Economist reports proposed Site C Dam ‘dramatically’ more costly than BC gov’t claims

Peace Valley Landowners Association commissioned leading U.S. energy economist, Robert McCullough, to look at the business case for what will be province’s most expensive public infrastructure project

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Source: www.theglobeandmail.com

>”Just weeks before BC Hydro plans to begin construction of the $8.8-billion Site C project, a new report says the Crown corporation has dramatically understated the cost of producing power from the hydroelectric dam.

…Mr. McCullough, in his report, said it appears the Crown corporation BC Hydro had its thumbs on the scale to make its mega project look better than the private-sector alternatives.

“Using industry standard assumptions, Site C is more than three times as costly as the least expensive option,” Mr. McCullough concluded. “While the cost and choice of options deserve further analysis, the simple conclusion is that Site C is more expensive – dramatically so – than the renewable [and] natural gas portfolios elsewhere in the U.S. and Canada.”

The report challenges a number of assumptions that led the government to conclude that Site C is the cheapest option. Mr. McCullough noted that the province adopted accounting changes last fall that reduced the cost of power generated by Site C. He said those changes are illusory and the costs will eventually have to be paid either by Hydro ratepayers, or provincial taxpayers.

Mr. McCullough, a leading expert on power utilities in the Pacific Northwest, also disputes the rate that BC Hydro used to compare the long-term borrowing cost of capital for Site C against other projects, noting that other major utilities in North America use higher rates for such projects because they are considered risky investments. The so-called discount rate is critical to the overall cost projections, and he said the paper trail on how the Crown arrived at its figure “can only be described as sketchy and inadequate.”

The report, obtained by The Globe and Mail, will be released on Tuesday by the PVLA.

The group will call on Premier Christy Clark to delay construction to allow time for a review by Auditor-General Carol Bellringer.

Ken Boon, president of the association, said the government needs to put the project on hold because it has approved the project based on poor advice. […]”<

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CanGEA Report Claims Geothermal Creates more Jobs than Site C Dam

a recent report by a canadian industry group that is promoting geothermal energy, thermal energy generated and stored in the earth, says geothermal operations can create more permanent jobs than the site c dam in northeastern b.c.

Source: www.journalofcommerce.com

>”According to Geothermal Energy: The Renewable and Cost Effective Alternative to Site C, 1,100 megawatts – the same amount as Site C – of geothermal power projects would create more sustainable employment for surrounding communities.

“While Site C promises only 160 permanent jobs, U.S. Department of Energy statistics indicate that the equivalent amount of geothermal energy would produce 1,870 permanent jobs. This does not include jobs that result from the direct use of geothermal heat, which are also significant.”

However, said Alison Thompson, managing director of Canadian Geothermal Energy Association  (CanGEA), which published the report, geothermal projects would result in fewer construction jobs than the Site C dam.

“Geothermal projects would be spread around the province, not all on one site,” she said. “And, unlike Site C, they would not be built all at once. They would be staggered, with construction beginning in the highest-priority regions first.”

According to Dave Conway, a Site C spokesman, the $7.9 billion project will create about 10,000 person-years of direct construction employment, and 33,000 person-years of total employment during development and construction.

Construction will take about eight years.  This includes seven years for  the construction itself and one year for commissioning, site reclamation and demobilization.

Thompson said geothermal energy has other advantages over hydro.  “For example, geothermal power has a lower unit energy cost and capital cost,” she said.  “And, the physical and environmental footprint of geothermal is small.”

The CanGEA report says the “strategic dispersion” of geothermal projects will have lower transmission costs than Site C.

“There is every reason to believe that, given the thoughtful and (methodical) development of B.C.’s geothermal potential, geothermal power could provide all of B.C.’s future power requirements at a lower cost to ratepayers than the proposed Site C project.” […]

“For the most part, Canada’s geothermal power sector lay dormant for the following two decades while interest in the industry continued to grow outside of Canada’s borders.” […]”<

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