UBC Student Simulation: How should the Forecasted Electricity Supply Gap in British Columbia be Filled?

George Hoberg

As part of a course on Sustainable Energy Policy and Governance, students participate in a simulated multistakeholder consultation about topical policy issues. Half of this year’s students simulated a debate about how to fill the forecasted electricity supply gap in British Columbia.

The scenario was presented as follows. The BC government forecasts a substantial future shortfall in electricity supply. After a series of site-by-site conflicts, Premier Campbell announced a new multistakeholder planning process to establish a province-wide strategy for developing new sources of electricity.

The learning objectives of this exercise are to develop practical skills — teamwork, research, and communication — necessary for constructive participation in policy development, while simultaneously developing a deep understanding of one crucial component of energy policy. While I feel confident that these simulations perform this educational purpose, I often wonder whether they might provide insights into real-world policy dynamics.  I’m reporting on the process and results here in the event that others inside or outside the ivory tower might benefit from our experience. In this case, it felt a bit like we are acting like a focus group for the province.

NOTE:  None of the statements in this blog refer to any actual positions or statements of real people or real groups, unless explicitly referenced. The views below are only those of UBC students pretending to be actors in the BC electricity supply controversy.

Participating students were randomly divided into nine groups reflecting different stakeholders involved in the process: BC Ministry of Energy, Mines, and Petroleum Resources; BC Ministry of Environment; Department of Fisheries and Oceans; BC Hydro; Independent Power Producers Associations; Joint Industry Electricity Steering Committee; BC Sustainable Energy Association; Save our Rivers Society; and the First Nations Summit. The groups submit 2000 word briefs designed to articulate the position of the group. We then meet for a 4 hour session to try to develop a consensus. I act as facilitator of the process.

The session began with each group giving a 5 minute presentation outlining their initial position. The student groups very accurately reflected the positions of their real-world counterparts. The IPPBC spoke about the merits of green energy and the benefits of having the private sector take the lead in proposing, building, and operating new sources of electricity generation. Representing large industrial consumers, the Joint Industry Electricity Steering Committee (JIESC) focused on the financial risks of building new sources of power, the relative merits of demand-side management, and the critical need to maintain low electricity prices. The First Nations Summit spoke to the importance of having any new facilities respect the emerging New Relationship between the Crown and First Nations. The BC Ministry of Energy, Mines and Petroleum resources lauded the merits of the government Energy Plan. BC Hydro outlined its plans as articulated in the 2008 Long Term Acquisition Plan currently under review at the BC Utilities Commission. The BC Ministry of Environment expressed some concerns about strengthening the environmental assessment process being applied to independent power projects. The federal Department of Fisheries and Oceans expressed its concerns about protecting fish habitat and stressed the need to strengthen the environmental assessment process. The BC Sustainable Energy Association delegate (arriving late due to a cycling incident) emphasized the importance of conservation first, and the desirability of pricing reform to promote conservation. The representative from Save of Rivers Society made an impassioned plea to cancel the BC Energy Plan and its privatization of new sources of generation, to avoid the need for new dams by taking advantage of existing sources of electricity, and restore a strong community voice.

After the initial presentations, a heated debate erupted between representatives of the IPPBC and Save our Rivers Society, and the facilitator had a difficult time steering discussion in a productive manner towards the issue at hand and creating the space for other delegates to make their case. Eventually, the group was able to agree on a list of eleven issues at dispute.

·         Should new sources be public or private?

·         Should the price of electricity be increased to encourage conservation and renewable?

·         Should IPPs under 50 MW be exempted from BC Environmental Assessment processs?

·         Should the Canadian Entitlement to downstream benefits of the Columbia River Treaty be taken as electricity rather than revenue?

·         Should the assessment of cumulative effects of projects be increased?

·         What types of new sources of electrical power should be built?

·         What role should First Nations play?

·         What role should communities play?

·         Should self sufficiency on an annual basis be the provincial objective?

·         What is the actual size of the BC electricity supply gap?

·         Should the province continue to rely on the gas-fired Burrard Thermal plant?

With such a daunting list, the facilitator sought to identify an area of potential commonality first. We began to debate issues around the environmental assessment process. Environmental groups, DFO, and the BC Ministry of Environment were all strongly committed to eliminating the 50 MW threshold for reviewingprojects in Section 10 of the Reviewable Projects Regulation. The representative of the IPPBC was strongly opposed to the proposed change, claiming that IPP projects already had to get 50 permits, licenses, approvals and reviews from over a dozen provincial and federal agencies. A compromise was struck on this issue that received unanimous approval: 

The <50 MW exemption was eliminated, and replaced by a screening process like that existing under the Canadian Environmental Assessment Act that provided for a preliminary review of all projects, and allowed those with no significant environmental impact to be exempted from further assessment. In exchange for agreeing to this change, government officials committed to streamlining the overall approval to reduce its complexity.

Concerned about losing focus on the question of the day, the facilitator (assisted by TA Tom Berkhout) attempted to directly tackle filling in the forecasted supply gap. We put a simple excel spreadsheet up on the screen, using figures from the mammoth table on p. 6-54 of the most recent BC Hydro LTAP. We agreed to use 2026 as the end date. Existing and committed supply for 2026 is projected to be 56,000 GWh/year. Depending on whether you use the mid or high-range demand forecast, the forecasted supply gap is between 21,700 and 27,700 GWh/yr.

The group then went to work nominating candidates to fill the gap. BC Hydro suggested a demand-side management figure of 13,800 GWh/yr, a somewhat conservative figure given the utility’s current thinking, but the figure was not challenged by the other groups. Once DSM is included, the projected gap was reduced to between 6,300 and 12,300 GWh/yr.

Everyone was in favour of BC Hydro’s Resource Smart upgrades to existing Revelstoke and Mica dams, yielding a modest 210 GWh/yr. The Save our Rivers Society urged the inclusion of existing large sources of electrical power in the province or to which the province has access:  Rio Tinto Alcan’s surplus power from its Kitimat operation that is sold to BC Hydro, the power exported by the Teck Cominco smelter operation in Trail, and the Canadian Entitlement to the downstream benefits of the Columbia River Treaty. Neither Alcan nor Teck Cominco were represented by groups in the room, and no one objected to including them in the proposal. However, the Ministry of Energy, Mines, and Petroleum Resources objected to including the Canadian Entitlement, noting that the provincial budget was reliant on those revenues. After discussion, the Ministry softened its position and allowed the CE to be included. Plugging these numbers (7110 GWh/hr) into the spreadsheet, the group was elated to see that we had already closed the gap for the mid-range demand forecast, and were within 5200 GWh/hr for the high demand forecast.

But things got more heated again when we began to discuss next steps. BC Hydro made an eloquent plea for the Site C dam on the Peace River, which would add an additional 4600 GWh/yr. The delegate from the First Nations Summit raised concerns about Site C in light of BC Hydro’s history with First Nations, and the representatives from the BC government worked hard to convince the First Nations group that the project would be pursued in the spirit of the province’s New Relationship through some form of shared management. The representative from IPPBC was strongly opposed, arguing that the project was uneconomical compared to independent power projects. IPPBC put forward a proposal to include 3000 GWh/yr of IPP power, as in BC Hydro’s Clean Power Call. Before other delegates even got a chance to consider the proposal, the representative from Save our Rivers Society jumped in to oppose IPPBC’s proposal, arguing that it was wrong to be damming BC’s rivers for private profit. We got stuck in finding the next increment, with IPPBC strongly opposing Site C unless the Clean Power Call was included as well, and Save our Rivers Society strongly opposing the 3000 GWh/yr call for private power.

With time running out, however, the Save our Rivers Society offered a concession. Stressing the need to keep as much of BC’s electricity supply in public hands as possible, he expressed a willingness to allow the IPPBC proposal to go forward as long as Site C was also built by BC Hydro. Everyone agreed. The gap was closed, with virtually enough to spare to phase out the natural gas fired Burrard Thermal unit (3200 GWh/yr), and make BC’s electricity production virtually carbon-free. The final numbers are represented in the table below.

After the formal meeting adjourned, there was a lot of discussion about whether the concession by Save our Rivers Society could happen in real life, or whether it was just an effort by a thirsty student to allow the group to come to an agreement. Most felt it was unrealistic; that there was little evidence of willingness to compromise in the group’s current positions and rhetoric. A minority felt it was not necessarily unrealistic. While more rivers would be put at risk, the solution of repatriating the Canadian Entitlement and pursuing a new government project at Site C allowed the group’s interests in maximizing public control over electrical power to be satisfied in part.

While this class exercise is obviously a terribly simplified version of reality, it did leave me somewhat more optimistic about the province’s ability to address the looming electricity supply gap. It also strengthened my view that BC Hydro and the BC government should find better ways to involve stakeholders and the public in a deliberative process on solutions to addressing BC’s electricity needs. While some of these questions are addressed in BC Utility Commission proceedings, the overly formal, quasi-judicial nature of those proceedings is not conducive to building public understanding and legitimacy about electricity supply choices and consequences.

This exercise, and the one earlier this week on oil sands, also greatly strengthened my impression of the creativity of university students and the value of these sorts of simulations in teaching public policy.