If you’re looking for an example of green and clean energy policy in action, let’s take a walk around British Columbia’s massive $10-12-billion hydro dam project. Officially described as the “Site C Clean Energy Project” by its developer, B.C. Hydro, the project on the Peace River — some 1,185 kilometres by flying crow north of downtown Vancouver — is unfortunately a little messy and unstable at the moment, so watch your footing, and your wallet.
Under foot, according to Premier John Horgan, “there is instability on one of the banks of the river.” Early last year B.C. Hydro identified “structural weaknesses” in the project, which has been under construction since 2015. Site C is also said to suffer from “weak foundations.” Vancouver Sun columnist Vaughn Palmer recently reported that new information on the precariousness of the project, structurally and financially, continues to beg the question: Should Site C be killed and the $6-billion already sunk into it be abandoned?
Yes, says a new paper. In a review of the economics of the Site C hydroelectric project, three Canadian university economists — Brett Dolter in Regina, Kent Fellows in Calgary and Nic Rivers in Ottawa — conclude that the whole project is uneconomic as an energy source and fails its major green and clean promise, which is to reduce carbon emissions.
The worst numbers in the study: the total present value of the electricity produced from Site C is estimated at $2.76 billion against an estimated total cost of $10.7 billion, implying a loss of $8 billion. That’s bad. However, if the project were cancelled now, the loss would be cut in half to maybe $4.5 billion. The economists conclude that “policy makers should stop throwing money at a project that is likely to end up under water.”
Good strong conclusion. But there’s a caveat. Maybe, add the economists, just maybe Site C could be justified if the $10.7-billion current estimate project cost could be rolled into a massive national overhaul of the Canadian electricity system. In the words of the paper:
“In summary, we find that Site C can offer value, but only if the provinces aim for near complete electricity system de-carbonization and only if new transmission between provinces can be built to enable greater inter-provincial electricity trade. Decisions about the future of Site C should be made in this light; if it is not possible to commit to fully decarbonizing electricity generation, and if prospects for inter-provincial transmission are low, Site C offers little value in comparison to its costs. In contrast, if B.C. and Alberta are committed to achieving a zero-carbon electricity system, and building new inter-provincial transmission lines is feasible, then Site C can offer value in excess of its costs.”
[Interesting Read]
