Site C

The BC Utility Commission (BCUC) released for comment what it considers to be an alternative to Site C that could meet future electricity requirements. Its alternative basically consists of a lot of wind projects, utility scale batteries and conservation measures. Based on a number of assumptions, it estimated the present value net costs that this alternative would entail (with all expenditures and export revenues discounted back to an equivalent 2018 value taking the time value of money into account). The BCUC release relates to the fourth question in the Site C terms of reference about whether there is an alternative to Site C that could provide the same benefits at equal or lower cost. There is no explicit comparison to Site C in the BCUC release, as it does not provide a comparable Site C 2018 present value cost net of export revenues. However, BCUC’s estimates would appear to suggest that contrary to BC Hydro’s calculation that an alternative portfolio of projects would be so...

The BCUC gives few clues as to what it will ultimately conclude with respect to the merits of completing, suspending or terminating Site C. It certainly did not provide any interim assessment of the key question that the BCUC was asked to address – what would be the impact of the different options on ratepayers. Nevertheless, buried in the two hundred plus page report are some very interesting issues that warrant careful consideration in the analysis and conclusions that are ultimately made. It is not clear from the Interim Report whether the failings of the previous government’s energy policy, which forced BC Hydro to buy run of river, wind and other IPP supply BC Hydro didn’t need at prices far in excess of its market value, are fully understood. The problem wasn’t just the high price for this energy; it was its low value. Run of river supply is generated disproportionately during the springtime and other water run-off periods when it is least needed to complement BC Hydro’s own...

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 CO 2e 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 wou...

It is very understandable why some people are opposed to the construction of Site C. There are people who will be forced from their homes; a valley and First Nation traditional territory irreversibly changed; habitat and resources lost. What isn’t understandable, however, are the simplistic arguments some critics of Site C have put forward to suggest there is a business case for stopping construction at this time. The suggestion that Site C will be a ‘white elephant’ is unquestionably wrong. A ‘white elephant’ is a project that is too expensive to maintain in operation and would have little or no value if sold. Large hydro projects like Site C are anything but that. You can argue Site C shouldn’t be built in the first place.   However, once built it will provide ‘dispatchable’ electricity for 60 years or more at very low on-going costs. Dispatchability means Site C can generate electricity when most needed and valuable. Low operating costs means the electricity it can ...