BC Hydro to buy natural gas power plant to help avoid electricity shortage | Daily Hive

BC Hydro to buy natural gas power plant to help prevent province-wide electricity shortfalls

Island Generation natural gas power plant in Campbell River on Vancouver Island. (Capital Power)

BC Hydro is purchasing a natural gas-fired power plant in Campbell River to provide backup electricity during periods of high demand.

The need for additional electricity capacity is being driven by population growth, new housing, economic expansion and industrial development, as well as the accelerating adoption of electric building systems and battery-electric vehicles that replace technologies previously powered by fossil fuels. Together, these trends are placing increasing pressure on the province’s electrical grid.

The Crown corporation confirmed its plan today to acquire the 275-megawatt Island Generation facility, which has supplied electricity to BC Hydro under a long-term purchase agreement since 2002. Its capacity is equivalent to 25 per cent of the newly built Site C project, which was recently formally renamed as the John Horgan Dam and Generation Station.

You might also like:

Earlier this year, in a filing to the B.C. Utilities Commission, the utility first indicated that it would need to continue using both the Island Generation facility and the McMahon natural gas power plant near Fort St. John for the foreseeable future.

Although the plant is located in Campbell River on the east side of Vancouver Island, BC Hydro says it can also support the wider provincial grid when electricity demand is at its highest, such as during the coldest days of winter.

Island Generation is not normally operated throughout the year. Over the past five years, the facility has generated electricity for an average of approximately 15 days annually, primarily when additional power was required to maintain reliability.

“Our job is to ensure British Columbians have reliable, affordable electricity every day of the year, including during periods of exceptionally high demand,” said Charlotte Mitha, president and CEO of BC Hydro, in a statement.

“Island Generation provides capacity that complements our hydroelectric system and the significant investments we are making in energy efficiency, renewable generation, battery storage and transmission infrastructure.”

The acquisition will give BC Hydro long-term control of an existing plant that can be activated relatively quickly while the utility develops new renewable electricity projects, upgrades its hydroelectric facilities, and expands the transmission system.

The purchase price was not disclosed in today’s announcement.

“The Island Generation facility plays a critical role in supporting energy reliability during peak demand and emergencies, while helping create the certainty needed for future industrial investment,” said Campbell River Mayor Kermit Dahl.

Approximately 98 per cent of the electricity generated by BC Hydro currently comes from clean or renewable sources. The Campbell River natural gas plant will remain a small fossil fuel component of the system and is expected to operate only when required to support reliability.

“Securing Island Generation will help ensure we have capacity to support that growth, while making historic investments in conservation, renewables and the clean-electricity infrastructure our province needs,” said Adrian Dix, the B.C. Minister of Energy and Climate Solutions.

The acquisition comes as BC Hydro makes a series of investments aimed at increasing both the amount of electricity available and the grid’s ability to deliver it.

In December 2024, building on the initial 2023 announcement that it would need significantly more power much sooner than later and after conducting a bidding process, BC Hydro announced its selection of the first 10 private sector-led projects, all of which focus on intermittent wind and solar power. That same year, BC Hydro announced a $36-billion expansion of its electrical network over 10 years, including $10 billion for infrastructure to support continued electrification and greenhouse gas reductions, over $5 billion to address load growth and increased customer connections, and $21 million for the ongoing maintenance of existing infrastructure.

In May 2025, it awarded purchase agreements for four intermittent wind electricity projects in northern B.C. and the southern Interior, which will deliver about 3,500 GWh to power 350,000 more homes.

BC Hydro is also pursuing upgrades across its existing hydroelectric system that are expected to provide more than 1,000 megawatts of additional capacity, including the installation of a sixth generating unit at the Revelstoke Generating Station.

John Horgan Dam, previously known as Site C, entered service in 2025, adding approximately 1,100 megawatts of generating capacity. About a decade ago, right through the 2017 general provincial election, the BC NDP were against the Site C project and had promised to cancel it mid-construction over their beliefs at the time that the power capacity was not needed and that the environmental impact from flooding a vast area for the reservoir was too great. The review was conducted mid-construction, but the BC NDP ultimately decided to complete the project.

The forecast for significant growth in electrical demand over the long term has also led the provincial government to consider building two additional massive hydroelectric dams. In June 2026, the provincial government confirmed it is revisiting previous hydroelectric dam concepts at Site E — a potential fourth hydroelectric dam on the Peace River, located east of Site C — and on the Homathko River near Bute Inlet, about 250 km northwest of Vancouver.

BC Hydro is also rolling out a new major electricity conservation initiative intended to help delay or prevent the need to make some major infrastructural investments.

The utility has also recently announced its first large-scale battery energy storage project on Vancouver Island. Batteries can store electricity when supply is plentiful and release it when demand rises, reducing some of the need for conventional backup generation.

You might also like: