Integrated Electricity Plan (IEP) 2005 Resource Option Workshop #1 - December 7, 2004 Meeting Notes Version: January 24, 2005 CONTENTS

Transcription

1 CONTENTS MEETING OBJECTIVES...6 AGENDA - TUESDAY, DECEMBER 7 TH...6 HANDOUTS PROVIDED AT THE MEETING...7 AGENDA ITEM #1 RESOURCE OPTIONS...7 QUESTIONS & DISCUSSION...7 AGENDA ITEM #2 IEP & PROCESS INTRODUCTION...8 QUESTIONS & DISCUSSION...8 AGENDA ITEM #3 BREAK OUT SESSIONS...9 AGENDA ITEM #4 REPORT BACK FROM BREAKOUT SESSIONS...10 GROUP ADDITIONAL RESOURCE TYPES TO CONSIDER AND/OR SPECIFIC PROJECTS TO BE INCLUDED...10 COMMENTS ON HOW THE RESOURCE TYPES ARE CHARACTERIZED (ATTRIBUTES)...10 FEEDBACK ON SCREENING CRITERIA...11 ADDITIONAL COMMENTS...11 GROUP RESOURCE TYPES MISSING?...11 MISSING PROJECTS...11 CHARACTERISATION BY ATTRIBUTES...11 GROUP ADDITIONAL FEASIBLE RESOURCE TYPES TO CONSIDER?...13 OTHER INDIVIDUAL PROJECTS TO INCLUDE...13 OTHER SUGGESTIONS...13 FEEDBACK ON PROPOSED SCREENING CRITERIA...14 TOPIC SPECIFIC TECHNICAL WORKING SESSIONS ALREADY PLANNED...14 TOPIC SPECIFIC TECHNICAL WORKING SESSIONS OTHERS REQUIRED?...14 GROUP HAVE WE INCLUDED ALL FEASIBLE RESOURCE TYPES?...14 OTHER INDIVIDUAL PROJECTS TO INCLUDE:...15 EXPAND ATTRIBUTES...15 DO GENERIC BLOCKS MAKE SENSE...16 OTHER TOPIC SPECIFIC TECHNICAL WORKING SESSIONS REQUIRED?...17 AGENDA ITEM #5 RESOURCE CHARACTERISATION: TECHNICAL AND INPUT DATA...17 Meeting December 7, 2004 at Westin Grand in Vancouver Page 1

2 QUESTIONS & DISCUSSION...17 AGENDA ITEM #6 UNIT COST METHODOLOGY...18 QUESTIONS & DISCUSSION...18 Meeting December 7, 2004 at Westin Grand in Vancouver Page 2

3 ATTENDEES (in alphabetical order by organization of person) Name Anne Cochran Michael Harstone Dan Robinson TJ Schur Brian McCLoy Dr. John Calvert Kristann Boudreau Mary Hemingson Bev van Ruyven Rohan Soulsby Dale Littlejohn Calli O Brien Dan Wilson Ron Sanderson Rama Vinnakota Geza Vamos Steve O Horman Henk Saaltink Nick Andrews John Johnson Bruce Duncan Ron Zeilstra David Craig Ron Percival Katherine Muncaster David Morrow Dan Smith David Austin Keith Boutcher Steve Davis Doug S. McKay Organization Compass Resource Management Advanced Energy Systems Ltd. Aeolis Wind Power Corporation BC Business Council BC Citizens for Public Power BC Hydro BC Hydro BC Hydro BC Hydro BC Sustainable Energy Association BC Sustainable Energy Association BCOMM Tourism Management BCTC BCTC BSc. Environmental Sciences Canadian Hydro Developers Inc. Central Valley Naturalists Cloudworks Energy Inc. Cloudworks Energy Inc. Columbia Power Corporation Columbia Power Corporation Commercial Energy Consumer of BC Earth First Energy Inc. Energy and Materials Research Group, Simon Fraser University (SFU) and BC Sustainable Energy Association (BC SEA) EPCOR Power Development Corp. Hamatia Treaty Society Independent Power Producers Association of BC (IPPBC) Independent Power Producers Association of BC (IPPBC) Independent Power Producers Association of BC (IPPBC) International Brotherhood of Electrical Workers Meeting December 7, 2004 at Westin Grand in Vancouver Page 3

4 Dan Potts Dal Scott Sharron Simpson Sam Mottram Derek Hutchinson Roger McLauglin Neil Banera Michael Margolick John Rivers Russell Leslie Collier Azak Dennis Fitzgerald Fred Fortier Daren Anderson Shauna Hill Randal Hadland Gwen Johannson Patricia MacDonald Susan Wilkins Sam Costa Kevin Gilchrist Harvie Campbell Dick Gathercole Gerry Nellestijn Zafeer Alibhai W.D. Stothert Jane McRae Dr. Nola Kate Seymoar (Kate) Ken Ross Stephanie Salbach James Wong Ron MacDonald Stuart Smith Joint Industry Electricity Steering Committee (JIESC) Joint Industry Electricity Steering Committee (JIESC) Kelowna City Council and Central Okanagan Regional District Knight-Piesold Consulting Ledcor Power Inc. Ministry of Energy, Mines and Resources Ministry of Land and Water BC Ltd. Nai Kun Wind Development Inc. National Energy Nelson Hydro Nisga a Lisims Government (Director of Lands & Resources) Norske Canada North Thompson Indian Band Northwest Energy Services Company, LLC Peace Energy Peace Valley Environmental Association Peace Williston Advisory Committee (PWAC) PIAC Pottinger Gahery Env. Princeton Light and Power Co. Ltd. Pristine Power Pristine Power Inc. Public Interest Advocacy Centre (PIAC) Salmo Watershed Streamkeepers Society SFU Engineering Stothert Engineering Ltd. Sustainable Cities Foundation Sustainable Cities Foundation Terasen Gas Inc Terasen Gas Inc. Terasen Gas Inc. The Sheltair Group Whitewater Kayaking Association of BC Meeting December 7, 2004 at Westin Grand in Vancouver Page 4

5 BC HYDRO PROJECT TEAM Dec 7 Name Organization & Department Basil Stumborg BC Hydro, Stakeholder Engagement Brandee Clayton BC Hydro, IEP Project Management Office a.m. David Facey BC Hydro, Stakeholder Engagement p.m. Dorell Carlson BC Hydro, Energy Planning Heather Matthews BC Hydro, Energy Planning Kristann Boudreau BC Hydro, Stakeholder Engagement Mary Hemmingsen BC Hydro, Power Planning and Portfolio Management Michael Harstone Compass Resource Management (external consultant) Randy Reimann BC Hydro, IEP Project Management Office Rohan Soulsby BC Hydro, IEP Project Management Office Sony Bae BC Hydro, Stakeholder Engagement Role on the IEP Project Team Facilitator & Decision Analyst for Provincial IEP Committee IEP Logistics Coordinator IEP Project Advisor IEP Resource Options Task Manager IEP Technical Coordinator Facilitation & Decision Analysis at Regional Stakeholder Workshops BCH representative on PIEPG Facilitation & Decision Analysis at Regional Stakeholder Workshops First Nations Engagement in IEP Project Manager for 2005 IEP IEP Project Advisor Facilitation of workshop breakout group. Meeting December 7, 2004 at Westin Grand in Vancouver Page 5

6 MEETING OBJECTIVES The objective of the Resource Options Workshops are to obtain input of interested parties with respect to Resource Options inventory and characteristics including: price (UEC calculations), volume, dependable capacity, firm energy, environmental and social attributes In Workshop #1, the following questions were asked of the participants: Has BC Hydro included all feasible resource types? Are there significant individual projects not identified? Comments on how resources are characterized by the attributes. Feedback on proposed screening criteria and use of database. Other topic specific technical working sessions required? AGENDA - Tuesday, December 7 th 8:30 a.m. Session I IEP & Process Introduction 9:30 a.m. Session II Resource Options 10:45 a.m. Break 11:00 a.m. Break out session 12:00 a.m. Lunch 1:00 a.m. Report Back 1:30 p.m. Session III Resource Characterisation -Technical and Input Data 2:30 p.m. Break 2:45 p.m. Session IV Unit Cost Methodology 3:45 p.m. Next Steps and Wrap up 4:00 p.m. End of Day Meeting December 7, 2004 at Westin Grand in Vancouver Page 6

7 HANDOUTS PROVIDED AT THE MEETING Paper copies of the following materials were distributed at the meeting. All of these materials will be made available on the BC Hydro website at: Item Session I IEP & Process Introduction Session II Resource Options Description Mary Hemmingsen delivered a power point presentation introducing the IEP and Stakeholder Engagement and First Nations Process. Rohan Soulsby delivered a power point presentation that reviewed the resource options considered in the 2004 IEP and the feedback received to date about additional resource options to be considered in the 2005 IEP. Screening Criteria Sheet 2004 IEP Database Table of Contents 2004 Database screened using proposed criteria Session III Resource Characterisation - Technical and Input Data 2004 IEP Database Summary Session IV Unit Cost Methodology Example Calculation Rohan Soulsby distributed a one-page handout outlining the proposed criteria for screening potential projects in (and out) of the database that will be used to create the blocks of resource options that will be used to build portfolios. Rohan Soulsby distributed this document, which lists all of the resource types, and individual projects that were in the 2004 IEP database. Rohan Soulsby distributed this document, which shows preliminary results of how the resource types and projects would be grouped after applying the proposed screening criteria. Randy Reimann delivered a power point presentation reviewing the technical, cost, environmental and social input data that is used in the IEP. Randy Reimann distributed a table of projects in the 2004 IEP database with a summary of technical, cost, environmental and social attributes. Randy Reimann delivered a power point presentation reviewing the proposed unit energy cost methodology for the 2005 IEP. Randy Reimann distributed prints of an excel spreadsheet demonstrating the unit energy cost calculation. AGENDA ITEM #1 Resource Options Mary Hemmingsen formally welcomed everyone to the first Resource Options Workshop, and gave an overview of which industries and agencies were attending the workshop (see page 3 for a list of attendees). Mary also introduced the members of the BC Hydro Project Team that attended the meeting (see page 4 for a list of Project Team members). Mary delivered a PowerPoint presentation that introduced the IEP and Stakeholder Engagement and First Nations Process. Questions & Discussion Here are the highlights of the discussion that took place during and after the presentation: Meeting December 7, 2004 at Westin Grand in Vancouver Page 7

8 BC Hydro requires a long-term plan and stakeholder input into process. Concerns were raised that BC Hydro doesn t have a long-term plan. Mary clarified that the objective of the 2005 IEP was to develop a long-term plan, and explained the different opportunities for involvement in the planning process. An IEP will be completed every other year, and in non-iep years there would also be stakeholder consultation on the REAP. Generalization vs. Site Specific information in Resource Options Report. Picking the right level of detail to characterize resource options for planning level assessments in the IEP is a challenge, and this is an area that BC Hydro is looking for feedback as to how the resources are characterized. BC Hydro as a net importer? BC Hydro has sufficient resources to meet our demand right now, and plans to have sufficient resources to meet future demand. BC Hydro does import when there is opportunity to purchase low-cost imports from the US and Alberta. If imports were not available, BC Hydro would be able to meet customers demand. Environmental and Social Costs. The difficulties and benefits of including environmental and social costs were discussed. Link between IEP portfolio and acquisitions. Questions were raised about how BC Hydro would pick a portfolio from planning level information, versus picking a portfolio from competitive bids. This lead to a discussion of the link between planning and acquisitions. BC Hydro requires an accurate estimate of the amount and cost of resources available. If the market cannot deliver what is estimated, then information from the calls would be feed back into the next planning cycle and the long-term portfolio may be adjusted. This is why BC Hydro is committed to working closely with future supply providers (IPPS and industry) to ensure appropriate information for planning. AGENDA ITEM #2 IEP & Process Introduction Rohan Soulsby provided an overview of Resource Options in the 2004 IEP, including where the information came from and what resource types and attributes were included. He also described efforts underway to obtain information through a Request for Expression of Interest, and outlined BC Hydro s proposed screening method to identify projects to be used in developing generic resource type blocks. Questions & Discussion The following is a summary of the points of clarification and discussion that took place during the review of resource options: Amount of resources required. Forecasts are made for both capacity and energy and there isn t a simple conversion factor between the two. Energy requirements are growing at about 1.5% per year, and slightly higher for capacity. This translates into a requirement for approximately 150 MW of new capacity each year. Resource Smart upgrades. There was a question about capacity available during resource smart upgrades. Maintenance or upgrade outages at BC Hydro s facilities are scheduled to Meeting December 7, 2004 at Westin Grand in Vancouver Page 8

9 ensure enough capacity is available throughout the year to meet load. Outages are generally not planned for the winter peak demand period. Downstream Benefits. The province of British Columbia owns the Canadian Entitlement to Downstream Benefits, which are sold at market value by Powerex. The benefits from the sale of power from the Downstream Benefits accrue to the Province. The Downstream Benefits are available for BC Hydro to purchase from Powerex at market value. What defines a project for planning purposes? A project is somewhere between just an idea in someone s mind and starting the construction. The level of information we have on different projects ranges from just a concept to feasibility design level studies. To have useful information for planning purposes BC Hydro requires accurate and verified information. This is discussed more when reviewing the proposed screening criteria. Request for Proposals to obtain information. There s a balance between cost of obtaining the information and level of effort that IPPS may be willing to undertake to provide information when there is no commitment to by the energy. Demand Side Management in Screening Criteria. All of the Demand Side Management (DSM) projects or programs are still handled through Power Smart. Power Smart is being divided into energy efficiency and load displacement, but both will still come under the Power Smart umbrella. BC Hydro will change screening criteria flow chart to reflect this. Link between projects in Generic Blocks and acquisitions. The projects that are used to create the generic blocks will not necessarily be built even if those blocks are in the preferred portfolio at the end of the 2005 IEP. Acquisitions will still be through a competitive process. US projects evaluated? The first screening junction in the proposed method indicates that projects from outside BC will be evaluated. These projects could be evaluated as a generic import category. In order to understand self-sufficiency, projects available in BC need to be compared to projects in other jurisdictions. BC Hydro is connected to other jurisdictions, and must keep up to date on developments in other areas such as the tarsands in Alberta. AGENDA ITEM #3 Break out Sessions The participants were randomly divided into four groups to discuss and provide comments on the following questions: Has BC Hydro included all feasible resource types? Are there significant individual projects not identified? Comments on how resources are characterized by the attributes. Feedback on proposed screening criteria and use of database. Other topic specific technical working sessions required? Meeting December 7, 2004 at Westin Grand in Vancouver Page 9

10 AGENDA ITEM #4 Report Back From Breakout Sessions The facilitators from the breakout sessions reported back to the whole group a summary of the discussions. Information was recorded on flip charts and is provided for each of the four groups below: Group 1 Additional Resource Types to Consider and/or Specific Projects to be Included Pump Storage Flow Cells -utility scale -10, MW Identify nuclear as an option but as per the province s energy policy it is a non-starter There was a Wind Energy Study Report recently completed that listed a number of potential additional wind projects in BC, which are not included in BC Hydro s list. Why is this? Comments on How the Resource Types are Characterized (Attributes) Are the attributes related to energy costs adjusted for location (e.g. include transmission costs) or are they at site energy costs? Dependable capacity for wind seems inappropriate How is dispatchability taken into account? And how is it affected by factors such as market conditions or whether a hydro facility is a run of river plant? Are maintenance costs included into the energy cost attributes (i.e. how is the remoteness of a resource type taken into account) There should be an attribute for social acceptability for resource types. In addition, how are new resource types compared against existing facilities such as Burrard thermal from a social perspective? How do unit costs take into account seasonal variations and market components? There needs to be attributes that better deal with fuel and thermal generation. Specifically, fuel risk and price volatility need to be incorporated into the analysis of resource types. Other fuel factors to consider are who bears the risk, DPP, and differentiating between fuel types. How are ancillary benefits incorporated and taken into account, including: power condition, sinc-condense, vars, etc. There should be a Reliability attribute that looks at large scale versus small scale (e.g. distributive generation) Need to better define Green Criteria versus Clean Criteria in the resource types (e.g. nonrenewable, an improvement over current conditions, Eco-Logo versus Green E) Meeting December 7, 2004 at Westin Grand in Vancouver Page 10

11 Feedback on Screening Criteria Industrial customer self generation in BCH energy There was a comment as to why load displacement projects were still being considered as a component of PowerSmart Energy efficiency should be treated as off load and separate Additional Comments There needs to be a clear definition for what is meant by Self Sufficiency in terms of energy planning in BC In terms of importing electricity there needs to be clear guidelines and rules for when and how How multi-year storage facilities manage their reservoir reserves need to be discussed in terms of how self sufficiency is achieved with Burrard thermal or using IPPs or how imports are rationalized recognizing both economic and socio-environmental impacts Issue of externalities and how they integrate into the planning process There was a comment about call for tenders (CFTs) and how they should or could be region specific Group 2 Resource types missing? Pricing initiatives and other policies Organisation/ Management of distributed generation affects characterisation of these Solar thermal US Nuclear part of imports Missing Projects Hurley River La Joie (Derek Hutchinson) Dependable capacity in lower mainland (e.g. hospitals, etc backup generators) Central heating of Co-Gen instead of boilers (Derek H.) Waste water treatment plan (e.g. GVRD) Coal gasification Characterisation By Attributes Wind has 0 dependable capacity Meeting December 7, 2004 at Westin Grand in Vancouver Page 11

12 What is Hydro looking for in its CFTs? Producers need to know to provide this. Suggestion dependable capacity how does BCH define this benchmark vs. other jurisdictions, also explore firm energy definition workshop Location relative to load transmission, is this taken into account for costs? Size and uncertainty have an impact on the cost or building How is the life of project taken into account for costing? Incrementally vs. large blocks of energy is an important question. Back off savings (Fixed costs vs. variable costs) Fuel Cost Risk in Purchases (Fixed costs vs. variable costs) Regulatory Risk (H, M, L?) First Nations input Footprint a poor proxy for ecological impact Wind footprint hard to capture with a typical footprint measure. How to capture tech progress? (e.g. wind) Location and size interacts with transmission impacts and costs (building, transmission, maintenance costs and VAR impacts) Co-ordination costs/issues of multiple generations e.g. wind farms diversity has positives and negatives Dispatchability Cost of information How do we focus activity on key info gaps? Screening Criteria What about exports? Other resources may sell outside system For import co-op, why aren t there import caps to reduce exposure to imports (e.g. 5%) Imports raises other cost issues e.g. other benefits from BC Generation Definitions and examples dependable capacity, firm energy Characterisation of Eco impacts - Air impacts - Land impacts - Water impacts Costs delivered or at site? Cost allocation of transmission upgrades (comparability of info and levelling playing field) Meeting December 7, 2004 at Westin Grand in Vancouver Page 12

13 GROUP 3 Additional Feasible Resource Types to Consider? Wood waste for use in boilers Municipal solid waste Gas flaring at gas production facilities Oil sands CCGT s in Alberta Industrial DSM Alberta Transmission projects (as alternatives to local or regional supply) Passive or active heating system in residences, offices or communities Suggestion: describe possible future capacity for each resource type Other individual projects to include Compliance coal Princeton thermal wood & coal financially viable combination Other suggestions Look at creating the market conditions to foster more capacity on BC especially alternative sources of energy Encourage near-commercial Attributes to Characterize Resources Unit energy cost (UEC) Footprint land impact (options could include roads, transmission, site and land, penstocks, permitted area, resource area, inundated area) and consider introducing a severity of impacts factor Dependable capacity GHG Emissions - look at Pacific Corp and GHG attribute for existing (Burrard) and new resources Local Air Emissions Jobs Reliability Feasibility re. Transmission Meeting December 7, 2004 at Westin Grand in Vancouver Page 13

14 Cumulative impact on subsurface, surface, water, air or overlapping tenures (not just electricity production) Operation and maintenance costs (annual) Project life (if not included in Unit Energy Cost) Flexibility: ability to adjust to changing market conditions, technologies and societal values and preventing lock-in to costly project with long payback periods Fuel price risk/sensitivity Proximity to load Value of learning to be included as a positive attribute of new technologies clean/green resource options Feedback on Proposed Screening Criteria Clarify initial screen at top of diagram there is an additional screen that is being applied that is not explicitly noted (i.e., is the resource option allowed under law? and under current provincial government policy?) Topic Specific Technical Working Sessions Already Planned Dependable capacity def n, calculation Unit energy cost calculation Topic Specific Technical Working Sessions Others Required? Define big picture of total expected resource availability by resource type Integrated Energy Planning (e.g., issues related to fuel switching, link between heating and electricity, etc.) Group 4 Have we included all feasible resource types? Explicitly state No Nuclear, as per the Energy Plan Other projects not listed in database Elaho River (large hydro) not feasible in this planning horizon Objective is to aggregate specific projects into generic blocks, which can be used as input for portfolio building. With respect to project candidates included in the database, has BCH proactively gathered or merely those received through an application process (such as a call for tender)? Need a common understanding of dependable capacity Comfortable with list except projects associated with: Meeting December 7, 2004 at Westin Grand in Vancouver Page 14

15 demand management curtailment, efficiency, rate based options, load displacement, load shift, load management. Transmission and infrastructure (Transmission + Generation) costs should be included in trade off considerations. Load shaping consideration needs to be viewed at the portfolio (not project-specific) level. Other individual projects to include: Mine mouth site projects Quinsom Coal Gather/solicit smarter projects (Coal + small hydro) BP Cogen Project Connected via BPA into BCH grid (check TX constraints) If Cherry Point, why not include Sumas? Based on screening criteria, both must be included. North Vancouver Island Wind projects - Seabreeze (Nob Hill) - Hoberg Existing Not on List Gold River listed as future resource option not a generic block Why? Pump Storage - evaluated as part of overall system optimisation - part of the database, but fails screening for this planning horizon due to high cost - not aware of any specific projects BCH diversion potential - no longer option, diversion licences returned or environmental impacts (salmon streams) unacceptable. Regardless, listing potential, along with why not current being pursued, may be helpful for wider audience. Expand Attributes For thermal plants - H2O Consumption on cold day (For trade-off analysis, a significant question becomes is this an acceptable use of water?) Meeting December 7, 2004 at Westin Grand in Vancouver Page 15

16 Split out energy costs. Include water tax as potential benefit for hydro-related projects, as the tax money remains in BC, whereas gas tax and costs may not remain in BC. Capital Cost Some recognition for economic development (potential impact) in BC BC Multiplier Some recognition for costs (supplementary to Labour $ currently captured in database) that are spent and remain within BC. Meet Clean Criteria - Environmental impacts of clean different from green (more rigorous), and therefore additional recognition should be applied to green projects - Include green attributes based on ability to be certified Check on the trade-off analyses undertaken by the provincial committee, to ensure some of the recommendations are considered. How could green attributes be characterized beyond monetization (which is also required for selection)? Multi-Attribute trade off (need balance between monetary and other non-monetary considerations) is one option. Strong desire to monetize green attributes (especially for effective and expenditure decisions) Specify whether or not UEC are inclusive or exclusive of the green attributes to enable apples-to-apples comparison If including cost of green then need to include cost of compliance (i.e.) purchasing offsets) for relevant non-green projects Show break down of financial, social and environmental costs rather than one aggregate cost. Is it a waste resource (egg Biomass)? Should there be considerations for waste heat? Specifically, for recapturing waste heat for generation? A potential (technically feasible) resource type is this captured in Power Smart Projects? Associated current/existing process (are we trying to rid of it) Should there be a flip side for demand use (wasteful)? Do Generic Blocks make Sense Yes Make sure blocks are comparable Transmission/Infrastructure costs should both be included Costs Triggered Be Explicit about the 8 Transmission regions Meeting December 7, 2004 at Westin Grand in Vancouver Page 16

17 For Power Smart and Load Displacement projects, customers should bid in, just like on the supply options To be explicitly stated in database (level playing field) Rate design should consider Heritage Contract and Marginal Supply impacts Any consideration for market value for optimising portfolio? Is BC Hydro s current mandate to meet just the domestic demand? No, the Heritage Contract explicitly states that Trade Revenue (up to $200M) is to flow through to BC Hydro s customers. Final ROW Mar/Apr 2005 Other Topic Specific Technical Working Sessions Required? Desire to see further exploration and development of Power Smart options, such as energy efficiency and load displacement projects. Support of a technical session on Demand Side / Energy Efficiency by Norske was conveyed through Dennis Fitzgerald, and also Geza Vamos volunteered to be involved. AGENDA ITEM #5 Resource Characterisation: Technical and Input Data Randy Reimann delivered a power point presentation that described how the input data would be presented in the Resource Options Report and later used in the portfolio modelling for the IEP. Then he reviewed the technical, cost, social, and environmental input data that are used to characterize the resource types. Questions & Discussion Highlights of the discussion that took place during and after the presentation are provided: Diversity of portfolio. There was a general discussion about whether the diversity provided by a number of smaller projects is more reliable than one big project. Currently the dependable capacity is evaluated on a project-by-project basis. Evaluating dependable capacity across a number of smaller projects on a portfolio basis would likely result in a higher value of dependable capacity. Dependable Capacity and Wind. A number of wind developers do not agree with BC Hydro s view that as a class average wind has zero dependable capacity. This is an issue that BC Hydro is planning to discuss with the wind developers in more detail. Information on Small Hydro projects. A number of the small hydro developers offered information that might be helpful to characterize the dependable capacity for small hydro. BC Hydro will follow up with individuals in the industry. Run of river small hydro. The point was raised that a number of small hydro developments could produce more energy and have more dependable capacity if they were built with some storage, but in order to be green the projects could only have 24 hours of storage. The decision of how to develop a site is up to the developer, and it is an Meeting December 7, 2004 at Westin Grand in Vancouver Page 17

18 economic decision for the developer how best to develop the site. BC Hydro does not have a lot of information about medium sized hydro development in BC. Emissions. Dioxins have not been tacked so far. The point was made that the air emissions for biomass should be negative, not zero, because the biomass would otherwise just be burnt in beehive burners. Wildlife and recreation. There is recognition that the footprint attribute does not capture land impacts on wild life and recreation. Many of these impacts are very site specific and it is a challenge to represent these impacts at a planning level. Again, it is a question of finding the right level of information to be able to make planning level decisions. Social impacts. Currently keep track of construction and full time jobs. There was a discussion of BC multipliers for job benefits. For all of the social, economic, and environmental attributes it is a question of where to draw boundaries in order to assess these attributes. Cumulative Impacts. The question of cumulative impacts was raised, especially since BC Hydro now just has an acquisition call and doesn t control where the projects may be built. The sea-to-sky corridor was mentioned as an example. Neil indicated that the province has to show some leadership regarding this question and that BC Hydro would also likely have a role to play. AGENDA ITEM #6 Unit Cost Methodology Randy Reimann presented a power point presentation that explained how at site unit energy costs are calculated, and how other adjustments to the simple unit energy costs could be made to reflect other aspects such as dependable capacity. Questions & Discussion The following is a summary of the points of clarification and discussion that took place during the presentation: Natural Gas volatility, availability, and life cycle analysis. Currently BC Hydro looks at a range of gas scenarios for the 20 yr planning period. Fuel availability assumptions are inherent in the gas scenarios so have not been considered outside of those scenarios. The unit energy costs are shown based on one gas scenario, the range of gas scenarios is examined in the portfolio analysis. BC Hydro has started investigating Life Cycle Analysis. Comparison of IPP versus BC Hydro projects. For IPP projects, the unit energy cost is calculated based on the contract period (20 years), whereas BC Hydro projects are evaluated over the life of the projects. Renewal clause in the contracts is something BC Hydro is considering. The point was raised that BC Hydro s costs are much higher than IPP costs. Cost information in the Resource Option Database is the best available information. Costs for BC Hydro s projects include the incremental cost of the project (total construction cost and ongoing maintenance), it does not include a portion of BC Hydro s general overhead. Meeting December 7, 2004 at Westin Grand in Vancouver Page 18

19 Proposed adders to unit energy cost. The adjustment to the UEC being contemplated would only make an adjustment for dependable capacity, not other system costs or social environmental costs. There was a general discussion about some of the difficulties and benefits of monetizing environmental attributes. It was suggested that at the end of the portfolio evaluations it would be a good idea to make a list of the externalities that were unable to be quantified. Meeting December 7, 2004 at Westin Grand in Vancouver Page 19