Oct 12, 2017

BC First Nations are poised to lead the renewable energy transition

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These are exciting times in British Columbia for those interested in building sustainable, just and climate-friendly energy systems. The recent change in government could mean a shift away from a corporate agenda driven by the needs of a massively energy-intensive fracking and LNG industry towards one that prioritizes action on climate change, First Nations’ self-determination and community-scale economic development. Indeed, First Nations-led renewable energy generation offers a promising path forward for each of these.

The momentum that First Nations have already built in this area, combined with developments in renewable energy technology, means they are well-positioned to be leaders in BC’s transition to a sustainable energy system.

We recently completed a province-wide survey of First Nations’ involvement in the renewable energy sector,1 which turned up some provocative results. The survey was sent to all 203 First Nations in the province, and received a total of 105 responses.

First Nations-led renewable energy generation offers a promising path forward for BC’s transition to a sustainable, just and climate-friendly energy system.

A renewable energy project is defined as the development of power through solar, wind, geothermal, run-of-river, tides and biomass. The vast majority of survey respondents (98%) are already involved or interested in becoming involved in the renewable energy sector. Thirty respondents report a combined total of 78 operational projects, with a total generating capacity of 1,836 MW. Thirty-two respondents report a further 48 projects in the planning or construction phase, and 77 respondents have an additional 250 projects under consideration. Projects vary considerably in size, technology and application. Some projects are intended to provide electricity to community buildings while others are meant to generate revenue through power sales.

First Nations experience myriad benefits from these projects. Many of the survey respondents identified renewable energy development as an economic venture that is consistent with their values and priorities. For some, commercial scale projects have the potential to generate much needed revenue and jobs with minimal damage to the environment. For others, project benefits include increasing community capacity, energy self-sufficiency and reducing their diesel or BC Hydro expenditures. One survey respondent stated:

Our first project is a model of environmental, financial and community benefit. The social side has been fantastic because it has engendered pride in people who were challenged to be proud given the history of [First Nation] relations with the general population and media in Canada and the ongoing effects of residential school.

The complex story of BC’s experiment with run-of-river power

Much of the early involvement in renewable energy projects by First Nations has occurred through run-of-river hydroelectric projects. In 2002, BC’s provincial government began purchasing power from Independent Power Producers (IPP) through its Call for Power program.

First Nation communities have worked hard to negotiate financial benefits from this industry in a number of different ways. Many have signed Impact Benefit Agreements (IBA) with private companies developing projects on their territory. These IBAs can include equity in the projects, employment guarantees, royalty revenue, and other community benefits. Some have gone on to develop and own their own projects. Our survey found that 96% of generating capacity comes from energy purchase agreements (EPA) signed through BC Hydro’s Call for Power program.

Although First Nations have benefited significantly from the government’s shift towards independent power production, the policy has been highly contentious. Concerns have focused on the implications of shifting a largely publicly owned electricity generation system to one intended to generate private profit;2 the consequences for ratepayers of BC Hydro locking into contracts with private producers at high prices;3 the pace and scale of development;4 social and environmental impacts;5 the adequacy of regulatory frameworks and enforcement in relation to both construction and operation of these facilities;6 and the appropriateness of the technologies being used.7

Our survey results raise some interesting possibilities in relation to these concerns. Although not publicly owned at the provincial scale, renewable energy projects owned and developed by First Nations offer a model of public benefit from the development of public resources, as the profits generated by these projects are invested into local communities. As one survey respondent commented:

[We are] undertaking the proposed project because it is an excellent opportunity for sustainable development with direct benefits to the environment and the community. The significant, long-term, steady cash flow to the community from an EPA [Energy Purchase Agreement] with BC Hydro will accrue to the community over time, with the economic benefits extending beyond the community, reaching nearby [communities] and benefiting members in other regions. Though somewhat limited in employment creation opportunities on its own, the cash generated from the project will enable [us] to invest in and grow other labour intensive sectors such as tourism, forestry and fisheries.

Many of the First Nations developing these projects also put a high priority on ensuring that they have minimal environmental impact. Survey respondents emphasised that it is only in this context that the developments are consistent with their values and priorities. One respondent stated:

The … river system is home to many species of fish. Protection of these fish is [our] priority. [We] were involved in field studies and reviews, and in drafting terms of reference for the studies. The studies examined water, wildlife, habitat, vegetation, air quality, traditional and current use, and archaeology. The knowledge was used to adjust the project’s design to offer better environmental protection.

A policy trajectory that supports the development of renewable energy projects by First Nations, and perhaps other local communities, thus has the potential to facilitate the public benefit of developing these resources.

Moving from run-of-river to solar and other renewables

In relation to concerns about run-of-river hydro projects, a particularly interesting finding of the survey is a shift in favoured renewable energy technologies among First Nations. The responses reveal an increase in the percentage of solar photovoltaic (PV), solar thermal, biomass and micro-hydro projects under development—compared to already-operational projects, of which 61% of which are run-of-river hydroelectricity.

This shift may be partly due to the growing affordability of certain technologies (especially solar PV), as well as their greater flexibility in terms of location (they are less site-constrained than hydro, wind or geothermal). Although these technologies are not without environmental impacts, it is frequently simpler to manage such impacts in both construction and operational phases than is the case with run-of-river projects.

First Nations have built significant momentum in the renewable energy industry—and their involvement is bringing real benefits to their communities.

This trend could indicate the potential to spread the benefits of renewable energy development more widely across communities, as more flexible and affordable technologies allow for more diverse applications. Sixty-one percent of projects under consideration, for example, are being considered by communities with no current involvement in the industry.

In this way, the survey results reveal that First Nations have built significant momentum in the renewable energy industry, that their involvement is bringing real benefits to their communities, and that expanding and enhancing their involvement may similarly offer a double benefit: to communities seeking to increase their self-sufficiency and resilience as well as to BC’s efforts to decarbonize its economy minimizing the environmental impacts of its energy system.

If this pathway is appealing, what is currently constraining it?

Barriers to further progress: Enter Site C

Although survey respondents overwhelmingly expressed an interest in greater involvement in the renewable energy sector, they also identified three primary barriers to increasing their involvement: limited opportunities to sell power to the grid via BC Hydro, difficulties obtaining financing and a lack of community readiness. All three of these can be overcome with political will and resources.

Perhaps the most urgent of these is the significant decline in BC Hydro’s interest in facilitating independent power production, which arises in part from the commitment to build the Site C dam, the most expensive public infrastructure project in the province’s history. As Site C will produce such a large amount of power (1,100MW), it forecloses any opportunities to produce alternative forms of power, and for communities (First Nations and others) to benefit from this power production.

Respondents to our survey expressed that they have projects that are “…still viable and feasible and desirable. We want them to proceed [as] we’ve invested a lot of time and energy in advancing our needs, what we need is BC Hydro to free up the opportunity.” These projects cannot be pursued until opportunities for power purchase are available from BC Hydro.

In this way, the development of Site C is a double blow to many First Nations: opposition on the part of those Nations directly affected by the dam is fierce,8 and many others see the dam as blocking the primary economic development opportunity available to them. First Nations are not alone in their opposition, of course; substantial concerns about the dam’s necessity,9 impacts,10 purpose,11 financial viability12 and the legitimacy of the approval process13 have been raised from a wide variety of sources.

Although Site C does offer a return to publicly owned electricity generation, it does not represent a sustainable or progressive path towards climate change mitigation. Site C is being developed to power a potential LNG industry that will be fed by fracked gas from Northeast BC. Most likely, Site C will produce a surplus of power when it comes online in 2024, halting the expansion of positive benefits that First Nations have accrued from developing renewable energy projects.

As Site C will produce such a large amount of power, it forecloses opportunities for communities to produce and benefit from alternative forms of power production.

Unfortunately, Site C is not the only barrier to First Nations’ ambitions in this area; at the moment BC Hydro is awash with power, and predicting future demand is notoriously difficult. Much depends not only on whether any LNG projects are developed, but also on whether the shale gas industry continues without them as some have suggested it might,14 and what trajectory climate policy in the province takes. The electrification of sectors such as transportation, for example, has the potential to substantially transform electricity demand in the province.15 This makes it difficult to assess how much power will be needed, what prices the market will support, and thus what kinds of projects might be viable. However, this level of uncertainty—combined with the arrival of a new government—highlights the urgency for a new policy framework for renewable energy development in the province.

Beyond smaller-scale private versus mega-scale public development models

Those wanting energy systems in BC to contribute to a sustainable, equitable and just society have struggled with a troubling pair of options: on one hand, privately owned renewable infrastructure that channels profits from exploiting a public resource to corporations, and on the other hand, large-scale state-owned energy infrastructure that perpetuates the dispossession of First Nations and facilitates industrial development that is detrimental to a healthy climate. In the intervening years—as First Nations gained traction in renewable energy development and the unjust and risky nature of Site C became ever more apparent—other options have come into focus.

Part of the previous provincial government’s argument for the need to privatize energy development was that the public sector simply couldn’t develop enough diverse, small- to medium-scale renewable energy projects at the rate required to mitigate climate change. However, First Nations now appear ready to step up to this challenge, and there is no reason other communities couldn’t also be encouraged on this path. We are no longer stuck between two unpalatable alternatives.

Instead, public policy could prioritize and facilitate the development of renewable energy projects that are First Nation or community-owned. A supportive policy framework could be developed that acknowledges the social, economic, and environmental value of these projects: mandates could be developed requiring meaningful equity involvement—or indeed full ownership—for First Nations or local communities; dedicated Electricity Purchasing Agreement targets for First Nations or community-led projects could be set aside, as they do in New Brunswick; BC Hydro could be allowed to develop projects jointly with First Nations, as they are doing in Manitoba, where the provincial utility Manitoba Hydro has partnered with First Nations to build two large dams.

Investing even a small portion of the funds allocated to Site C would lead to substantial progress in relation to the other two barriers: difficulty obtaining financing and community capacity building. Fortunately, there are good examples from other jurisdictions of different models for tackling financing issues, and of promising projects underway to build capacity in the sector.16 The Northwest Territories supports financing small-scale projects developed by residents, businesses, communities and First Nations through an Alternative Energy Technologies Program that funds 50% of project costs. Nova Scotia’s Community Economic Development Investment Fund helps community groups access low-cost loans.

Shifting policy and addressing these barriers would unleash the potential for First Nations—and possibly other communities—to build projects with technologies and at scales that work for their communities.

A moment of opportunity

Action on climate change will require electrification of transportation, homes and buildings, to transition away from burning fossil fuels.17 While energy conservation (i.e. managing demand for electricity) has a pivotal role to play in this transition, new power production will still be required.18 With a new government in power that has committed to both climate action and reconciliation, we are at a moment of opportunity for First Nations-led development of renewable energy in BC.

“We believe that renewable energy is an important piece to allowing our Nation to be able to go back to the Traditional Territories and maintain a presence there.”
—survey respondent

As a survey respondent expressed, “This is the only sector that offers any hope of current and future economic opportunities.”

Another emphasized, “We believe that renewable energy is an important piece to allowing our Nation to be able to go back to the Traditional Territories and maintain a presence there.”

Instead of proceeding with Site C, BC has an opportunity to produce what new power will be needed through a model of energy system development that takes advantage of emerging cost effective technologies and public ownership at a community scale. Doing so would enable an energy system that can be scaled up incrementally as demand projections increase. It would also ensure the benefits energy projects are channelled to communities impacted by their development, and help respond to past injustices of energy development in our province.

Choosing this path would result in a more distributed energy system, more resilient and empowered communities, a more diverse economy and a more just path towards climate change mitigation. And it would support First Nations to lead in an industry in which they have already built substantial momentum. The groundwork has been laid for moving towards a more diverse and equitable economy, should we choose to support it.

Notes

  1. Cook, D., Fitzgerald, E., Shaw, K., & Sayers, J. (2017). First Nations and renewable energy development in British Columbia. School of Environmental Studies, University of Victoria.
  2. Calvert, J. (2007). Liquid gold: Energy privatization in British Columbia. Black Point. NS: Fernwood Publishing.
  3. Calvert, J. (2006, October 30). BC Hydro’s amazingly bad deal for ratepayers. The Tyee. Accessed June 30, 2017.
  4. Barlee, G. (2009, February 18). Private run-of-river power projects make no sense in BC. Georgia Straight. Accessed July 1, 2017.
  5. Hall, T. (2012) Tamed rivers: A guide to river diversion hydropower in British Columbia. Watershed Watch Salmon Society.
  6. Thielmann, T. (2010). Testing the waters: A review of environmental regulation of run of river power projects in British Columbia. Victoria, BC: Devlin Gailus Barristers & Solicitors.
  7. Calvert, J., & Lee, M. (2012). Clean electricity, conservation and climate justice in BC. Canadian Centre for Policy Alternatives.
  8. a. Lee-Andersen, S., & Gray, B.  (2017, February 10). Legal challenges to Site C dam by BC First Nations dismissed by Federal Court of Appeal and BC Court of Appeal. Canadian Energy Perspectives. Accessed June 29, 2017.
    ////
    b. Schultz-Jagow, T. (2015, 18 November). Re: Site C dam and the human rights of Indigenous people in the Peace Valley. Amnesty International. Accessed June 20, 2017.
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    c. Tsakoza, L., & Wilson, R. (n.d.) Re: Need for and alternatives to BC Hydro’s proposed Site C project. Treaty 8 Tribal Association. Accessed October 11, 2017.
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    d. Ducklow, Z. (2017, April 26). Site C threatens treaty rights, way of life, say some First Nations. The Tyee. Accessed June 29, 2017.
  9.  Canadian Environmental Assessment Agency. (2014, May 1). Report of the Joint Review Panel: Site C energy project. Accessed October 11, 2017.
  10. Bakker, K., Christie, G., & Hendriks, R. (2016). Report #2: Assessing alternatives to Site C (environmental effects comparison).Vancouver: Program on Water Governance, University of British Columbia. Accessed June 30, 2017.
  11. Parfitt, B. (2016, February 4). Ever wondered why Site C rhymes with LNG?. DeSmog Canada. Accessed June 14, 2017.
  12. Hendriks, R., Raphals, P., & Bakker, K. (2017). Reassessing the need for Site C. Vancouver: Program on Water Governance, University of British Columbia.
  13. Bakker, K., Christie, G. & Hendriks, R. (2016). Report #3: The regulatory process for the Site C project. Vancouver: Program on Water Governance, University of British Columbia. Accessed June 30, 2017.
  14. Pollan, C. (2017,17 June). How the death of BC’s LNG dream could stoke a BC natural gas boom. DeSmog Canada. Accessed October 11, 2017.
  15. Wolinetz, M., & Bataille, C. (2012). BC Hydro electrification potential: Review final report. BC Hydro.
  16. a.Henderson, C. (2013). Turning on the switch. In Aboriginal power: Clean energy and the future of Canada’s First Peoples (pp. 18-35). Erin, Ontario: Rainforest Editions.
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    b. Sayers/Kekinusuqs, J. (2015). BC First Nations clean energy toolkit: A how to. BC First Nations Clean Energy Working Group. Accessed July 1, 2017.
  17. Intergovernmental Panel on Climate Change (2011). Summary for Policy Makers. In Renewable energy sources and climate change mitigation: Special report of the Intergovernmental Panel on Climate Change (pp. 3-26). Cambridge University Press.
  18. Calvert, J., & Lee, M. (2012). Clean electricity, conservation and climate justice in BC. Canadian Centre for Policy Alternatives.

This report is published as part of the Corporate Mapping Project, a research and public engagement initiative investigating the power of the fossil fuel industry. This research is supported by the Social Science and Humanities Research Council of Canada (SSHRC).

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