British Columbia's long-term electricity plan will be delayed until after the next election, Energy Minister Rich Coleman said Friday, because of uncertainty surrounding the future of the liquefied natural gas industry.
Crown-owned B.C. Hydro was due to deliver its integrated resource plan to Mr. Coleman by December, which would set out how to meet the province's electricity needs into the future. But the province is still negotiating with four potential LNG suitors. If even two plants are built and they rely on B.C. Hydro to power their operations, the total electricity load for the province would increase by a staggering 25 per cent.
"It would be crazy to do an IRP now," Mr. Coleman said in an interview. "It's important to do this right."
The clean energy industry has been eagerly waiting for Hydro's plan to determine future investments in B.C.
If the LNG plants are not built – or if they are powered by natural gas – the opportunity for new private power projects will be limited.
Mr. Coleman paved the way for LNG plants to generate their own power by re-writing the Clean Energy Act last summer. Those changes define natural gas as a clean energy source if it is used to create LNG.
That designation is important, because Premier Christy Clark's jobs plan calls for the world's first LNG export facility that would run on "clean" energy. Her plan promises to put B.C. on the forefront of a global race to meet anticipated demand for LNG – natural gas that's been cooled to a liquid form.
Energy companies are scrambling to build export facilities on the West Coast because natural gas prices are higher in Asia than in North America, where new natural gas finds have pushed prices down. The premier's ambitious plans would see one terminal open by 2015 and three by 2020.
However those plans are still far from certain. Natural gas drilling is down sharply in B.C. because of low domestic prices. And the federal government's decision to block the proposed Petronas takeover of Progress Energy Resources Corp. has cast further doubt over at least one of those plants.
Mr. Coleman said the four companies he is talking with are still intent on moving ahead in B.C., and the negotiations on how those facilities would be powered are expected to be concluded in the new couple of months. While most industries in B.C. can count on being served by B.C. Hydro on demand, the LNG sector has been singled out because it would require significant investments by B.C. Hydro in new capacity and transmission lines.
By giving B.C. Hydro until next July to figure out what its industrial demands will look like, it means the next call for private power contracts will likely be delayed until the winter of 2014.