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Calculating the cost of new power generation in B.C.

Public policy critic estimates cost of new wind power at $5B
meikle-wind-farm-credit-pattern-development
The Meikle wind farm in northeastern B.C. — one of the largest wind farms in B.C.

While it is generally accepted that wind power would be the cheapest way to increase B.C.’s clean electricity supply, it may not be as cheap as some think, owing to the fact that it needs to be overbuilt to make up for its intermittency, according to public policy critic Richard McCandless.

McCandless is a former B.C. senior bureaucrat who now writes about public policy in B.C. He recently calculated the cost of acquiring new wind power in B.C.

“The whole point of this paper is that the advocates for net zero and carbon neutrality tend to gloss over the cost,” McCandless told BIV news. “It’s a huge cost to get there.”

When Site C dam was approved, predictions were that it would produce a surplus of electricity, and that it was therefore a waste of public dollars.

But the hydro-electric dam – the budget of which has ballooned to $16 billion – isn’t even completed yet, and BC Hydro is already planning to issue a new power call in early 2024.

The B.C. government’s climate change policies include a heavy focus on electrifying everything from cars to LNG plants, which will require more clean power.

BC Hydro plans to issue a new power call in early 2024, with the goal of obtaining 3,000 gigawatt hours (GW/h) of new clean electricity annually.

It’s expected most of the successful bids to build new power generation in B.C. will come from wind power developers, owing to wind’s lower cost, although there are also some utility scale solar projects being pitched in B.C.

Currently, wind power generates just 2.5 per cent of B.C.’s electricity. To get 3,000 GW/h of new electricity from wind, developers would need to actually build twice that amount in terms of capacity, McCandless says.

“Given the intermittent supply inherent with wind resources, the rated (nameplate) capacity of the turbine is usually discounted by 50 per cent to 60 per cent,” he writes. “BC Hydro is assuming a 50 per cent discount factor if the power is generated in the northeast, which is the most efficient wind region of the province.”

One problem wind developers could face is that, while the Peace River region of northeastern B.C. has some of the best onshore wind assets in B.C., that region may now be encumbered by new restrictions on land use, as a result of the Blueberry River First Nation Supreme Court case and subsequent Blueberry River Implementation Agreement.

Two Treaty 8 First Nations – Doig River and Halfway River – are now challenging the agreement in court.

“Such disputes among the various First Nations increase uncertainty for oil and gas developers, as well as for potential wind farm investors,” McCandless writes. “These disputes between Indigenous governments may delay the roll-out of the anticipated wind farms.”

Assuming that wind turbines are generating at full capacity only half the time (i.e. 50 per cent), to secure 3,000 GW/h of wind power annually, developers would need to actually build 6,000 GW/h of capacity, McCandless writes.

He estimates the cost of land-based wind turbines at $2.5 million per megawatt (MW). Assuming 3-MW wind turbines operating at 50 per cent, building 6,000 GW/h of capacity would require 666 3-MW wind turbines, McCandless writes, at a cost of $5 billion. That’s just for the wind turbines.

“This does not include the cost of hundreds of acres of land,” McCandless adds.

It also doesn’t include benefits agreements with First Nations and local governments or transmission costs.

While $5 billion for 6,000 GW/h of generating capacity from wind is still cheaper than Site C dam -- $16 billion for 5,100 GW/h – McCandless notes that there is more value to firm hydro power, and that their turbines last longer than wind turbines.

“The thing about wind, all of them say it’s good for 20 to 25 years, then it’s got to be replaced,” McCandless said. “Whereas Site C, theoretically, the turbines are good for 70 or so years – that’s what they’re depreciating them at – and the dam itself is 100 years. In that sense, wind is almost as expensive, if not more expensive, than Site C, if you consider you’ve got to replace it three times to Site C’s once.”

As for utility solar projects, Recurrent Energy, a subsidiary of Canadian Solar, has submitted project descriptions to the BC Environmental Assessment Office for three solar projects totalling 350 MW of power:

·        Aspen Solar, a 100 MW project with 400 MW of storage on 335 hectares of land southeast of Merritt;

·        Highland Valley Solar, 150 MW with 600 MW of battery storage on 395 hectares of southeast of Ashcroft; and

·        Chasm Solar, 100 MW on 205 hectares of land north of Clinton.

The initial project descriptions do not include the projects’ capital costs. Generally, though, solar power in Canada is more expensive and has a lower generating capacity than wind power, due in part to the fact more northern latitudes of Canada gets less sunlight than more southern climes.

Natural Resources Canada estimates the capital cost of onshore wind power at $1,389 per kilowatt, with generating capacities of 30 to 45 per cent, compared to $1,516 per kilowatt for utility solar, with capacities of just 10 to 20 per cent.

NRCan defines capacity factors as “the actual energy produced by a generator divided by the maximum possible generation over a given period.”

So solar power is both more expensive and has lower generating capacities than wind power. It does have certain advantages, however, one being that it is at least more predictable than wind power (you can count on it generating at least some power everyday during the daytime), and tends to generate the most power in the summertime, when hot dry conditions may be reducing hydro power generating capacity.

Thermal power generated through a natural gas combined cycle plant can be cheaper than either wind or solar -- $1,300 to $1,800 per kilowatt -- and has a generating capacity of 70 per cent, according to NRCan.

Meeting B.C.’s additional power needs through natural gas is not an option, however, as B.C. policies require all new power acquisitions to be low or zero carbon emitting.

nbennett@biv.com

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