June 23, 2024
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OIL & GAS RENEWABLE ENERGY

British Columbia’s Grid Expansion Faces Challenges in Powering LNG Projects

In a bid to bolster its C$36 billion ($26.7 billion) plan to enhance its grid infrastructure over the next decade, British Columbia (B.C.) confronts a significant hurdle in supplying the necessary hydropower to major liquefied natural gas (LNG) projects. Despite a 50% increase in electricity grid spending, B.C. remains at risk of falling short in providing clean energy to LNG facilities, such as Shell’s LNG Canada project.

Lengthy regulatory processes and delays in the critical northern transmission line expansion pose substantial obstacles, with the infrastructure projected to be operational only years after LNG plants commence operations. Compounding the issue, droughts have begun to impede power generation in the region.

Former B.C. environment minister Barry Penner, now chair of Energy Futures Initiative, emphasized the immense challenge in meeting the escalating demand for electricity, citing the situation as “daunting.” The surge in demand is attributed to increased needs from industries for renewable hydropower, coupled with the province’s transition to electric vehicles and electric heating in buildings.

The provision of hydropower to LNG projects, crucial for meeting emission reduction targets set by both the province and Canada for 2030, is facing obstacles. LNG Canada, currently 90% complete, is set to operate its facility on high-emission natural gas, posing complications for Canada’s net-zero goals. The project, considering a second phase with a potential shift to grid power, expressed encouragement for government efforts to expedite electricity expansion.

The linchpin of B.C.’s grid plan for LNG Canada hinges on the C$3 billion expansion of a northwest transmission line. However, BC Hydro CEO Chris O’Riley highlights the intricate process, estimating up to a decade for completion due to the necessity for agreements with First Nations and permitting. The expanded transmission line is not anticipated to be operational until the early 2030s, trailing behind the operational timelines of LNG Canada and competing proposals like Ksi Lisims LNG and Cedar LNG.

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