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BC Hydro planning future without Vancouver Island’s largest gas fired power plant

Campbell River Island Generation plant’s electricity agreement expiring in 2022; renewal in doubt
Island Generation, a 275-megawatt natural gas-fired power plant in Campbell River. Photo courtesy Capital Power.

The future of the Island Generation power plant in Campbell River is in question, as BC Hydro has indicated it has no plans to renew its contract with Capital Power, the facility’s owner and operator.

Island Generation is a 275-megawatt natural gas-fired power plant — the largest generating facility on Vancouver Island — located in Campbell River. It is owned and operated by Capital Power, which holds an electricity purchase agreement with BC Hydro set to expire in April 2022.

In June, BC Hydro released its draft Integrated Resource Plan (IRP), in which the utility states there is ‘no basis to assume’ this agreement will be renewed. The reason the facility may not be in BC Hydro’s long-term plans is that it is one of the largest greenhouse gas emitters of power plants in the province, releasing about 100,000 tonnes of carbon dioxide a year.

But Capital Power says that the facility plays an important role in providing power throughout the province, especially for Vancouver Island, by providing back-up power and enhancing grid reliability. It also has a local impact, providing 15 permanent jobs and up to $1.5 million in tax revenue to the city per year.

Representatives from the company provided a presentation to Campbell River city council on July 23, in which they argued for the importance of maintaining the electricity purchasing agreement — and keeping the facility operational.

Island Generation is a ‘dispatchable facility’ meaning it supplies power on demand. But per BC Hydro, it is used infrequently in favour of cheaper sources.

But Brian Vaasjo, Capital Power president and CEO, cited a 2017 report by the British Columbia Utilities Commission (BCUC) stating the facility is dispatched during outages and high-load periods (e.g. cold snaps) and for exporting and testing.

“In our view, nothing has changed since then, in terms of those core requirements, nor did BC Hydro’s draft IRP include any analysis to suggest that anything had or would change over the next 10 years,” said Vaasjo. “One thing that has changed is that load growth is expected to continue — and potentially at a more rapid pace.”

The facility’s fundamental role is providing insurance against challenges arising from unforeseen events, such as extreme weather events, the importance of which has never been more evident than this year, he said.

“Extreme heat and system events of this year have resulted in BC Hydro calling on Island Generation to keep the lights on,” said Vaasjo.

Should the facility close, generation capacity on Vancouver Island would decrease by 34 per cent and increase the island’s dependence on subsea connections from the mainland, which have faced disruptions this summer.

“Although some redundancy is built into the system, transmission infrastructure is subject to plant and forced outages, and requires robust contingency plans to ensure reliability to its customers,” he said.

“In our view, BC Hydro has not provided adequate information showing the impacts of Island Generation removal of Vancouver Island Reliability, or (that) the lines would have the capacity to respond to the full range of contingencies that Island Generation has been effective in responding to.”

Given these concerns, Capital Power is attempting to have the decision outlined in the draft IRP reversed.

Time is of the essence. BC Hydro has indicated it will provide its final resource plan to BCUC by the end of year. But as it could take over a year for BCUC to review and approve it, meaning the contract will have expired by then.

“By the time this process may end, the island facility would likely be decommissioned, with demolition underway,” said Vaasjo.

Campbell River city council already acted to support the facility with a letter. But in response to the presentation, city council passed a motion for the city to request BC Hydro renew the electrical power generation contract, and for council to work in cooperation with Capital Power to develop a strategy and action plan to accomplish this goal.

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