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Criticism of BC Hydro fixed price conditions
1 September 2007
A program of standard offer purchase (SOP) contracts for wind power proposed by the British Columbian utility, BC Hydro, will not help the development of viable small wind projects in the province, says the Canadian Wind Energy Association (CanWEA). "We would expect very few, if any, wind energy projects to participate in the program as proposed, and would expect a high attrition rate among any projects that actually do attempt to participate in the program." The primary reason for the industry's lack of enthusiasm is price. The utility is proposing a base price that ranges from C$65/MWh to C$79/MWh, depending on where the project is located in the province, with a additional payment of C$3.05/MWh for projects that receive Canada's EcoLogo or other environmental certification. But that is just too low, says CanWEA. The prices are based on bids received in the small-scale project stream of BC Hydro's 2006 call for tenders. "These projects, which included 20 hydro and two waste heat projects, do not reflect an accurate price for small wind projects," says CanWEA. The utility's plan to adjust prices according to the time of day and month when the energy is delivered unnecessarily introduces "uncertainty and complication," says CanWEA. "This approach is also inconsistent with the approaches taken in virtually every other jurisdiction with standard offer programs. In the vast majority of cases, the SOP price is set independent of time of year and time of delivery in the interests of maintaining certainty and simplicity in the program."
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