British Columbia

Site C dam project has become 'uneconomic' and should be suspended: UBC report

Analysis says project is no longer going to benefit the provincial economy as once expected

Site C Dam

By the end of June, BC Hydro will have spent just over $1.8 billion on the Site C project. (Christer Waara/CBC)

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A new report is calling for the suspension of B.C.'s Site C dam project, saying it's no longer going to benefit the provincial economy as once expected and that power from the hydroelectric station will likely be exported at losses of up to $1 billion.

The report on water governance released Tuesday looks at which option would be best for B.C. from a business standpoint: cancelling, suspending or finishing the $8.5-billion project.

Ultimately, it recommended the project be put on hold and reviewed by the BC Utilities Commission.

A statement from the UBC researchers said several key changes that have happened since the project's initial approval mean it isn't the most cost-efficient option for producing power anymore.

First, experts found that alternative options for generating electricity — such as wind power and energy conservation — have become cheaper.

Site C dam

The UBC report says that under BC Hydro's forecasted demand for electricity, cumulative losses would be nearing $2.7 billion by 2036. (Christer Waara/CBC)

Secondly, BC Hydro's predicted demand for electricity has "dropped significantly," according to the report.

Experts said that could mean electricity from Site C won't be fully needed for nearly 10 years after the project's expected completion date in 2024.

The surplus energy would need to be "exported at prices currently far below cost," leading to losses of at least $1 billion.

Under BC Hydro's forecast demand, the analysis found, cumulative losses would be nearing $2.7 billion by 2036.

Clark B.C. Election 2017

B.C. Liberal Leader Christy Clark made a campaign stop in Fort St. John on Tuesday. (Christer Waara/CBC)

"The business case for Site C is far weaker now than when the project was launched, to the point that the project is now uneconomic," said UBC's Karen Bakker, who co-authored the report. "The good news is that we are not past the point of no return, according to our analysis."

The report said suspending the project would save ratepayers up to $870 million. It also said cancelling the project outright by the end of June would save just over $1.6 billion, but the report still recommended a suspension and review.

During a campaign stop in Fort St. John on Tuesday, B.C. Liberal Leader Christy Clark said Site C is still the right option for B.C., given the growing provincial population. 

"Growth means our electricity needs to keep up and so we need reliable power. We need it to be affordable power and we need it to be clean power — and the only way to achieve that is through the Site C Clean Energy project," she told media.

Clark said she hadn't seen the UBC study, but said the hydroelectric project is about meeting the province's energy needs in the future and work has to start now to meet that demand as the economy grows.

"So if the electricity isn't going to be needed for 10 years, when do they expect us to start it? Nine years from now? Eleven years from now?'' she asked.

"I think professional electricity planners in that field are better qualified to make the estimates about how much energy we're going to need in 10 years than academics at UBC who are probably not in the field of electricity use at all.''

2 years into construction

Construction began on the $8.5-billion project near Fort St. John in 2015. ​

Once completed, the dam will flood an 83-kilometre long river valley, providing enough electricity to power the equivalent of around 500,000 homes.  

The dam has been strongly opposed by local farms, environmentalists and some First Nations communities. Jobs fairs, however, have drawn hundreds.

In January, the Federal Court of Appeal dismissed a lawsuit from two B.C. First Nations that were trying to prevent the project from going ahead.

By the end of June, BC Hydro will have spent just over $1.8 billion on the hydroelectric station.

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