© Reuters. FILE PHOTO: Construction activities take place at the LNG Canada site in Kitimat, Canada, September 2022. LNG Canada/Handout via REUTERS/File Photo
(This Jan. 19 story was corrected to correct the source's affiliation with Clean Energy Canada, not Clean Energy BC, in paragraph 17)
By Rod Nickel
WINNIPEG, Manitoba (Reuters) – British Columbia pushed ahead with its C$36 billion ($26.7 billion) plan to expand its grid over the next decade, but Canada's Pacific Coast province still won't be able to supply major projects. of liquefied gas (LNG) with the necessary hydroelectric energy to avoid generating high emissions.
Lengthy regulatory processes mean a critical expansion of the northern transmission line will only be ready years after LNG plants come online and droughts are already slowing British Columbia (BC) power generation.
BC boosted its electricity grid spending plans Tuesday by 50%, as industry demand for renewable hydropower increases and the province shifts to electric vehicles and electric heating in buildings.
“It's a huge challenge to meet all the potential demand for electricity, daunting,” said Barry Penner, former British Columbia environment minister and now president of the Energy Futures Initiative, a program of the advocacy group Resource Works.
Providing hydropower to LNG projects, including Shell-led LNG Canada, is critical to the province's and Canada's goals to dramatically reduce emissions by 2030. LNG export facilities would tap lucrative marine demand for natural gas Canadian.
LNG Canada, which is 90% complete, will operate its 14 million metric ton per year facility on high-emitting natural gas, complicating Canada's net zero goals. The company, which is considering a second phase that could shift to grid power once it is available, said in a statement Thursday that it is encouraged by the government's efforts to accelerate the expansion of electricity.
The key part of BC's network plan for LNG Canada is the C$3 billion expansion of a transmission line in the northwest. Building it would take up to 10 years because of the need to reach an agreement with First Nations and obtain permits, said BC Hydro CEO Chris O'Riley.
“We are all committed to building these projects as quickly as possible and we all want them to run on electricity. That is our goal,” O'Riley said in an interview.
BC Hydro's schedule means the transmission line won't be expanded until the early 2030s, after LNG Canada and rival proposals Ksi Lisims LNG and Cedar LNG are up and running.
SUPPORT FROM FIRST NATIONS
A condenser station project in northwest British Columbia will provide enough power for Cedar LNG, a Haisla Nation and Pembina Pipeline (NYSE:) project, O'Riley said. Ksi Lisims plans to launch from 2028.
First Nations support for the Northwest Transmission Line could accelerate the regulatory timeline. K'uul Power, a consortium of 11 First Nations, is in talks to buy 50% of the project from BC Hydro.
“If you're in charge, then you're okay with going fast because you can protect your interests,” said K'uul CEO Alex Grzybowski. “An expedited process is totally on the table.”
BC has formed a working group to expedite permitting for clean energy projects.
BC, like Quebec, whose state-owned Hydro Quebec launched its own long-term plan for grid expansion in November, relies on hydropower for most of its power. That resource and British Columbia's coastal ports have made it the center of Canada's nascent LNG industry. Neighboring Alberta, by contrast, relies on high-emission natural gas for power generation.
Droughts pose another challenge for BC BC Hydro imported a fifth of its 2023 power needs as the drought reduced hydropower generation.
BC Hydro plans to add wind and solar generation to help cover the risk of drought, O'Riley said.
But British Columbia may still lack enough energy to satisfy all industries, from LNG to critical mineral extraction and hydrogen proposals, said Evan Pivnick, program manager at Clean Energy Canada.
“One of the key questions BC will have to confront is: What industries is it prioritizing?” Pivnick said.
($1 = 1.3511 Canadian dollars)
