IPP's - Why Are They So Important?
In 2004, BC Hydro released its Integrated Electricity Plan (IEP) for acquiring the electricity resources necessary to ensure BC Hydro can meet its obligation as a publicly owned utility to provide reliable, least cost electricity sufficient to meet anticipated customer demand.
The plan, which has a twenty-year outlook, focuses on enhancing environmental and social responsibility with a voluntary 50 per cent Clean Energy target.
In March 2006, BC Hydro released its updated IEP with a goal to return British Columbia to being self-sufficient in energy production, as opposed to a net importer, and to continue to provide a secure supply of energy.
Since 2001, British Columbia has had to import energy from out of province sources to meet its domestic demand. In 2005 alone, BC Hydro imported about 5,000 GWh, or the equivalent to supplying electricity for 500,000 homes. BC Hydro is also relying on 6000 GWh/yr from its Burrard Thermal plant, which is located on the north side of Burrard Inlet in the Lower Mainland airshed. As air quality in the Lower Mainland is a major concern, this dependency on thermal power can be avoided wherever an economical clean alternative is available. The high gas prices are also a major concern, which could result in major increases in electricity prices if BC Hydro is forced to rely on Burrard Thermal in the long-term. Therefore green power solutions remain the best viable option for BC Hydro.
IPPs working with BC Hydro to develop these solutions will help achieve emission reduction goals and ensure that electricity rates remain low.
IPPs do not burden B.C. taxpayer with any extra debt required to finance these renewable energy projects as IPPs are completely financed through non-government sources with no recourse back to the province. IPPs provide electricity to BC Hydro at a fixed price and IPPs take all of the risk of construction cost overruns, operational problems and interest rate fluctuations.
