Sunday, December 17, 2017

An Economic Argument Against B.C.'s Site C Dam Project

Click here for an article at DESMOGCA (Clearing the PR Pollution), entitled "Why the Site C Dam Fails Economic Test: NDP Critic."

The gist of the article is that Site C was originally proposed by Bill Bennett in 1980. At that time, the government wildly overestimated future demand for power. Had it proceeded at that time:
BC Hydro, its owners (that's us) and its ratepayers (that's us as well) would have lost their shirts. In fact, it would have undermined the very foundations of BC Hydro and the government's finances.
The project was revived under Christie Clark's Liberal government:
The Liberal cabinet has ordered BC Hydro to proceed with the Site C project. In announcing the project, Clark and BC Hydro justified the action by predicting an increase in domestic demand of 40 per cent over the next 20 years. Even with BC Hydro's inflated forecast, according to economist Robert McCollough, Site C will initially be a money loser. Delaying the dam for five years would save $1.19 billion.

However, just as in 1980, BC Hydro's forecast is proving to be fundamentally wrong. Over the past 10 years, energy demand has been flat, even dropping slightly from 2007 to this year.

And since the 2013 energy-demand forecast the government used to justify Site C, domestic demand has cratered.

The reasons for this are numerous — low economic growth, the decline of our energy-consuming pulp and paper and forestry sector, increasing industry energy efficiency, high electricity rates that depress demand, and a small but growing number of consumers who are going “behind the meter” with alternative energy sources. The latter trend is likely to continue to grow in B.C. as it has in our export markets such as California.
Opponents of the project claim that alternative energy sources -- chiefly wind and solar -- are better options:
Moreover, the cost of generating electricity from renewable sources such as solar and wind is going down because of technological and manufacturing advances. There has been massive deflation in the cost of generating electricity.
Flip phone technology, say the opponents:
We are going to be paying for Site C for about 70 years, and we have locked ourselves into a very old technology. Our current dams are paid for and will always be competitive for that reason, but not Site C.

It is like entering into a 70-year contract for a flip phone at exactly the wrong time. In fact, would you sign any high cost 70-year deal for your hand-held device when prices are dropping?
Here's a question that opponents of the project should be asked in polling questions:

“Would you support building Site C at a loss to export power, subsidizing B.C.'s competitors and leaving BC Hydro ratepayers with large domestic rate increases? Would you support Site C if it cost jobs? Would the agricultural land lost to Site C development be worth it then?”


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