Last week, I wrote about the pending British Columbia Utility Commission Inquiry Respecting Site C: Final Report to the Government of British Columbia.
The report was release on Nov. 1 and is 187 pages long with 112 pages of appendices.
It is a substantial body of work and not reading for the faint of heart. However, its executive summary is much simpler to understand. It boils down to it is going to cost $10 billion in total to complete the dam and $4 billion to stop construction.
The big difference between those two numbers is for $10 billion, we get a dam which will supply electricity for the next 70 years or so. For $4 billion, we get a remediated work-site and still have to come up with the money to build capacity for the electricity we will need.
To put it even simpler, for
$10 billion we get something and for $4 billion we get nothing.
From a ratepayer's perspective, I would suggest the former is a better deal than the latter. But I am sure there are plenty of people who would rather see the site remediated and returned to its agricultural potential, regardless of the cost.
All of that said, we are still going to need the electrical capacity. Where is it going to come from?
The BCUC spends much of its report discussing the options such as wind, solar, and geothermal. It also tries to get a handle on the actual costs. The commissioners spoke to various associations representing independent power producers and companies. It also had an independent accounting firm examining the data and providing the best analysis it could.
The problem, which the commission recognizes, is predicting the future is fraught with pitfalls. Will the population of the province grow? Will industry shift? Will BC Hydro be able to meet its needs by demand-side management (DSM)? What will happen to the future cost of each type of alternative energy?
The 112 pages of appendices spends a lot of time discussing these options. In a somewhat simplistic fashion, they can be unpacked. Consider, for example, future demand. For the past ten years, our per capita energy consumption has not increased dramatically. On average Canadians used 15,541.5 kWh per year in 2014. In B.C., the number was 10,241 kWh as of June 2017.
This is one of the key features of the DSM: the total consumption has been declining for a number of years. It has decreased from 10,571 kWh in 2014 to its present value. This is a consequence of legislation demanding the use of compact fluorescent bulbs and incentive programs to switch from energy intensive electrical appliances to more efficient ones.
But DSM can only go so far. What happens when all of the light bulbs in the province have been changed and all appliances are low energy? Once we have reached this point, there are no more efficiencies to be gained.
The BCUC report postulates there is enough capacity through DSM to negate the need for Site C or other sources of electricity for the next decade. Beyond that, we will need to have new capacity in the system.
In the meantime, we will have added another 500,000 people to the province or around 200,000 more customers. They will require an additional 2 GWh of electricity or about 40 per cent of the expected output from Site C. That is, growth in population will certainly consume a large portion of the potential savings in electricity generated by altering our lifestyle over the next decade.
This, of course, also assumes there are no significant increases in other electrical demands such as new industries or electric vehicles or digitization of the economy. Indeed, in their analysis the BCUC anticipates curtailing industrial demand in 20 years. Saying to major employers they will need to shut down for some periods of time during the year so that the utility can meet its obligations.
What about bringing on wind farms? There is certainly the capacity in this province to generate significant amounts of electricity using wind-driven turbines.
As someone succinctly put it recently, the north shore mountains above Vancouver would be excellent sites for turbines and the transmission to the city would be very convenient.
Many proponents pointed out the cost of wind turbines has been dropping, but the price will bottom out.
In the end, the BCUC has carried out the best analysis it can, given the uncertainties associated with the industry and the short timeline. It is now up to politicians to make a decision.
