British Columbia Utilities Commission will release its second Site C report on November 1. I expect this will provide further information but not a definitive recommendation. But, of course, the buck stops at John Horgan’s cabinet table.
In 2014, Bill Bennett provided assurance that, unlike numerous Liberal megaprojects with runaway costs, the $7.9 billion Site C dam budget was final, fully reviewed by specialists and reliable because it included a contingency well above prudent amounts.
Nothing left to chance, uncertainty or politics because the budget was developed by the world’s top experts, said Bennett.
Well, more recently the number was $8.8 billion and that was before BC Hydro admitted to a $610 million overrun in its work to date. The geotechnical challenges are unresolved and the real cost is unknown. Some experts predict the budget could still rise as much as $3 billion.
Writing at The Tyee, Bill Tieleman listed the arguments for and against completion made by proponents and opponents:
Mr. Tieleman predicts the project will be suspended but not cancelled. I believe that would be the second best alternative .
The listed arguments in favour of the project are weak or faulty:
- Site C might produce about 10% of what is presently consumed in British Columbia. Right now, there are 2.1 million households in the province so it is more accurate to say that Site C would provide enough power for an additional 210,000 residences. Improved efficiencies and conservation could save an equal amount if addressed seriously.
- BC Hydro overstates Site C production by about 15%. In the past five years, the average annual production per MW of hydro capacity is 4.1 GWh. The utility predicts Site C output will be significantly higher. Given their track record of misinformation on load forecasting, we can be reasonably sure they are misstating the benefits of the new dam.
- The impact of electrical vehicles over the next decade will be far less than proponents predict. Very few are sold in British Columbia now and the extra capital cost and drivers’ range anxiety, particularly outside urban areas, ensures little change is likely in the next decade. Internal combustion engines have improved significantly in fuel burn and emissions and one manufacturer expects to employ new gasoline engine technology by 2019 that will be 45% more fuel-efficient than its engines of ten years ago. Improving marine engines could provide more benefit than changing to electric cars.
- Reservoirs are a major source of greenhouse gases and, if we believe that vehicle electrification is positive, achieving that through hydro power may result in little or no benefit. Solar power would be a better choice.
- British Columbians trying to justify Site C power by selling it to Alberta are fools. In recent years, the wholesale price of electricity in the neighbouring province averaged between 2¢ and 4¢ per KWh, about one third of BC Hydro’s marginal cost of power. The wholesale price even touched zero on a few occasions. Alberta’s new privately owned Shepard power station produces electricity at a cost far below that of Site C. Suppliers already plan new gas-fired generation facilities and Alberta will not be buying BC power unless we sell it at a substantial loss.
- Completing the Peace River project may provide power more cheaply than it might cost in the future but that is not a valid argument if alternative sources of power cost less now and, according to established trends, will cost even less in the future.
- British Columbia already has a huge volume of stored power potential. Prudent utility management requires that but it does not have to be exclusive. If we introduce wind and solar, hydro power can be saved during hours when those new sources are plentiful and used when they are not.
The Tyee article didn’t include job provision as an argument in favour of continuing Site C but proponents, particularly the contractors hoping to profit from construction, always raise that consideration. The direct jobs affected by project cessation are rather less than claimed. A large portion of current workers would be redeployed by their employers. Many would find work in projects that have more social and economic value to British Columbia.
The Horgan Government has addressed many important issues in its first three months. It now must find the nerve to make the right choice for BC Hydro and consumers of electricity. Proceeding with Site C without independent review was a major Liberal blunder.
If you are trying to get out of a hole, the first act is to stop digging.
The economic and cultural factors say stop Site C now.
Political considerations dictate the same response. This a Christy Clark Liberal boondoggle. Let that party wear the responsibility.
Voters will punish the Liberals and that political party will regret their folly for years to come.
Note: BC Hydro’s own facilities were called on for less power in the 3-year period ended June 2017 than in the 3-year period ended June 2007. By the way, the utility’s own generating capacity is 15% greater in 2017 than it was in 2007.
In 2015, Scientific American published The Price of Solar Is Declining to Unprecedented Lows:
Perhaps the most interesting piece of data to come out in the latest Lawrence Berkeley National Lab reports is the trend in the price of solar power purchase agreements or PPAs. These prices reflect the price paid for long-term contracts for the bulk purchase of solar electricity. The latest data show that the 2015 solar PPA price fell below $50 per megawatt-hour (or 5 cents per kilowatt-hour) in 4 of the 5 regions analyzed.
The price of utility scale solar power has fallen further since then, to a level about half of the projected cost of electricity generated at Site C.