This week, the B.C. Utility Commission will be releasing its report on Site C.
They essentially have three options - keep going, suspend the construction, or cancel the project. Their work is to estimate the costs of doing each both in terms of present dollars and future dollars. That is, they are to look at the cost to complete the project as it presently stands with the present construction plans and weigh that against the cost of cancelling the project or suspending construction for a period of time. Each option is expensive.
We already know the project will be over-budget. Some key steps have been delayed and B.C. Hydro has given its cost estimates for these delays. Essentially, the contingency in the budget has already been allocated but we know there will be more down the road.
On the other hand, cancelling the project is not free. If the project is cancelled, contracts will need to be paid out and workers will need to be let go. Then a whole new project will need to start to remediate the site which will be expensive - likely more so than the costs so far.
Even suspending the project for an unlimited period of time has costs. Equipment would need to be idled, sites will start to degrade, opportunities will be lost and restarting would require replacing existing workers and contractors.
None of the options are going to be cheap.
But the BCUC must also weigh the cost of future energy projects which will be required to replace the capacity Site C will generate. We are going to need the energy to grow the economy. The question is where are we going to get it from?
The latter is the tricky part of the equation. Just how much energy are we going to need? And when? And in what form? Predicting the future is fraught with difficulties as so much is educated guesswork.
I say "educated guesswork" because there are some things which can reasonably be modeled or controlled. For example, the population of the province will increase over the next 50 years. By how much is a question of immigration policy, economic growth, increases in the world population, etcetera. Generally, these sort of variables can be reasonably estimated. For example, over the past 10 years, our population has grown by 46,800 people per year, give or take. Assuming this growth rate going forward, and given our current population is 4,817,150, it is reasonable to assume the province will grow to about 7.1 million people in size in the next 50 years.
Of course, if we take the 10 years the NDP was in power from 1990 to 2000, the average increase in population was 71,900 and at that rate, our population will increase to 8.4 million in the same time span. Taking these as the extremes, over the next few decades we will see the population of the province continue to grow and energy demands increase. By 2070, our population will be between seven and eight million people. But how much energy will we need then? Over the last 100 years, the per capita energy demands have doubled to around 244,000 kwh per capita (that is all energy and not just electrical). If we continue with our growth rate, we will have surpassed 300,000 kwh per capita by 2070.
How much of this will be electrical versus fossil fuels? Right now, B.C. Hydro is a minor component of our energy mix - about 18 per cent. If we are going to electrify our economy - from cars to homes to businesses - we are going to have to increase the share of energy generated by B.C. Hydro. Demand will increase.
How do we meet the demand? Arguably, through renewable sources. As advocates for wind and solar power point out, the cost of producing a kwh is decreasing and almost in reach of hydroelectric projects. In theory, we can go a whole new route and not have a grid at all. We could have individual houses and businesses responsible for their own onsite electrical production. But at what cost?
I don't just mean the price of photovoltaics or building a turbine. We need to consider the cost of mining for rare earths, the water used in manufacturing, and environmental impact of remediating sites. Building anything of the size needed to meet the future power requirements of this province is going to have a significant environmental impact.
How do we estimate the impacts of any energy project when too many of the variables are unknown? It will take a lot of "educated guesswork" by the BCUC. It will need to work on existing data and the best knowledge we have.
In the end, none of this may matter. The decision to continue, suspend, or stop will ultimately be a political equation.
