B.C. Government Approves Site C Clean Energy Project
On December 16, 2014, the B.C. government approved BC Hydro’s Site C Clean Energy Project (Site C), concluding that the 1,100-megawatt hydroelectric project represents the province’s most affordable and reliable long-term source of clean power, saving ratepayers an average of $650 to $900 million each year over the first 50 years of its project life compared to a portfolio of independent power projects backed up by natural gas-fired generation.
A copy of the B.C. government’s press release, which includes links to relevant background materials, is available here.
The B.C. government also confirmed that the capital cost estimate for Site C has been updated from $7.9 billion to $8.335 billion, and that an additional $440 million project reserve has been established to account for contingencies over the anticipated eight-year construction period, for a combined total of $8.775 billion. Based on these revised cost projections and other changes implemented as part of the government’s 10 Year Plan for BC Hydro, BC Hydro estimates the updated Site C cost to ratepayers to be $58-$61/MWh, compared to a cost to ratepayers for energy produced by independent power projects (IPPs) of $85-$91/MWh. An important component of this cost differential is a $26/MWh reduction for Site C attributed to the reduced net income requirements imposed on BC Hydro under its 10 Year Plan. When taking into account additional factors, including the cost of backing up intermittent power with firm energy sources and the ability of BC Hydro to store energy and to export power when pricing is favourable, the B.C. government determined the final cost to ratepayers to be $64-$67/MWh for Site C compared to $110-$130/MWh for IPPs. These findings are in sharp contrast to a recent study commissioned by Clean Energy BC which concluded that an IPP portfolio could save the province between $750 million and $1 billion over 70 years relative to the cost of Site C.
In response to concerns that Site C’s labour requirements could potentially conflict with those of B.C.’s new LNG industry, the B.C. government noted that the labour requirements for Site C and the LNG industry are “largely different”, citing studies conducted by BC Hydro and the Ministry of Jobs, Tourism and Skills Training which indicate that Site C’s workforce will be weighted toward heavy equipment operators, while the LNG industry will have a greater reliance on skilled trades.
Construction of Site C, which received provincial and federal environmental approvals in October 2014, has been delayed until summer 2015 in order to complete the project’s permitting process. In addition, the project faces significant opposition from various stakeholders, including landowners and First Nations in the Peace Region, several of whom launched a court challenge against Site C.
Site C will be the third dam and hydroelectric generating station on the Peace River in northeast B.C., and following its expected in-service date of 2024 will produce about 5,100 gigawatt hours of electricity each year – enough to power the equivalent of about 450,000 homes per year. In accordance with the province’s Clean Energy Act, Site C would be the last major hydroelectric project to be undertaken by BC Hydro.
BC Hydro Peace River Site C