“As you know, the Peace is a very important area for B.C. Hydro,” he told the Chamber of Commerce luncheon on Tuesday. “It’s a huge part of our system. In British Columbia we have the two rivers that we rely on – the Peace and the Columbia – as far as a major part of our electrical generation.”
Reid believes that LNG could be a game changer for the energy industry, admitting Hydro doesn’t yet know what role it will play, but expects it will be a significant one. He explains that while LNG plants around the world are powered by natural gas, those in B.C. will have the option of using electricity to power some of their operations.
“That could be a very interesting option for LNG proponents because it allows them to be just a little bit greener, a little less [Greenhouse Gas] emissions, it’s a positive story they can tell, it’s good for gas, it’s good for them. I think certainly a number of them are interested in that, and we have the supply. We can supply that. We’ve got the power.”
Reid says Hydro is reportedly situated well for the next six to eight years, or until Site C potentially comes into play. As for that project, which is currently undergoing an Environmental Assessment, Reid argues the dam is a “tremendous opportunity” for growth in the province.
“As a nation we’ve got this hydroelectric advantage here: a clean, renewable, power,” he maintains. “We get caught up in labels, but to me it’s just another asset to the system that we’re going to need, particularly on the capacity side of the energy equation; we’re definitely going to need a Site C.”
He adds that all the other forms of power are going to be needed as well, including wind, thermal and solar, and that Hydro isn’t trying to force one option over another.
While “new power” is more expensive that “old power”, Reid maintains that in the long-run the costs cost goes down. He points to the example of the WAC Bennett Dam as seeming “outrageously expensive” upfront, but is now appreciated.
He also argues that while natural gas plants have less of an upfront cost, there are multiple reasons while hydroelectricity is a better option.
“There’s no doubt that upfront initially your upfront costs of that are less expensive… but you do have to replace those plants a lot more quickly than you do with big hydroelectric systems,” he says. “In addition to that, you’re subject to commodity price risk on natural gas. From my perspective, long-term planning, generational planning, that’s what we have to focus on.”
Of course, it all comes at a cost, and the challenge for the company will be how that cost is shared among generations of ratepayers.