With British Columbia’s soon-to-govern NDP-Green Party coalition poised to send the province’s controversial Site C hydroelectric project to review, many opponents of this hydro expansion are asking why BC cannot develop geothermal energy instead.
Last week, the Supreme Court of Canada said it would not hear appeals from the Prophet River and West Moberly First Nations challenging the third dam on the Peace River in northeastern BC.
BC Hydro said that with the Supreme Court’s decision, all legal challenges brought against the $8.8 billion project have now either been dismissed or discontinued.
In June, Saskatchewan gave the green light to what could be that province’s first geothermal plant, a pilot project that is part of SaskPower’s plan to deliver 50 percent of its electricity from renewable sources by 2030.
But geothermal resources in the prairie province are tiny compared to the potential of the sector in BC. A 2015 study from Geoscience BC, an independent non-profit earth science organisation, identified 11 potential sites that together could deliver eight percent of the province’s annual electricity demand, or roughly 5 terawatt-hours (TWh) annually. So opponents of Site C regularly ask why BC cannot develop geothermal instead of hydro, given that Site C is tipped to deliver 5.1 TWh per year.
This week, the PICS flagship 2060 Project: Integrated Energy Pathways for British Columbia and Canada issued a briefing note seeking to answer that question.
The key challenge is uncertainty. We have a good idea of where hot aquifers might be located, but we aren’t sure. The 11 potential sites are described as ‘P50’, terminology that means that there is a 50/50 chance that the installed capacity will be less (or greater) than projected. So geothermal developers have to drill exploration wells, at a cost of $1 million a pop on average, and then confirmation wells, which cost $4-6 million. This means that as much as half of the cost of development is incurred before anyone knows what the true value of the resource at a particular site will be.
This sort of uncertainty makes investors nervous. Those regions that have extensively developed geothermal such as Iceland overcome this obstacle by reimbursing a proportion of drilling costs or boosting electricity sales revenue via tax credits.
On top of this, the best geothermal sites tend to be found in remote locations, which means additional transmission costs. Once these are factored in, the cost of the electricity generated in BC exceeds the $110 per megawatt-hour maximum that BC Hydro is willing to pay for independent renewable electricity providers, and ranges from $117/MWh at the high-temperature volcanic sites to $398/MWh at medium-temperature sites.
So the existing policy support for renewable energy is currently insufficient to help out development of geothermal. But should better policy instruments be introduced? To help answer this question, the researchers are currently engaged in a comprehensive mapping and economic assessment of geothermal resources in the northeast of the province. Results are in and currently being reviewed, with release expected early next year.
Energy economist Mark Jaccard helped design BC’s carbon tax, and he still supports it. But he questions just how politically viable a stringent tax—at the level needed to meet climate targets—can really be. So he also continues to explore how other policies that the public find more acceptable could work.