnection study costs.
BC Hydro will, as determined on a case-by-case basis, pay for reasonable costs related to interconnections. The community developer will post security for such costs.
Security requirements will decrease by 20% on each of the first to fifth anniversaries of reaching commercial operation, after which no security will be required.
How to get involved
If your community would like to get involved, reach out to us. Early and ongoing collaboration with community and Indigenous developers will be key to getting projects up and running to reduce reliance on diesel generation.
Beginning in late 2023, we’ll share more information about this draft offer and engagement opportunities.
If you’d like to be notified about upcoming engagement activities such as information sessions, please email us.
If your community has been working with us on a project with its own community electricity purchase agreement, it will continue. We’re continuing to advance projects already in development through established technical working groups.
Review the topics below, and email us if you have any other questions about this offer.
The pricing balances our diesel reduction objectives, the need to make projects financially viable for communities, and consideration of the financial impact on BC Hydro ratepayers.
Compared to other resource options, solar projects offer technical simplicity, scalability and low sustaining costs. This makes their development and long-term operating cost estimates more predictable, and with lower cost variability across NIA communities compared to other resource options.
A fixed price offer has been set for solar projects because they have a well-understood, replicable technology with reasonably predictable costs.
Projects other than solar will be subject to open book price evaluation. A fixed price hasn’t been set because non-solar projects vary significantly in approaches and have a much wider range of expected costs, which means a standard pricing model won’t fit all project needs.
Occasionally in NIAs, we may need to curtail generation to balance the load and generation and ensure the grid is stable. To manage this issue, we expect that solar community electricity purchase agreements (CEPAs) will be designed to pay for “available” energy based on the project’s size, outage management, weather conditions, and other key factors rather than actual energy deliveries.
Where curtailment is expected, we’ll pay for electricity that could have been delivered to prior to such curtailments. Structuring the CEPAs to reflect this ensures a consistent and predictable revenue for the project that’s driven by the project’s operations rather than our system operations.