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Power-to-gas converts surplus renewable electricity into green hydrogen or synthetic methane via electrolysis and methanation, enabling seasonal energy storage, grid balancing, hydrogen injection into gas pipelines, and decarbonization of heat, transport, and industry.

Key Points

Power-to-gas turns excess renewable power into hydrogen or methane for storage, grid support, and clean fuel.

✅ Enables hydrogen injection into existing natural gas networks

✅ Balances grids and provides seasonal energy storage capacity

✅ Supplies low-carbon fuels for industry, heat, and heavy transport

Last month Denmark’s biggest energy firm, Ørsted, said wind farms it is proposing for the North Sea will convert some of their excess power into gas. Electricity flowing in from offshore will feed on-shore electrolysis plants that split water to produce clean-burning hydrogen, with oxygen as a by-product. That would supply a new set of customers who need energy, but not as electricity. And it would take some strain off of Europe’s power grid as it grapples with an ever-increasing share of hard-to-handle EU wind and solar output on the grid.

Turning clean electricity into energetic gases such as hydrogen or methane is an old idea that is making a comeback as renewable power generation surges and crowds out gas in Europe. That is because gases can be stockpiled within the natural gas distribution system to cover times of weak winds and sunlight. They can also provide concentrated energy to replace fossil fuels for vehicles and industries. Although many U.S. energy experts argue that this “power-to-gas” vision may be prohibitively expensive, some of Europe’s biggest industrial firms are buying in to the idea.

European power equipment manufacturers, anticipating a wave of renewable hydrogen projects such as Ørsted’s, vowed in January that, as countries push for hydrogen-ready power plants across Europe, all of their gas-fired turbines will be certified by next year to run on up to 20 percent hydrogen, which burns faster than methane-rich natural gas. The natural gas distributors, meanwhile, have said they will use hydrogen to help them fully de-carbonize Europe’s gas supplies by 2050.

Converting power to gas is picking up steam in Europe because the region has more consistent and aggressive climate policies and evolving electricity pricing frameworks that support integration. Most U.S. states have goals to clean up some fraction of their electricity supply; coal- and gas-fired plants contribute a little more than a quarter of U.S. greenhouse gas emissions. In contrast, European countries are counting on carbon reductions of 80 percent or more by midcentury—reductions that will require an economywide switch to low-carbon energy.

Cleaning up energy by stripping the carbon out of fossil fuels is costly. So is building massive new grid infrastructure, including transmission lines and huge batteries, amid persistent grid expansion woes in parts of Europe. Power-to-gas may be the cheapest way forward, complementing Germany’s net-zero roadmap to cut electricity costs by a third. “In order to reach the targets for climate protection, we need even more renewable energy. Green hydrogen is perceived as one of the most promising ways to make the energy transition happen,” says Armin Schnettler, head of energy and electronics research at Munich-based electric equipment giant Siemens.

Europe already has more than 45 demonstration projects to improve power-to-gas technologies and their integration with power grids and gas networks. The principal focus has been to make the electrolyzers that convert electricity to hydrogen more efficient, longer-lasting and cheaper to produce.

The projects are also scaling up the various technologies. Early installations converted a few hundred kilowatts of electricity, but manufacturers such as Siemens are now building equipment that can convert 10 megawatts, which would yield enough hydrogen each year to heat around 3,000 homes or fuel 100 buses, according to financial consultancy Ernst & Young.

The improvements have been most dramatic for proton-exchange membrane electrolyzers, which are akin to the fuel cells used in hydrogen vehicles (but optimized to produce hydrogen rather than consume it). The price of proton-exchange electrolyzers has dropped by roughly 40 percent during the past decade, according to a study published in February in Nature Energy. They are also five times more compact than older alkaline electrolysis plants, enabling onsite hydrogen production near gas consumers, and they can vary their power consumption within seconds to operate on fluctuating wind and solar generation.

Many European pilot projects are demonstrating “methanation” equipment that converts hydrogen to methane, too, which can be used as a drop-in replacement for natural gas. Europe’s electrolyzer plants, however, are showing that methanation is not as critical to the power-to-gas vision as advocates long believed. Many electrolyzers are injecting their hydrogen directly into natural gas pipelines—something that U.S. gas firms forbid—and they are doing so without impacting either the gas infrastructure or natural gas consumers.

Europe’s first large-scale hydrogen injection began in eastern Germany in 2013 at a two-megawatt electrolyzer installed by Essen-based power firm E.ON. Germany has since ratcheted up the amount of hydrogen it allows in natural gas lines from an initial 2 percent by volume to 10 percent, in a market where renewables now outpace coal and nuclear in Germany, and other European states have followed suit with their own hydrogen allowances. Christopher Hebling, head of hydrogen technologies at the Freiburg-based Fraunhofer Institute for Solar Energy Systems, predicts that such limits will rise to the 20-percent level anticipated by Europe’s turbine manufacturers.

Moving renewable hydrogen and methane via natural gas pipelines promises to cut the cost of switching to renewable energy. For example, gas networks have storage caverns whose reserves could be tapped to run gas-fired electric generation power plants during periods of low wind and solar output. Hebling notes that Germany’s gas network can store 240 terawatt-hours of energy—roughly 25 times more energy than global power grids can presently store by pumping water uphill to refill hydropower reservoirs. Repurposing gas infrastructure to help the power system could save European consumers 138 billion euros ($156 billion) by 2050, according to Dutch energy consultancy Navigant (formerly Ecofys).

For all the pilot plants and promise, renewable hydrogen presently supplies a tiny fraction of Europe’s gas. And, globally, around 4 percent of hydrogen is supplied via electrolysis, with the bulk refined from fossil fuels, according to the International Renewable Energy Agency.

Power-to-gas is catching up, however. According to the February Nature Energy study, renewable hydrogen already pays for itself in some niche applications, and further electrolyzer improvements will progressively extend its market. “If costs continue to decline as they have done in recent years, power-to-gas will become competitive at large scale within the next decade,” says study co-author Gunther Glenk, an economist at the Technical University of Munich.

Glenk says power-to-gas could scale up faster if governments guaranteed premium prices for renewable hydrogen and methane, as they did to mainstream solar and wind power.

Tim Calver, an energy storage researcher turned consultant and Ernst & Young’s executive director in London, agrees that European governments need to step up their support for power-to-gas projects and markets. Calver calls the scale of funding to date, “not proportionate to the challenge that we face on long-term decarbonization and the potential role of hydrogen.”

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BC Hydro Grid Modernization accelerates clean energy and electrification, upgrading transmission lines, substations, and hydro dams to deliver renewable power for EVs and heat pumps, strengthen grid reliability, and enable industrial decarbonization in British Columbia.

Key Points

A $36B, 10-year plan to expand and upgrade B.C.'s clean grid for electrification, reliability, and industrial growth.

✅ $36B for lines, substations, and hydro dam upgrades

✅ Enables EV charging, heat pumps, and smart demand response

✅ Prioritizes industrial electrification and Indigenous partnerships

In a significant move towards a clean energy transition, British Columbia has announced a substantial $36-billion investment to enlarge and upgrade its electricity grid over the next ten years. The announcement last Tuesday from BC Hydro indicates a substantial 50 percent increase from its prior capital plan. A major portion of this investment is directed towards new consumer connections and improving current infrastructure, including substations, transmission lines, and hydro dams for more efficient power generation.

The catalyst behind this major investment is the escalating demand for clean energy across residential, commercial, and industrial sectors in British Columbia. Projections show a 15 percent rise in electricity demand by 2030. According to the Canadian Climate Institute's models, achieving Canada’s climate goals will require extensive electrification across various sectors, raising questions about a net-zero grid by 2050 nationwide.

BC Hydro is planning substantial upgrades to the electrical grid to meet the needs of a growing population, decreasing industry carbon emissions, and the shift towards clean technology. This is vital, especially as the province works towards improving housing affordability and as households face escalating costs from the impacts of climate change and increasing exposure to harsh weather events. Affordable, reliable power and access to clean technologies such as electric vehicles and heat pumps are becoming increasingly important for households.

British Columbia is witnessing a significant shift from fossil fuels to clean electricity in powering homes, vehicles, and workplaces. Electric vehicle usage in B.C. has increased twentyfold in the past six years. Last year, one in every five new light-duty passenger vehicles sold in B.C. was electric – the highest rate in Canada. Additionally, over 200,000 B.C. homes are now equipped with heat pumps, indicating a growing preference for the province’s 98 percent renewable electricity.

The investment also targets reducing industrial emissions and attracting industrial investment. For instance, the demand for transmission along the North Coastline, from Prince George to Terrace, is expected to double this decade, especially from sectors like mining. Mining companies are increasingly looking for locations with access to clean power to reduce their carbon footprint.

This grid enhancement plan in B.C. is reflective of similar initiatives in provinces like Quebec and the legacy of Manitoba hydro history in building provincial systems. Hydro-Québec announced a substantial $155 to $185 billion investment in its 2035 Action Plan last year, aimed at supporting decarbonization and economic growth. By 2050, Hydro-Québec predicts a doubling of electricity demand in the province.

Both utilities’ strategies focus on constructing new facilities and enhancing existing assets, like upgrading dams and transmission lines. Hydro-Québec, for instance, includes energy efficiency goals in its plan to double customer savings and potentially save over 3,500 megawatts of power.

However, with this level of investment, provinces need to engage in dialogue about priorities and the optimal use of clean electricity resources, with concepts like macrogrids offering potential benefits. Quebec, for instance, has shifted from a first-come, first-served basis to a strategic review process for significant new industrial power requests.

B.C. is also moving towards strategic prioritization in its energy strategy, evident in its recent moratorium on new connections for virtual currency mining due to their high energy consumption.

Indigenous partnership and leadership are also key in this massive grid expansion. B.C.’s forthcoming Call for Power and Quebec’s financial partnerships with Indigenous communities indicate a commitment to collaborative approaches. British Columbia has also allocated $140 million to support Indigenous-led power projects.

Regarding the rest of Canada, electricity planning varies in provinces with deregulated markets like Ontario and Alberta. However, these provinces are adapting too, and the federal government has funded an Atlantic grid study to improve regional planning efforts. Ontario, for example, has provided clear guidance to its system operator, mirroring the ambition in B.C. and Quebec.

Utilities are rapidly working to not only expand and modernize energy grids but also to make them more resilient, affordable, and smarter, as demonstrated by recent California grid upgrades funding announcements across the sector. Hydro-Québec focuses on grid reliability and affordability, while B.C. experiments with smart-grid technologies.

Both Ontario and B.C. have programs encouraging consumers to reduce consumption in real-time, demonstrating the potential of demand-side management. A recent instance in Alberta showed how customer participation could prevent rolling blackouts by reducing demand by 150 megawatts.

This is a crucial time for all Canadian provinces to develop larger, smarter energy grids, including a coordinated western Canadian electricity grid approach for a sustainable future. Utilities are making significant strides towards this goal.
 

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OPG Small Modular Reactors advance clean energy with advanced nuclear, baseload power, renewables integration, and grid reliability; factory built, scalable, and cost effective to support Ontario energy security and net zero goals.

Key Points

Factory built nuclear units delivering reliable, low carbon power to support Ontario's grid, renewables, climate goals.

✅ Factory built modules cut costs and shorten schedules

✅ Provides baseload power to balance wind and solar

✅ Enhances grid reliability with advanced safety and waste reduction

Ontario Power Generation (OPG) is at the forefront of Canada’s energy transformation, demonstrating a robust commitment to sustainable energy solutions. One of the most promising avenues under exploration is the development of Small Modular Reactors (SMRs), as OPG broke ground on the first SMR at Darlington to launch this next phase. These innovative technologies represent a significant leap forward in the quest for reliable, clean, and cost-effective energy generation, aligning with Ontario’s ambitious climate goals and energy security needs.

Understanding Small Modular Reactors

Small Modular Reactors are advanced nuclear power plants that are designed to be smaller in size and capacity compared to traditional nuclear reactors. Typically generating up to 300 megawatts of electricity, SMRs can be constructed in factories and transported to their installation sites, offering flexibility and scalability that larger reactors do not provide. This modular approach reduces construction time and costs, making them an appealing option for meeting energy demands.

One of the key advantages of SMRs is their ability to provide baseload power—energy that is consistently available—while simultaneously supporting intermittent renewable sources like wind and solar. As Ontario continues to increase its reliance on renewables, SMRs could play a crucial role in ensuring that the energy supply remains stable and secure.

OPG’s Initiative

In its commitment to advancing clean energy technologies, OPG has been a strong advocate for the adoption of SMRs. The province of Ontario has announced plans to develop three additional small modular reactors, part of its plans for four Darlington SMRs that would further enhance the region’s energy portfolio. This initiative aligns with both provincial and federal climate objectives, and reflects a collaborative provincial push on nuclear innovation to accelerate clean energy.

The deployment of SMRs in Ontario is particularly strategic, given the province’s existing nuclear infrastructure, including the continued operation of Pickering NGS that supports grid reliability. OPG operates a significant portion of Ontario’s nuclear fleet, and leveraging this existing expertise can facilitate the integration of SMRs into the energy mix. By building on established operational frameworks, OPG can ensure that new reactors are deployed safely and efficiently.

Economic and Environmental Benefits

The introduction of SMRs is expected to bring substantial economic benefits to Ontario. The construction and operation of these reactors will create jobs, including work associated with the Pickering B refurbishment across the province, stimulate local economies, and foster innovation in nuclear technology. Additionally, SMRs have the potential to attract investment from both domestic and international stakeholders, positioning Ontario as a leader in advanced nuclear technology.

From an environmental perspective, SMRs are designed with enhanced safety features and lower waste production compared to traditional reactors, complementing life-extension measures at Pickering that bolster system reliability. They can significantly contribute to Ontario’s goal of achieving net-zero emissions by 2050. By providing a reliable source of clean energy, SMRs will help mitigate the impacts of climate change while supporting the province's transition to a sustainable energy future.

Community Engagement and Collaboration

Recognizing the importance of community acceptance and stakeholder engagement, OPG is committed to an open dialogue with local communities and Indigenous groups. This collaboration is essential to addressing concerns and ensuring that the deployment of SMRs is aligned with the values and priorities of the residents of Ontario. By fostering a transparent process, OPG aims to build trust and support for this innovative energy solution.

Moreover, the development of SMRs will involve partnerships with various stakeholders, including government agencies, research institutions, and private industry, such as the OPG-TVA partnership to advance new nuclear technology. These collaborations will not only enhance the technical aspects of SMR deployment but also ensure that Ontario can capitalize on shared expertise and resources.

Looking Ahead

As Ontario Power Generation moves forward with plans for three additional Small Modular Reactors, the province stands at a critical juncture in its energy evolution. The integration of SMRs into Ontario’s energy landscape promises a sustainable, reliable, and economically viable solution to meet growing energy demands while addressing climate change challenges.

With the support of government initiatives, community collaboration, and continued innovation in nuclear technology, Ontario is poised to become a leader in the advancement of Small Modular Reactors. The successful implementation of these projects could serve as a model for other jurisdictions seeking to transition to cleaner energy sources, highlighting the role of nuclear power in a balanced and sustainable energy future.

In conclusion, OPG's commitment to developing Small Modular Reactors not only reinforces Ontario’s energy security but also demonstrates a proactive approach to addressing the pressing challenges of climate change and environmental sustainability. The future of energy in Ontario looks promising, driven by innovation and a commitment to clean energy solutions.

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Senate Renewable Energy Tax Credits face Finance Committee scrutiny, with Democrats urging action on tax extenders, clean energy incentives, and climate policy, while Republicans cite prior wins in wind, biodiesel, and EV credits.

Key Points

Legislative incentives debated in the Senate Finance Committee to extend and align clean energy tax benefits.

✅ Democrats press hearings and action on energy tax policy

✅ Focus on clean energy, EVs, wind, biodiesel, and resilience

✅ Grassley cites prior extenders; disputes push for bigger subsidies

A group of 27 Democratic senators is calling for action in the Senate Finance Committee on extending energy-related tax credits and examining new tax proposals, especially those that incentivize renewable energy projects and align with FERC action on aggregated DERs across the grid.

Sen. Ron Wyden, D-Ore., the ranking Democrat on the Senate Finance Committee, who recently introduced a wildfire-resilient grid bill with Sen. Merkley, led the group of Democrats in writing a letter Tuesday to Sen. Charles Grassley, R-Iowa, who chairs the committee.

“Despite numerous opportunities, including in the recent tax extenders package, the Finance Committee has failed to take action on the dozens of energy tax proposals pending before it,” they wrote. “It is critical that the Committee move to address these issues in a timely manner, along with much needed policy changes that heed warnings on regulatory rollbacks to combat the damage and growing dangers caused by global climate change.”

The number of Americans ages 65 and over is projected to nearly double by 2060. And most would prefer to age in place and hiresenior caregivers if needed.

They pointed out that the Senate Finance Committee hasn’t held a single hearing on energy tax policy during the previous congressional term, and has yet to hold one in the current one.

“The sole energy tax-related recommendation of the Committee’s temporary policy task forces was ignored in the tax extender legislation passed in December 2019, along with nearly all proposals put forward in members’ legislation this Congress,” they wrote. “This Committee must fulfill its role in examining members’ energy tax proposals and in bolstering our nation’s efforts to combat climate change, including a clean electricity standard approach that sets firm targets.”

They noted that In 2019, the global average temperature was the second highest ever recorded and the past decade was the hottest ever. The lawmakers pointed to raging wildfires and increased flooding in the western part of the U.S., as well as challenges in California’s power system during the transition, causing unprecedented destruction over the past several years. They called for tax incentives for renewable energy to help combat climate change.

“Gaps in the tax code have disadvantaged complementary technologies that could improve climate resiliency and provide additional emissions reductions,” they wrote. “While power sector emissions continue to decrease, emissions from transportation, heavy industry and agriculture have stayed level or increased over the past 10 years, even amid $5 gas not spurring a green shift in consumer behavior. The United States is not on pace to meet its international climate commitments, to say nothing of the reductions necessary to stave off the worst potential outcomes of global warming.”

Grassley reacted to the letter, noting that he had worked to get tax extenders legislation passed, even as some states consider bans on clean energy use by utilities. "I begged Democrats for a year to help me get an extenders package passed, about half of which were green energy policies, so this rings hollow," he said in a statement Tuesday. "We wouldn’t have a wind energy credit or a biodiesel credit but for me, let alone an extension of either. Democrats were holding up these green energy provisions in an attempt to get a big expansion of taxpayer subsidies for rich Tesla owners."

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India Thermal Power Coal Imports surged 17.6% as CEA-monitored plants offset weaker CIL and SCCL supplies, driven by Saubhagya-led electricity demand, regional power deficits, and varied consumption across Uttar Pradesh, Bihar, Maharashtra, and Gujarat.

Key Points

Fuel volumes imported for Indian thermal plants, tracked by CEA, reflecting shifts in CIL/SCCL supply, demand, and regional power deficits.

✅ Imports up 17.6% as domestic CIL/SCCL deliveries lag targets

✅ Saubhagya-driven demand lifts generation in key beneficiary states

✅ Industrial slowdowns cut usage in Maharashtra, Tamil Nadu, Gujarat

The receipt of imported coal by thermal power plants, where plant load factors have risen, has shot up by 17.6 per cent during April-October. The coal import volumes refer to the power plants monitored by the Central Electricity Authority (CEA), and come amid moves to ration coal supplies as electricity demand surges, a power update report from CARE Ratings showed.

Imports escalated as domestic supplies by Coal India Ltd (CIL) and another state run producer- Singareni Collieries Company Ltd (SCCL) dipped in the period, after earlier shortages that have since eased in later months. Rate of supplies by the two coal companies to the CEA monitored power stations stood at 80.4 per cent, indicating a shortfall of 19.6 per cent against the allocated quantity.

According to the study by CARE Ratings, total coal supplied by CIL and SCCL to the power sector stood at 315.9 million tonnes (mt) during April-October as against 328.5 mt in the comparable period of last fiscal year.

The study noted that growth in power generation during the April-October 2019, with India now the third-largest electricity producer globally, was on account of higher demand from Pradhan Mantri Sahaj Bijli Har Ghar Yojana or Saubhagya Scheme beneficiary states. Providing connection to households in order to achieve 100% per cent electrification has in part helped the sector avert de-growth, as part of efforts to rewire Indian electricity and expand access.

Large states namely Uttar Pradesh, Bihar, Punjab, West Bengal and Rajasthan have recorded over five per cent growth in consumption of power. These states along with Odisha, Madhya Pradesh and Assam accounted for 75 per cent of the beneficiaries under the Saubhagya Scheme (Household Electrification Scheme). The ongoing economic downturn has led to a sharp fall in electricity demand from industrialised states. Maharashtra, which is also the largest power consuming state in India, recorded a decline in consumption of 5.6 per cent.

Other states namely Tamil Nadu, Telangana, Gujarat and Odisha too recorded fall in power consumed, echoing global dips in daily electricity demand seen later during the pandemic. These states house large clusters of mining, automobile, cement and other manufacturing industries, and a decline in these sectors led to fall in demand for power across these states. - The demand-supply gap or power deficit has remained at 0.6 per cent during the April-October 2019. North-East reported 4.8 per cent of power deficit followed by Northern Region at 1.3 per cent. Within Northern Region, Jammu & Kashmir and Uttar Pradesh accounted for 65 per cent and 30 per cent respectively of the regions power supply deficit.

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BC Utilities Commission Site C Dam Questions press BC Hydro on geotechnical risks, stability issues, cost overruns, oversight gaps, seeking transparency for ratepayers and clarity on contracts, mitigation, and the powerhouse and spillway foundations.

Key Points

Inquiry seeking explanations from BC Hydro on geotechnical risks, costs, timelines and oversight for Site C.

✅ Timeline of studies, monitoring, and mitigation actions

✅ Rationale for contracts, costs, and right bank construction

✅ Implications for ratepayers, oversight, and project stability

The watchdog B.C. Utilities Commission has sent BC Hydro 70 questions about the troubled Site C dam, asking when geotechnical risks were first identified and when the project’s assurance board was first made aware of potential issues related to the dam’s stability. 

“I think they’ve come to the conclusion — but they don’t say it — that there’s been a cover-up by BC Hydro and by the government of British Columbia,” former BC Hydro CEO Marc Eliesen told The Narwhal. 

On Oct. 21, The Narwhal reported that two top B.C. civil servants, including the senior bureaucrat who prepares Site C dam documents for cabinet, knew in May 2019 that the project faced serious geotechnical problems due to its “weak foundation” and the stability of the dam was “a significant risk.” 

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“They [the civil servants] would have reported to their ministers and to the government in general,” said Eliesen, who is among 18 prominent Canadians calling for a halt to Site C work until an independent team of experts can determine if the geotechnical problems can be resolved and at what cost.  

“It’s disingenuous for Premier [John] Horgan to try to suggest, ‘Well, I just found out about it recently.’ If that’s the case, he should fire the public servants who are representing the province.” 

The public only found out about significant issues with the Site C dam at the end of July, when BC Hydro released overdue reports saying the project faces unknown cost overruns, schedule delays and, even as it achieved a transmission line milestone earlier, such profound geotechnical troubles that its overall health is classified as ‘red,’ meaning it is in serious trouble. 

“The geotechnical challenges have been there all these years.”

The Site C dam is the largest publicly funded infrastructure project in B.C.’s history. If completed, it will flood 128 kilometres of the Peace River and its tributaries, forcing families from their homes and destroying Indigenous gravesites, hundreds of protected archeological sites, some of Canada’s best farmland and habitat for more than 100 species vulnerable to extinction.

Eliesen said geotechnical risks were a key reason BC Hydro’s board of directors rejected the project in the early 1990s, when he was at the helm of BC Hydro.

“The geotechnical challenges have been there all these years,” said Eliesen, who is also the former Chair and CEO of Ontario Hydro, where Ontario First Nations have urged intervention on a critical electricity line, the former Chair of Manitoba Hydro and the former Chair and CEO of the Manitoba Energy Authority.

Elsewhere, a Manitoba Hydro line to Minnesota has faced potential delays, highlighting broader grid planning challenges.

The B.C. Utilities Commission is an independent watchdog that makes sure ratepayers — including BC Hydro customers — receive safe and reliable energy services, as utilities adapt to climate change risks, “at fair rates.”

The commission’s questions to BC Hydro include 14 about the “foundational enhancements” BC Hydro now says are necessary to shore up the Site C dam, powerhouse and spillways. 

The commission is asking BC Hydro to provide a timeline and overview of all geotechnical engineering studies and monitoring activities for the powerhouse, spillway and dam core areas, and to explain what specific risk management and mitigation practices were put into effect once risks were identified.

The commission also wants to know why construction activities continued on the right bank of the Peace River, where the powerhouse would be located, “after geotechnical risks materialized.” 

It’s asking if geotechnical risks played a role in BC Hydro’s decision in March “to suspend or not resume work” on any components of the generating station and spillways.

The commission also wants BC Hydro to provide an itemized breakdown of a $690 million increase in the main civil works contract — held by Spain’s Acciona S.A. and the South Korean multinational conglomerate Samsung C&T Corp. — and to explain the rationale for awarding a no-bid contract to an unnamed First Nation and if other parties were made aware of that contract. 

Peace River Jewels of the Peace Site C The Narwhal
Islands in the Peace River, known as the ‘jewels of the Peace’ will be destroyed for fill for the Site C dam or will be submerged underwater by the dam’s reservoir, a loss that opponents are sharing with northerners in community discussions. Photo: Byron Dueck

B.C. Utilities Commission chair and CEO David Morton said it’s not the first time the commission has requested additional information after receiving BC Hydro’s quarterly progress reports on the Site C dam. 

“Our staff reads them to make sure they understand them and if there’s anything in then that’s not clear we go then we do go through this, we call it the IR — information request — process,” Morton said in an interview.

“There are things reported in here that we felt required a little more clarity, and we needed a little more understanding of them, so that’s why we asked the questions.”

The questions were sent to BC Hydro on Oct. 23, the day before the provincial election, but Morton said the commission is extraordinarily busy this year and that’s just a coincidence. 

“Our resources are fairly strained. It would have been nice if it could have been done faster, it would be nice if everything could be done faster.” 

“These questions are not politically motivated,” Morton said. “They’re not political questions. There’s no reason not to issue them when they’re ready.”

The commission has asked BC Hydro to respond by Nov. 19.

Read more: Top B.C. government officials knew Site C dam was in serious trouble over a year ago: FOI docs

Morton said the independent commission’s jurisdiction is limited because the B.C. government removed it from oversight of the project. 

The commission, which would normally determine if a large dam like the Site C project is in the public’s financial interest, first examined BC Hydro’s proposal to build the dam in the early 1980s.

After almost two years of hearings, including testimony under oath, the commission concluded B.C. did not need the electricity. It found the Site C dam would have negative social and environmental impacts and said geothermal power should be investigated to meet future energy needs. 

The project was revived in 2010 by the BC Liberal government, which touted energy from the Site C dam as a potential source of electricity for California and a way to supply B.C.’s future LNG industry with cheap power.

Not willing to countenance another rejection from the utilities commission, the government changed the law, stripping the commission of oversight for the project. The NDP government, which came to power in 2017, chose not to restore that oversight.

“The approval of the project was exempt from our oversight,” Morton said. “We can’t come along and say ‘there’s something we don’t like about what you’re doing, we’re going to stop construction.’ We’re not in that position and that’s not the focus of these questions.” 

But the commission still retains oversight for the cost of construction once the project is complete, Morton said. 

“The cost of construction has to be recovered in [hydro] rates. That means BC Hydro will need our approval to recover their construction cost in rates, and those are not insignificant amounts, more than $10.7 billion, in all likelihood.” 

In order to recover the cost from ratepayers, the commission needs to be satisfied BC Hydro didn’t spend more money than necessary on the project, Morton said. 

“As you can imagine, that’s not a straight forward review to do after the fact, after a 10-year construction project or whatever it ends up being … so we’re using these quarterly reports as an opportunity to try to stay on top of it and to flag any areas where we think there may be areas we need to look into in the future.”

The price tag for the Site C dam was $10.7 billion before BC Hydro’s announcement at the end of July — a leap from $6.6 billion when the project was first announced in 2010 and $8.8 billion when construction began in 2015. 

Eliesen said the utilities commission should have been asking tough questions about the Site C dam far earlier. 

“They’ve been remiss in their due diligence activities … They should have been quicker in raising questions with BC Hydro, rather than allowing BC Hydro to be exceptionally late in submitting their reports.” 

BC Hydro is late in filing another Site C quarterly report, covering the period from April 1 to June 30. 

The quarterly reports provide the B.C. public with rare glimpses of a project that international hydro expert Harvey Elwin described as being more secretive than any hydro project he has encountered in five decades working on large dams around the world, including in China.

Read more: Site C dam secrecy ‘extraordinary’, international hydro construction expert tells court proceeding

Morton said the commission could have ordered regular reporting for the Site C project if it had its previous oversight capability.

“Then we would have had the ability to follow up and ultimately order any delinquent reports to be filed. In this circumstance, they are being filed voluntarily. They can file it as late as they choose. We don’t have any jurisdiction.” 

In addition to the six dozen questions, the commission has also filed confidential questions with BC Hydro. Morton said confidential information could include things such as competitive bid information. “BC Hydro itself may be under a confidentiality agreement not to disclose it.” 

With oversight, the commission would also have been able to drill down into specific project elements,  Morton said. 

“We would have wanted to ensure that the construction followed what was approved. BC Hydro wouldn’t have the ability to make significant changes to the design and nature of the project as they went along.”

BC Hydro has been criticized for changing the design of the Site C dam to an L-shape, which Eliesen said “has never been done anywhere in the world for an earthen dam.” 

Morton said an empowered commission could have opted to hold a public hearing about the design change and engage its own technical consultants, as it did in 2017 when the new NDP government asked it to conduct a fast-tracked review of the project’s economics. 

Construction Site C Dam
A recent report by a U.S. energy economist found cancelling the Site C dam project would save BC Hydro customers an initial $116 million a year, with increasing savings growing over time. Photo: Garth Lenz / The Narwhal

The commission’s final report found the dam could cost more than $12 billion, that BC Hydro had a historical pattern of overestimating energy demand and that the same amount of energy could be produced by a suite of renewables, including wind and proposed pumped storage such as the Meaford project, for $8.8 billion or less. 

The NDP government, under pressure from construction trade unions, opted to continue the project, refusing to disclose key financial information related to its decision. 

When the geotechnical problems were revealed in July, the government announced the appointment of former deputy finance minister Peter Milburn as a special Site C project advisor who will work with BC Hydro and the Site C project assurance board to examine the project and provide the government with independent advice.

Eliesen said BC Hydro and the B.C. government should never have allowed the recent diversion of the Peace River to take place given the tremendous geotechnical challenges the project faces and its unknown cost and schedule for completion. 

“It’s a disgrace and scandalous,” he said. “You can halt the river diversion, but you’ve got another four or five years left in construction of the dam. What are you going to do about all the cement you’ve poured if you’ve got stability problems?”

He said it’s counter-productive to continue with advice “from the same people who have been wrong, wrong, wrong,” without calling in independent global experts to examine the geotechnical problems. 

“If you stop construction, whether it takes three or six months, that’s the time that’s required in order to give yourself a comfort level. But continuing to do what you’ve been doing is not the right course. You should have to sit back.”

Eliesen said it reminded him of the Pete Seeger song Waist Deep in the Big Muddy, which tells the story of a captain ordering his troops to keep slogging through a river because they will soon be on dry ground. After the captain drowns, the troops turn around.

“It’s a reflection of the fact that if you don’t look at what’s new, you just keep on doing what you’ve been doing in the past and that, unfortunately, is what’s happening here in this province with this project.”

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