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NatGas to Provide Growth for BC Hydro, Report Says

British Columbia (BC) natural gas supplies in both proposed export terminals and burgeoning shale plays hold out the potential for substantial power demand growth over the next 20 years, according to a draft 2012 integrated resource plan (IRP) by BC Hydro. Along with mining, natural gas carries the potential for "very substantial demand growth," the BC provincial utility officials said.

With special attention given to the proposals for liquefied natural gas (LNG) export projects (see Daily GPI, April 23), the draft IRP expects power demand throughout the western-most Canadian province to grow from 56,838 GWh this year to 89,590 GWh annually in 2032, assuming two LNG export terminals slated for Kitimat are built.

Essentially, BC Hydro's plan is preparing for LNG export growth in the northwest portion of the province; major shale gas field development in the northeast; and the mining sector expansion in other areas. These sources of potentially huge added power demand could create a "gap" between available generation capacity and peak demand at some point over the next 20 years, and the IRP attempts to address how to fill that gap.

The potential cause gets considerable attention in the BC Hydro draft document, noting that the provincial utility is developing contingency plans in case demand grows faster than currently forecast. "BC Hydro is paying particular attention to major developments in the north where there is potential for even greater load growth from the development of the large industrial sector [gas and mining]," the report said.

In addition to at least two LNG export terminals being included in the BC Hydro base forecast, the report noted that there are a number of additional LNG and mining projects that could come to fruition.

"If a third LNG facility is approved and requests electrical service, BC Hydro would need to acquire significant additional energy and provide additional peak capacity to serve the additional load," the IRP said. As a result, the utility intends to work closely with prospective LNG project sponsors and to push for an "earliest-in-service" date for a new 500 kV transmission from Prince George to Terrace and Kitimat from the Peace River region.

Similarly, the BC Hydro IRP flags the possibility of a Horn River Basin natural gas extraction boom causing operators to request increased electricity service in the gas field, and the plan notes that the basin encompasses a large geographical area northeast of Fort Nelson that is not connected to the utility's integrated transmission system.

"Traditionally, the natural gas industry has met its own energy requirements via burning natural gas or diesel," the IRP said. "However, the industry could be electrified -- thereby reducing related greenhouse gas emissions and helping to achieve climate change goals." BC Hydro's plan calls for looking at all options, one being the development of more local gas-fired generation capability.

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