Little Hawk
Active Member
My colleague Rafe sent me this and I urge each of you who may want to read/learn more about the horrendous Campbell Govt's IPP sham to grab another coffee and take a few minutes to read the hard and truthful answers to the questions facing British Columbians' about the future of energy supply in our Province.
This is not baffle-gab but hard truths from a man imminently qualified to head-up the critical planning phase of hydro-electric projects vs. a Government ill-equipped to be making decisions about our fish-bearing streams and future energy costs to British Columbian's.
RAFE HERE.
BELOW IS A VERY, VERY IMPORTANT DOCUMENT (IN PART) WHICH I URGE YOU TO READ AND PASS ON. WHAT'S ON THIS PAGE IS A PARTIAL EXTRACTION SO TO ENSURE NO ONE THINKS i'M QUOTING OUT OF CONTEXT, I'VE ATTACHED THE ENTIRE PRESENTATION,
Ray Pillman's presentation (on behalf of the Outdoor Recreation Council) to the Ministry of Energy, Mines & Petroleum Resources on Green Energy. His entire career as an engineer involved hydroelectric projects throughout the world. He lives in West Van. Here is his short bio ...
My presentation is on behalf of the Outdoor Recreation Council of B.C. My professional career was devoted largely to the planning, design, construction and commissioning of electric utility systems and projects. I had principal responsibility for projects for the BC Power Commission (now BC Hydro), Ontario Hydro, Hydro Quebec and Manitoba Hydro, as well as for investor owned systems, and internationally in Central and South America, Africa, Pakistan, India, Thailand, Laos, Bangladesh, and Taiwan
Partial quotation
Now the question: who is going to do the planning?
The IPPs can't do it. They are dealing with their own specific projects, not the system as a whole.
What about the government? Planning a provincial electric energy supply system and its projects is not just a task of fitting pieces of a puzzle together, and solving conflicts. It involves dealing with a vast amount of geological, hydrological, climate and engineering information, data and analysis as well as economics and finance and requires the organizing and supervising of experts in all these fields working together as a team on a continuing basis. Governments are not set up to do this well. Furthermore governments, of whatever stripe, are hampered by short term political wishes which clash with long term planning. Governments can set general objectives but are not well suited to doing the planning.
What about a diverse team such as met at the SFU symposium? They would have an interest and the ability to provide important input in fields, in which some have world class and unique expertise. They could possibly represent the public interest. They have fragments of the expertise required, but they don't have the proven leadership and track record nor the team cohesion and probably not the large team management skills required. They could serve as plan reviewers, but such a team could not take on the planning. This needs to be done by an integrated organization that has the breadth, depth and authority to cover all aspects of the planning task.
The only organization that has the necessary breadth and depth is BC Hydro. They may assign some parts of the work to consultants but they are practiced at keeping the overall task under their control. They need, of course, to consult the public widely and wisely and through adequate liaison keep the government, but also the public, informed on their plans and planning. BC Hydro had this responsibility not too long ago, so it would not be a new responsibility for them.
7. At the SFU symposium the panel on which I was a participant was asked to propose answers to the question: what would be a reasonable way of proceeding to develop additions to BC's electricity supply that are renewable and as green as possible, while keeping costs as low as possible? My answer was:
First, place planning squarely in the hands of BC Hydro with the instruction that on a continuing basis it develop and update plans to provide BC customers with energy developed from renewable sources to the extent possible and that the additions be as green as possible while keeping costs to consumers as low as reasonably possible.
Then, require that Hydro through their planning produce a list of planned and costed projects and groups of projects that could be added to the system in stages to provide the necessary energy and capacity; include in this list only projects that are renewable and as green as possible; for comparison purposes list also groups of projects that would be logical choices for technical and cost reasons but which would not meet the test of being green and further groups of projects that are neither green nor based on renewable resources; then calculate the premiums that would have to be paid for selecting the greenest renewable options; make these premiums known to the consumers, and the public; then choose for development the greenest renewable feasible options, subject of course to the approval of the BCUC.
Through the transparency that this approach would provide consumers would know and take pride in what they are paying for rather than have this hidden in energy rates along with costs incurred due to lack of proper planning, high borrowing costs and suspected windfall profits. The overall result would be energy supply additions that would be renewable, as green as possible, at the lowest reasonable cost.
8. Question: Is there such a thing as a green electric generation project?
RoR hydro and wind power projects meet the requirement that they be based on renewable energy sources but they meet the greenness standard only partially and in many cases not at all well. All hydro projects have negative environmental, economic and social impacts as well as producing substantial GHG emissions during their construction phases. For those that require extensive transmission lines the impact is never ending. As well as releasing stored carbons clearing rights-of-way of trees and keeping them cleared removes in perpetuity the service that these trees provide in extracting CO2 from the atmosphere and storing it in their living trunks, their branches and their roots and in very significant amounts in the soil. This is a double whammy against efforts to reduce GHGs. The amounts of these impacts can be calculated and estimated with reasonable accuracy.
In his presentation entitled "Aquatic Ecosystem Impacts of River Diversion for Hydro Power" to the SFU- hosted Green Energy symposium on November 3-4, 2009 Jack Stanford, Professor of Ecology at the University of Montana, explained how changes in the natural flow regime on any reach of a stream impacts the aquatic ecosystem in that reach and in downstream reaches. This occurs because the aquatic flora and fauna that has adapted successfully to the natural regime over thousands of years cannot quickly adapt to the changes. His studies into a variety of streams, which included tributaries of the Skeena, have shown that impacts have been quite severe and more severe than generally expected. So, there is no such thing as a really green hydro project. There can only be greater and lesser impacts, which planners should be able predict with some measure of reliability based on experience from case studies.
9. Question: How do IPP projects compare with similar projects that BC Hydro could build?
a) Cost: The cost of developing IPP-owned facilities will be considerably higher than the cost of developing government-owned facilities. The reasons for this is are:
Government-owned utilities can borrow the massive funds required at lower interest rates than private developers can. Over the long payout period (40 years and more) this difference becomes very large. This is a prime reason why most electric power utilities in Canada and in much of the world are state owned.
Another reason: Due to the large number of bidders responding to BC Hydro's call for additional energy supply the probability of a bidder being awarded a contract is low. In this circumstance the bidders cannot afford to undertake all the site investigations, especially subsurface investigations, required to produce finite designs on which cost estimates can be made with confidence. To cover the risk of being faced with their worst-case construction difficulties scenario they must add substantial contingencies to the estimates on which they base their cost of the energy that they would deliver to BC Hydro. If their worst case transpires their costs will be covered. If it does not they reap a welcome extra profit, which can be substantial. In contrast, if BC Hydro were developing the same project it would have in its planning process selected the most promising projects and would be able to undertake the site investigations with a much higher degree of confidence that the projects will be built.
It is very hard to make a case for privately owned power development on a cost effectiveness basis. Having private developers rather than a state-owned enterprise assume development risk has been used as an argument for private development. For this to function private developers would have to be willing to suffer losses on a project after project basis, which is unrealistic. To survive they must recoup their losses by making up what they lost and more on the next project. Ultimately the risk is passed on to and paid for by the energy consumers in the rates that they are charged.
Examples: Comparing the cost of a privately financed project at an interest rate of 7% on a 40-year payback period over what it would cost a Crown corporation at an interest rate of 5% the difference would be 28.28%; on an 8% vs 5% interest rate difference the privately financed project would cost 43.18% more. Add to these the additional contingency allowances mentioned above that private developers would have to add to the cost on which they base the selling price of energy to BC Hydro these differences will total in the neighbourhood of 40% and 55% or more. Note that interest rate differences were recognized in the discussions between BCUC and BC Hydro re Hydro's 2008 LTAP, wherein they agreed that for planning purposes Hydro could use a borrowing rate of 4.6% for its own projects and 8% for those of some of its energy suppliers. These are inescapable differences, which should not be ignored.
b) Supply and Demand: While there are some, mostly small, IPP proposed RoR sites on rivers and streams fed by winter rains that would produce much of their output in late fall and winter, when it is most needed in BC, most of the larger RoR projects that have been staked and are being prepared for approval are based on rivers that receive much of their annual flows from glacier and snow melt and would produce most of their energy output in the late spring and early summer when the BC demand is low. The logical markets for these projects is not BC but the southwestern US states where the demand for electricity in the summer months is high. However, these markets are many expensive and environmentally challenging transmission line miles away.
c) System Fit: As the energy that can be produced by RoR and Wind projects will be largely seasonal and/or intermittent careful juggling to fit these into the system will be required and the contribution of these supplies will not be as great and as effective as they would be if BC Hydro would be selecting projects based on their own planning. This would especially be the case for the larger IPP projects.
d) Enforcement of environmental standards: Design/build contracts proposed by most IPP proponents would make enforcement of environmental standards difficult, because the contractor would control the working site and as a sub-contractor the project designer would report to the contractor. Having turned over the project to the contractor to complete for a fixed price the proponent also would have little control over the construction phase.
e) Project Failure: If an IPP proponent should fail to complete a project due to design or construction problems or due to financial problems who would complete the project or return the site to its natural condition, and who would bear the cost? BC Hydro? Taxpayers?
f ) Emergency Back Up: As an emergency backup Burrard Thermal would be operated infrequently for short periods and would contribute little in GHGs. Replacing this 900 MW backup with RoR and Wind Power that would produce an equal small total amount of energy for emergencies would be exceedingly expensive.
g) Concern: If IPPs become, in time, major suppliers to BC Hydro there would inevitably be consolidations and they could use their essential status to force BC Hydro to pay for the energy they supply at rates approaching what they could get by exporting to the lucrative US market. While private utilities may generally act honourably they are profit driven. As an example Alcan succeeded in selling energy from Kemano, made surplus by reduction of requirements at its aluminum smelter, to BC Hydro at rates far above its cost of production. In a much more glaring recent example ENRON blacked out California for a time by deliberately shutting down many generating units "for maintenance" in pursuit of its nefarious objectives.
h) Export of Electric Energy: Whether the damage to BC's environment, its rivers, its lands, its wildlife, its tourism industry and outdoor recreation and the increased production of GHG emissions during construction and in perpetuity that this would entail would be justified by the short term employment benefits is a question that should, if contemplated, be a subject of thorough independent analysis and public debate. The benefits of exports would accrue largely to investors in the larger projects and would not be retained or spent in BC.
"Some could care less if there's any fish left for our kids!"
This is not baffle-gab but hard truths from a man imminently qualified to head-up the critical planning phase of hydro-electric projects vs. a Government ill-equipped to be making decisions about our fish-bearing streams and future energy costs to British Columbian's.
RAFE HERE.
BELOW IS A VERY, VERY IMPORTANT DOCUMENT (IN PART) WHICH I URGE YOU TO READ AND PASS ON. WHAT'S ON THIS PAGE IS A PARTIAL EXTRACTION SO TO ENSURE NO ONE THINKS i'M QUOTING OUT OF CONTEXT, I'VE ATTACHED THE ENTIRE PRESENTATION,
Ray Pillman's presentation (on behalf of the Outdoor Recreation Council) to the Ministry of Energy, Mines & Petroleum Resources on Green Energy. His entire career as an engineer involved hydroelectric projects throughout the world. He lives in West Van. Here is his short bio ...
My presentation is on behalf of the Outdoor Recreation Council of B.C. My professional career was devoted largely to the planning, design, construction and commissioning of electric utility systems and projects. I had principal responsibility for projects for the BC Power Commission (now BC Hydro), Ontario Hydro, Hydro Quebec and Manitoba Hydro, as well as for investor owned systems, and internationally in Central and South America, Africa, Pakistan, India, Thailand, Laos, Bangladesh, and Taiwan
Partial quotation
Now the question: who is going to do the planning?
The IPPs can't do it. They are dealing with their own specific projects, not the system as a whole.
What about the government? Planning a provincial electric energy supply system and its projects is not just a task of fitting pieces of a puzzle together, and solving conflicts. It involves dealing with a vast amount of geological, hydrological, climate and engineering information, data and analysis as well as economics and finance and requires the organizing and supervising of experts in all these fields working together as a team on a continuing basis. Governments are not set up to do this well. Furthermore governments, of whatever stripe, are hampered by short term political wishes which clash with long term planning. Governments can set general objectives but are not well suited to doing the planning.
What about a diverse team such as met at the SFU symposium? They would have an interest and the ability to provide important input in fields, in which some have world class and unique expertise. They could possibly represent the public interest. They have fragments of the expertise required, but they don't have the proven leadership and track record nor the team cohesion and probably not the large team management skills required. They could serve as plan reviewers, but such a team could not take on the planning. This needs to be done by an integrated organization that has the breadth, depth and authority to cover all aspects of the planning task.
The only organization that has the necessary breadth and depth is BC Hydro. They may assign some parts of the work to consultants but they are practiced at keeping the overall task under their control. They need, of course, to consult the public widely and wisely and through adequate liaison keep the government, but also the public, informed on their plans and planning. BC Hydro had this responsibility not too long ago, so it would not be a new responsibility for them.
7. At the SFU symposium the panel on which I was a participant was asked to propose answers to the question: what would be a reasonable way of proceeding to develop additions to BC's electricity supply that are renewable and as green as possible, while keeping costs as low as possible? My answer was:
First, place planning squarely in the hands of BC Hydro with the instruction that on a continuing basis it develop and update plans to provide BC customers with energy developed from renewable sources to the extent possible and that the additions be as green as possible while keeping costs to consumers as low as reasonably possible.
Then, require that Hydro through their planning produce a list of planned and costed projects and groups of projects that could be added to the system in stages to provide the necessary energy and capacity; include in this list only projects that are renewable and as green as possible; for comparison purposes list also groups of projects that would be logical choices for technical and cost reasons but which would not meet the test of being green and further groups of projects that are neither green nor based on renewable resources; then calculate the premiums that would have to be paid for selecting the greenest renewable options; make these premiums known to the consumers, and the public; then choose for development the greenest renewable feasible options, subject of course to the approval of the BCUC.
Through the transparency that this approach would provide consumers would know and take pride in what they are paying for rather than have this hidden in energy rates along with costs incurred due to lack of proper planning, high borrowing costs and suspected windfall profits. The overall result would be energy supply additions that would be renewable, as green as possible, at the lowest reasonable cost.
8. Question: Is there such a thing as a green electric generation project?
RoR hydro and wind power projects meet the requirement that they be based on renewable energy sources but they meet the greenness standard only partially and in many cases not at all well. All hydro projects have negative environmental, economic and social impacts as well as producing substantial GHG emissions during their construction phases. For those that require extensive transmission lines the impact is never ending. As well as releasing stored carbons clearing rights-of-way of trees and keeping them cleared removes in perpetuity the service that these trees provide in extracting CO2 from the atmosphere and storing it in their living trunks, their branches and their roots and in very significant amounts in the soil. This is a double whammy against efforts to reduce GHGs. The amounts of these impacts can be calculated and estimated with reasonable accuracy.
In his presentation entitled "Aquatic Ecosystem Impacts of River Diversion for Hydro Power" to the SFU- hosted Green Energy symposium on November 3-4, 2009 Jack Stanford, Professor of Ecology at the University of Montana, explained how changes in the natural flow regime on any reach of a stream impacts the aquatic ecosystem in that reach and in downstream reaches. This occurs because the aquatic flora and fauna that has adapted successfully to the natural regime over thousands of years cannot quickly adapt to the changes. His studies into a variety of streams, which included tributaries of the Skeena, have shown that impacts have been quite severe and more severe than generally expected. So, there is no such thing as a really green hydro project. There can only be greater and lesser impacts, which planners should be able predict with some measure of reliability based on experience from case studies.
9. Question: How do IPP projects compare with similar projects that BC Hydro could build?
a) Cost: The cost of developing IPP-owned facilities will be considerably higher than the cost of developing government-owned facilities. The reasons for this is are:
Government-owned utilities can borrow the massive funds required at lower interest rates than private developers can. Over the long payout period (40 years and more) this difference becomes very large. This is a prime reason why most electric power utilities in Canada and in much of the world are state owned.
Another reason: Due to the large number of bidders responding to BC Hydro's call for additional energy supply the probability of a bidder being awarded a contract is low. In this circumstance the bidders cannot afford to undertake all the site investigations, especially subsurface investigations, required to produce finite designs on which cost estimates can be made with confidence. To cover the risk of being faced with their worst-case construction difficulties scenario they must add substantial contingencies to the estimates on which they base their cost of the energy that they would deliver to BC Hydro. If their worst case transpires their costs will be covered. If it does not they reap a welcome extra profit, which can be substantial. In contrast, if BC Hydro were developing the same project it would have in its planning process selected the most promising projects and would be able to undertake the site investigations with a much higher degree of confidence that the projects will be built.
It is very hard to make a case for privately owned power development on a cost effectiveness basis. Having private developers rather than a state-owned enterprise assume development risk has been used as an argument for private development. For this to function private developers would have to be willing to suffer losses on a project after project basis, which is unrealistic. To survive they must recoup their losses by making up what they lost and more on the next project. Ultimately the risk is passed on to and paid for by the energy consumers in the rates that they are charged.
Examples: Comparing the cost of a privately financed project at an interest rate of 7% on a 40-year payback period over what it would cost a Crown corporation at an interest rate of 5% the difference would be 28.28%; on an 8% vs 5% interest rate difference the privately financed project would cost 43.18% more. Add to these the additional contingency allowances mentioned above that private developers would have to add to the cost on which they base the selling price of energy to BC Hydro these differences will total in the neighbourhood of 40% and 55% or more. Note that interest rate differences were recognized in the discussions between BCUC and BC Hydro re Hydro's 2008 LTAP, wherein they agreed that for planning purposes Hydro could use a borrowing rate of 4.6% for its own projects and 8% for those of some of its energy suppliers. These are inescapable differences, which should not be ignored.
b) Supply and Demand: While there are some, mostly small, IPP proposed RoR sites on rivers and streams fed by winter rains that would produce much of their output in late fall and winter, when it is most needed in BC, most of the larger RoR projects that have been staked and are being prepared for approval are based on rivers that receive much of their annual flows from glacier and snow melt and would produce most of their energy output in the late spring and early summer when the BC demand is low. The logical markets for these projects is not BC but the southwestern US states where the demand for electricity in the summer months is high. However, these markets are many expensive and environmentally challenging transmission line miles away.
c) System Fit: As the energy that can be produced by RoR and Wind projects will be largely seasonal and/or intermittent careful juggling to fit these into the system will be required and the contribution of these supplies will not be as great and as effective as they would be if BC Hydro would be selecting projects based on their own planning. This would especially be the case for the larger IPP projects.
d) Enforcement of environmental standards: Design/build contracts proposed by most IPP proponents would make enforcement of environmental standards difficult, because the contractor would control the working site and as a sub-contractor the project designer would report to the contractor. Having turned over the project to the contractor to complete for a fixed price the proponent also would have little control over the construction phase.
e) Project Failure: If an IPP proponent should fail to complete a project due to design or construction problems or due to financial problems who would complete the project or return the site to its natural condition, and who would bear the cost? BC Hydro? Taxpayers?
f ) Emergency Back Up: As an emergency backup Burrard Thermal would be operated infrequently for short periods and would contribute little in GHGs. Replacing this 900 MW backup with RoR and Wind Power that would produce an equal small total amount of energy for emergencies would be exceedingly expensive.
g) Concern: If IPPs become, in time, major suppliers to BC Hydro there would inevitably be consolidations and they could use their essential status to force BC Hydro to pay for the energy they supply at rates approaching what they could get by exporting to the lucrative US market. While private utilities may generally act honourably they are profit driven. As an example Alcan succeeded in selling energy from Kemano, made surplus by reduction of requirements at its aluminum smelter, to BC Hydro at rates far above its cost of production. In a much more glaring recent example ENRON blacked out California for a time by deliberately shutting down many generating units "for maintenance" in pursuit of its nefarious objectives.
h) Export of Electric Energy: Whether the damage to BC's environment, its rivers, its lands, its wildlife, its tourism industry and outdoor recreation and the increased production of GHG emissions during construction and in perpetuity that this would entail would be justified by the short term employment benefits is a question that should, if contemplated, be a subject of thorough independent analysis and public debate. The benefits of exports would accrue largely to investors in the larger projects and would not be retained or spent in BC.
"Some could care less if there's any fish left for our kids!"
