The GHG Implications of Completing Site C

One of the more curious aspects of the environmental opposition to Site C is the near complete disregard for the GHG implications of proceeding with the project at this time.

As many critics have pointed out, the 5100 GWh of electricity from Site C will be surplus to BC requirements for a number of years after the project is scheduled to come into service. But for as long as Site C supply is surplus to BC requirements it will be sold into Alberta and U.S. markets where it will generally displace the highest cost (least efficient) thermal power production that would otherwise be produced. In so doing it will significantly reduce GHG emissions in those jurisdictions.

Displacing 5100 GWh of thermal power production would reduce GHG emissions by some 2.6 to 4.8 million tonnes of CO2e per year. The benefit, based on an estimated social cost of carbon of $50/tonne, would be $130 to $240 million per year. If Site C were surplus for 10 years, as some have argued, the GHG benefit would total $1.3 to $2.4 billion.

At a higher social cost of carbon of $100/tonne or more – which some analysts suggest we should assume to take into account not just the expected damages from climate change but the added risk of low probability highly catastrophic events -- the GHG benefit from 10 years of surplus Site C supply would be $2.6 to $4.8 billion or more.

There will be emissions from the creation of the Site C reservoir, but the cumulative cost was estimated in the UBC study to total some $150 million at $50/tonne ($300 million at $100/tonne) – a small offset to the large and continuing amount of benefit the project offers.

Reducing GHGs is not the prime reason for developing Site C nor is it the central benefit it offers over the long term. And of course, the more and sooner Site C supply is needed to meet BC requirements, the less will be the GHG benefit from thermal power displacement.

Further, this GHG benefit may not be captured in surplus sales prices and therefore may not mitigate impacts of the development of Site C on BC Hydro rates – that will depend on whether and how carbon taxes and policies affect surplus sales prices.

Nevertheless, the reduction of GHG emissions from thermal power displacement is environmentally important and beneficial for British Columbians regardless of in what jurisdiction those reductions occur. Particularly for those who take the position that Site C will be surplus for many years after it comes into service, it is a factor to consider when assessing the overall social benefits and costs of completing the project at this time.

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