An Old Idea Gets New Life: District of Lake Country's Turbine Generator
The concept of the turbine generator project for the District of Lake Country (DLC) was first envisioned a century ago when the irrigation systems were being installed to water the newly planted orchards in the Okanagan. More recently (1992) interest was rekindled by a local electrical engineer who saw the benefits of the project and had the opportunity to incorporate it into the existing water system.
The idea of hydroelectric generation didn’t float, however, because of the element of financial risk and hydraulic instability of water flow within the distribution system. The idea was not predictable enough and resources weren’t available to garner the construction of a turbine.
In 2003, the former District Utility Manager Jack Allingham was approached by hydroelectric consultant Graham Horn about the possibility of starting a hydroelectric generation project using funding available from new government programs.
The District was in the initial stages of planning a balancing reservoir to help stabilize water flow for irrigation and domestic use; this infrastructure was ideal for the development of a turbine. The predictable water flow would provide the hydraulic stability required for the use of a turbine.
Allingham and Horn were able to conduct a feasibility study for a generation unit with funds from the Green Municipal Enabling Fund. While he was planning the reservoir, Allingham kept in mind the requirements of the turbine so that it may be built in conjunction with the reservoir or afterwards.
Planning for Power
As plans for hydroelectric generation began to take form, Allingham started to bring others into the planning process and began the development plan for a water license for the facility. A 2006 call for energy proposals from BC Hydro was the final push to encourage the project. By April of 2006, with the balancing reservoir committed to and in the preconstruction stage, the hydroelectric project went to district council and won support and approval. By August of the same year, DLC was able to sign an energy production contract with BC Hydro.
A large amount of work went into the studies and licenses that were needed to ensure that the project would be a success. Allingham and the development consultants played a key role in bringing this project to fruition, as things got underway individual councilors, additional staff and consultants, public advisory committees and outside agencies all became stakeholders. “We did a process of consultations, with government agencies and with First Nations, and we had to review a lot of policy around this kind of project. We looked at the Navigable Waters Protection Act and the Crown Land Tenure. We needed and Interior Health Construction Permit, an Interconnection Agreement and the Electrical Service Agreement,” explained Allingham.
Over time, the project was brought into public view and discussed with residents and planners from other municipalities. Stories were run in the paper and tours were run for government agencies, municipalities, and First Nations leaders. Allingham says “the more people understood the project and the idea of hydroelectric generation from the reservoir, the more support we got.”
Financial Flows of Hydroelectric Generation
The project did have its challenges, though. One of the major concerns around the generation project was the risk involved in investing in such a large infrastructure which may not generate enough money to cover operating costs. Staff had initially shown concern that the project would leave them financially exposed.
This project has changed the district. The Official Community Plan now includes the hydroelectric turbine as a first step towards greening the community.
“The recommendation from the staff was not to do it,” Allingham said. Excited about the turbine, Allingham, took a step out and spoke up for the project. “I went to the water services advisory commission and urged them to go for the project. In the end it was ten against the project and one for, so it went to council, who voted unanimously in favour.”
The hydroelectric generation project cost a total of $4 million. The DLC received a two million dollar grant from the federal Gas Tax and another half a million through the Community Works Fund. The remainder of the capital was covered through low interest municipal loans and a 10 year production grant from Natural Resources Canada. The project finance committee has taken advantage of short term loans which will be paid off through the sales of electricity generated by the turbine.
Even in light of the financial risk that the project faced, DLC council was enthused about the hydroelectric generator from the get go. “District council wanted to be green and reduce their greenhouse gas (GHG) emissions. The whole thing wasn’t primarily profit driven,” says Allingham.
It was three years after the bid to BC Hydro that the turbine was completed and commercially operative. The effort was worthwhile. Now the generator sells electricity to BC Hydro and runs with little supervision.
“As soon as we bid for a contract with BC Hydro,” says Allingham, “everyone from the District staff started to contribute and the whole organization get involved. Doing all the contract work meant that we needed legal support, and we got it.”
The efforts of staff have meant that the District hasn’t had to hire on new personnel to run the facility. "In the summer, when the turbine was running for the first time, we may have shorted staff from other areas to manage the project. But now that we are through the start-up bugs we don’t expect the project to be onerous.”
This project was initiated, in part, to help the district meet its GHG reduction targets. The GHG targets were initiated by Mayor and Council and with that commitment they were prepared to take some risk with the construction of the hydro project. “Council began its commitment to GHG reduction and number of years ago and this commitment gave them the strength to go ahead on this project,” says Allingham.
Generating Power, Generating Profit
Though the project wasn’t profit driven, the revenue generated from the sale of electricity has been welcome by the municipality. Currently, much of the money generated is used to pay off the project, while some of the surplus revenue is being used to further green goals. The District is creating a fund from the community power project to cover the cost of future projects and initiatives that help to reduce greenhouse gas and mitigate the impact of climate change. DLC expects to be able to contribute $4.5 million over 20 years.
Allingham notes that “the real money is going to be made when the loans are paid back. Much of the current income is going to pay for the project, which will take roughly 7 years. The life span of the turbine and generators is comfortable 35 years. We spent extra money so that it will last a long time. And, when the 20 year operating agreement with BC Hydro ends, we will have options around who we can sell energy to, and then we can really make some money.”
The hydroelectric turbine now produces enough electricity to power 400 homes and represents a reduction in the GHG emissions of the District.
The generator is managed directly by the DLC. “When we started this project,” says Allingham, “I never envisioned council running the project. But at each step of the way the council had enough confidence to take on the project themselves.” The project has also been an opportunity for new and existing staff to learn about green technologies. “There is a whole new level of knowledge that the staff had have to rise to,” says Allingham. “For a number of staff this has been an awesome challenge.” The turbine has been a draw for one new employee, who was excited to work for DLC and get to learn more about hydrogenation.
Allingham notes that “this project has changed the district. The Official Community Plan now includes the hydroelectric turbine as a first step towards greening the community.”