B.C. Hydro buys Campbell River gas plant

BC Hydro said on Aug. 5 it will acquire the Island Generation natural gas-fired plant in Campbell River from Capital Power, adding a 275-megawatt backup source for Vancouver Island as electricity demand rises. The province and the Crown utility said the facility will be used to support reliability during peak-demand periods and emergencies while BC Hydro continues to add renewable generation, storage and transmission capacity. Financial terms were not disclosed. The plant has supplied BC Hydro under contract for years and has operated only intermittently, averaging about 15 days a year over the past five years when needed for reliability. ### Why buy a gas plant that runs only a few days a year? The province said Island Generation’s role is not baseload power but peak-demand backup. In its Aug. 5 release, the government said the Campbell River facility can be called on during periods of high demand and has averaged roughly 15 operating days annually over the past five years. Adrian Dix, British Columbia’s minister of energy and climate solutions, said in the release that population growth, electrification and industrial development are pushing electricity needs higher. (news.gov.bc.ca) The government said the acquisition is meant to secure a “cost-effective, strategically located asset” for Vancouver Island while BC Hydro expands its clean-electricity portfolio. ### What exactly is Island Generation? (news.gov.bc.ca) Capital Power says Island Generation is a 275-megawatt natural gas-fired combined-cycle facility in Campbell River on Vancouver Island that began operating in 2002. The company says it bought the plant in October 2010, after which it remained fully contracted to BC Hydro under a 12-year tolling arrangement that expired in April 2022. A May 2022 electricity purchase agreement between Capital Power and BC Hydro runs through October 2026, according to Capital Power’s project page. Capital Power also describes the facility as the single largest power generation site on Vancouver Island, representing about one-third of the Island’s generation capacity. ### How does BC Hydro say this fits with clean-energy plans? (capitalpower.com) BC Hydro and the province said the purchase complements, rather than replaces, the utility’s broader clean-energy buildout. The Aug. 5 government release tied the deal to BC Hydro’s “Powering Growth” plan, which includes conservation, hydroelectric upgrades, new renewable generation, battery storage and transmission infrastructure. The province also pointed to BC Hydro’s recently announced first utility-scale battery energy storage project on Vancouver Island. In the government’s account, Island Generation is meant to provide dependable capacity while those longer-term investments are developed and connected. ### Why is Vancouver Island a focus here? Campbell River Mayor Kermit Dahl said in the provincial release that city council had pushed for the purchase because the plant plays a critical role in energy reliability during peak demand and emergencies. (news.gov.bc.ca) His statement also linked ownership certainty at the site to future industrial investment in Campbell River. The province said recent load forecasts show British Columbia will need additional capacity sooner than previously expected. (news.gov.bc.ca) That forecast, officials said, is being driven by a combination of population growth, electrification and expanding industrial development, with Vancouver Island identified as a region where dependable backup capacity matters. ### What is still unknown? BC Hydro and the province did not disclose a purchase price in the Aug. 5 announcement. (news.gov.bc.ca) The companies also did not, in the materials reviewed, set out a closing date or any change in the plant’s expected operating pattern after the sale. Ajay Kumar, BC Hydro’s senior vice-president of integrated planning, told local media the utility expects the facility to keep operating in a similar fashion, with usage around the same number of days in coming years. (news.gov.bc.ca) Capital Power’s project page still lists the existing electricity purchase agreement as running through October 2026, which is one of the next concrete dates attached to the asset. (nanaimonewsnow.com)