Alternatives to the Site C Hydroelectric Project

www.centrehelios.org Alternatives to the Site C Hydroelectric Project Presentation to the Joint Review Panel on the Site C Hydroelectric Project Philip Raphals for Treaty 8 First Nations December 10, 2013 1

Plan Introduction Approach Base Resource Plan (no LNG) > From IRP (Site C) > With Site 7b > With no new hydro Contingency Resource Plan (with LNG) > Base Resource Plan (low load) > Cost comparisons - Summary Conclusions 2

Introduction Explore key planning scenarios with and without Site C > Medium scenario (Base Resource Plan) > High scenario (Contingency Resource Plan) > Low scenario (not explicitly studied; resources as in BRP) Available resources > Portfolio analysis in IRP ignored certain key resources DSM Option 3 Capacity-oriented DSM Low capacity-factor SCGTs Site 7b > How much of a difference would it make if these options were retained? 3

Approach Rebuild resource stacks for each key scenario > Base Resource Plan (BRP), without LNG > Contingency Resource Plan (CRP), with LNG The highest load scenario > Base Resource Plan (BRP), low load For each one, compare present value differential costs > Capacity costs > DSM costs > Energy costs and revenues > All other costs remain unchanged 4

BRP (no LNG) with Site C - Energy www. centrehelios.org Site C 100% surplus to needs at ISD Market value of Site C energy far below unit cost 5

BRP (no LNG) with Site C - Capacity www. centrehelios.org Site C capacity not fully used until 2030 Little or no market value for surplus capacity 6

BRP (no LNG) Site 7b Changes from IRP scenario > Eliminate Site C > Add Site 7b (in 2029) > DSM Option 3 instead of DSM Option 2 > Capacity-focused DSM programs and industrial load curtailment (P10 in 2040) > Time-of-use rates to 75% of identified potential No surpluses 7

Annual Energy (GWh/yr) 100,000 90,000 80,000 70,000 60,000 50,000 40,000 Peak Capacity (MW) 19,000 18,000 17,000 16,000 15,000 14,000 13,000 12,000 BRP without LNG (Site 7b) - Energy BRP without LNG (Site 7b) - Capacity Market Purchases Site 7b Total existing and committed supply Annual Energy Demand Before Conservation Annual Energy Demand After Conservation Revelstoke Unit 6 GMS Units 1-5 Capacity Site 7b 11,000 10,000 F2014 F2015 F2016 F2017 F2018 F2019 F2020 F2021 F2022 F2023 F2024 F2025 F2026 F2027 F2028 F2029 F2030 F2031 F2032 F2032 Existing Peak Capacity Sup 8

BRP (no LNG) no new hydro To compensate for the loss of capacity from Site 7b, Revelstoke Unit 6 is advanced by two years Market purchases are used to make up the energy shortfall in later years > Difficulty of modelling additional clean resources with available information 9

19,000 BRP without LNG (no new hydro) - Capacity 18,000 17,000 Capacity (MW) Annual Energy (GWh/yr) 16,000 15,000 14,000 13,000 12,000 11,000 100,000 10,000 90,000 80,000 70,000 60,000 50,000 40,000 BRP without LNG (no new hydro) - Energy F2014 F2015 F2016 F2017 F2018 F2019 F2020 F2021 F2022 F2023 F2024 F2025 F2026 F2027 F2028 F2029 F2030 F2031 F2032 F2033 Revelstoke Unit 6 GMS Units 1-5 Capacity Increase Existing Peak Capacity Supply Peak Capacity Demand Before Conservation Peak Capacity Demand Af C i Market Purchases Total existing and committed supply Annual Energy Demand Before Conservation Annual Energy Demand After Conservation 10

BRP (no LNG) cost comparison www. centrehelios.org Calculate year-by-year costs for each cost category that varies from one scenario to another > Capacity costs > Energy costs and revenues Import costs Gas costs Export revenues > Differential DSM costs 600 500 400 300 200 100 0-100 Site C Site 7b No new hydro -200 11

BRP (no LNG) cost comparison Present value > Site C: $1,545 million > Site 7b: $923 million > No new hydro: $605 million Site C the most expensive of the three options No new hydro the least expensive www. centrehelios.org NB: only the differential costs between scenarios is meaningful Differential PV ($M) $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 BRP without LNG Site C Site 7b no new hydro > Absolute values are not > Because only certain cost categories are included 12

CRP (with LNG) Site C MW 19,000 18,000 17,000 16,000 15,000 14,000 13,000 12,000 11,000 10,000 CRP with LNG (Site C) Capacity F2014 F2015 F2016 F2017 F2018 F2019 F2020 F2021 F2022 F2023 F2024 F2025 F2026 F2027 F2028 F2029 F2030 F2031 F2032 F2032 Market Purchases Clean Resources Revelstoke Unit 6 GMS Units 1-5 Capacity Increase Gas Capacity Site C Existing Peak Capacity Supply Peak Capacity Demand Before Conservation Peak Capacity Demand After Conservation Includes almost 2,000 MW of SCGTs Includes 500 MW and 4,500 GWh of market purchases, in certain years 13

CRP (with LNG) with and without Site 7b www. centrehelios.org Use same level of clean resources as in Site C scenario Replaced some SCGTs with CCGTs, for more efficient use of gas 14

MW 19,000 18,000 17,000 16,000 15,000 14,000 13,000 12,000 11,000 10,000 100,000 CRP with LNG (Site 7b) Capacity CRP with LNG (Site 7b) - Energy www. centrehelios.org Market Purchases CCGT Clean Resources Revelstoke Unit 6 GMS Units 1-5 Capacity Increase SCGT Site 7b Existing Peak Capacity Supply Peak Capacity Demand Before 90,000 80,000 Market Purchases CCGT MW 70,000 60,000 Clean Resources SCGT Site 7b Revelstoke Unit 6 50,000 40,000 Total existing and committed supply Annual Energy Demand Before Conservation 15

CRP (with LNG) with no new hydro Compared to Site 7b solution > 200 MW more CCGT; 100 MW less SCGT www. centrehelios.org > 1,400 GWh/yr more market energy purchases Could probably be displaced by add l clean resources Compared to Site C solution (IRP) > Slightly more gas > CCGT as well as SCGT > Energy purchases at end of period Market energy (2033) SCGT CCGT MW MW GWh/yr Site C 1960 0 0 Site 7b 1500 300 2100 no new hydro 1400 500 3500 > Gas resources may allow firming of some non-firm hydro, reducing need for purchases 16

MW 19,000 18,000 17,000 16,000 15,000 14,000 13,000 12,000 11,000 10,000 100,000 90,000 80,000 70,000 60,000 50,000 40 000 CRP with LNG (no new hydro) - Capacity CRP with LNG (no new hydro) - Energy www. centrehelios.org Market Purchases CCGT Clean Resources Revelstoke Unit 6 GMS Units 1-5 Capacity Increase SCGT Existing Peak Capacity Supply Peak Capacity Demand Market Purchases CCGT Clean Resources SCGT Site 7b Revelstoke Unit 6 Total existing and committed supply 17

CRP (with LNG) cost comparison Costs much higher than in other scenarios > Costs highest with Site C > Somewhat lower with Site 7b > Much lower with no new hydro CRP with LNG www. centrehelios.org Differential PV ($M) 4,000 3,800 3,600 3,400 3,200 3,000 2,800 2,600 2,400 2,200 2,000 1 Site C Site 7b no new hydro 18

BRP (low load) Site C No analysis in EIS > BC Hydro plans to medium scenario Very limited analysis in IRP > 4 scenarios out of 58 > Table 6-12 shows that, for low load ( small gap ), Site C scenario costs $1 billion more than without Site C Charts show that, with low load scenario: > Site C energy is 100% surplus well beyond 2040 > Site C capacity is 100% surplus until 2032 19

16,000 BRP Low Load (Site C) - Capacity MW 15,000 14,000 13,000 12,000 11,000 10,000 80,000 BRP Low Load (Site C) - Energy Site C Existing Peak Capacity Supply Peak Capacity Demand Before Conservation 70,000 Site C GWh 60,000 50,000 40 000 Total existing and committed supply Annual Energy Demand Before Conservation Annual Energy Demand After Conservation 20

BRP (low load) without Site C No scenario prepared with Site 7b > Not needed within planning period Existing resources surplus to capacity and energy needs through 2040 > Same DSM options as in other scenarios 21

BRP BRP (low Low Load load) (no new hydro) no -new Capacityhydro 16,000 www. centrehelios.org 15,000 14,000 MW 13,000 12,000 11,000 10,000 80,000 BRP Low Load (no new hydro) - Energy Existing Peak Capacity Supply Peak Capacity Demand Before Conservation Peak Capacity Demand After Conservation GWh 70,000 60,000 50,000 Total existing and committed supply Annual Energy Demand Before Conservation 40,000 Annual Energy Demand After 22

BRP (low load) cost comparison Building Site C increases costs by over $1 billion (as seen in IRP) 0 BRP (low load) without LNG Differential PV -500-1,000-1,500-2,000 Site C no new hydro -2,500 23

Cost comparisons - Summary Costs significantly higher with Site C, in all scenarios 5,000 4,000 3,000 2,000 1,000 Present Value Differential Costs Site C Site 7b no new hydro Present value differential costs ($ millions) BRP Low Load (no BRP (no LNG) CRP (LNG) Site C -1,073 1,545 3,751 Site 7b 923 3,369 no new hydro -2,216 605 2,396 0-1,000-2,000 BRP Low Load (no LNG) BRP (no LNG) CRP (LNG) -3,000 24

Differential costs Compared to Site 7b, differential PV costs for Site C are $400-600 million higher Compared to no new hydro, cost for Site C are $0.9 to $1.4 billion higher 1,500 Differential PV Costs (Site C compared to Site 7b) 1,500 Differential PV Costs (Site C compared to "no new hydro") $ millions 1,000 500 $ millions 1,000 500 0 BRP (no LNG) CRP (LNG) 0 BRP Low Load (no LNG) BRP (no LNG) CRP (LNG) 25

Conclusions Key resource options were omitted from the Proponent s alternatives analysis > Using these resources, forecast capacity and energy needs can be met at significantly lower cost than with Site C > This is particularly true for low loads, where Site C results in large and costly surplus. > It is also true for the high-load Contingency Resource Plan (with LNG). DSM Option 3 was sacrificed to allow short-term savings of $330 million (2014-2022). But Site C adds costs of around $1 billion. > It appears that these long-term costs were not taken into account. 26

Conclusions The purpose of the Site C Project is to meet BC Hydro s capacity and energy needs cost-effectively. These needs can be met more costeffectively (and with lower risk) without the Site C Project. 27