Charles asked me to look at this WUWT reader Earthling2’s submission.
Having done so, the saga is so loaded with ironies that this guest post resulted.
Site C is a (very troubled) hydroelectric dam under construction on the Peace River in NE British Columbia (BC) in Canada. It will have 900MW of installed capacity—about equal to two medium-sized advanced CCGT costing about $2.2 billion according to EIA December 2020 (more on this irony below). The newly reported decision NOT to cancel a now $16 billion ‘geotechnically challenged’ dam originally projected in 2014 to cost ‘only’ $8.3 billion (plus $400 million contingency) was made for two newly announced reasons: too much sunk cost, and CLEAN energy. Harvard Business School taught me to NEVER throw good money after bad; sunk costs are irrelevant to future investment—except to BC politicians excusing a long history of poor Site C decisions.
Site C was one of four hydro locations along the Peace River originally proposed in the mid-1950s. Two were built. A serious look at Site C in the early 1980’s concluded it was neither economic nor needed. It was revived in 2014 on green grounds despite another pre-construction study finding BC did not need the electricity. It would all be exported to the US (California), and at CA wholesale electricity prices would return BC over its life about $1.8 billion, leaving BC ratepayers on the hook for about $7 billion—a very bad deal even at the outset.
BC politicians pushed ahead anyway, despite strong opposition from First Nation Tribes and the BC Green Party since the dam would flood much fertile Native Canadian farmland along the lower Peace. A Tribe Treaty lawsuit still pends.
The then ruling BC Liberal Party pushed to get the project to the point of no return before the 2017 election. They did so—but lost anyway. Doing so was a BIG mistake, because actual construction started before finishing the preconstruction dam foundation civil engineering. Which is why Site C is ‘geotechnically challenged’. Its shale bedrock isn’t stable, and the roughly $8 billion cost overrun from 2014 is necessary to stabilize the dam’s foundations.
That the bedrock under Site C wasn’t stable did not need a completed civil engineering study to figure out. That same Site C shale, southeast of the dam site, is home to major shale gas fracking operations—which ironically could have provided cheap gas to those two medium sized CCGT, which in turn could have saved First Tribes farmland AND ~$14 billion. Because of the fracking and accompanying wastewater reinjection, the area has been subject to increasing swarms of small to medium fracking induced earthquakes—just like Oklahoma. In 2017-2018 alone, 6551 quakes greater than Richter 0.8—compared to ‘only’ 71 registered in the Canadian earthquake database! A paper at PolicyNotes.ca contains the following map of the area for those two years.
Their politicians also just told BC ratepayers that it will all be ‘OK’ after the dam is finally completed in 2025. That is because Site C’s clean hydro is dispatchable. It will enable higher future wind turbine penetration—which would further reduce its hydroelectric output and worsen its awful economics. Last I checked NE BC also has a heck of a lot worse winter weather than Texas, so adding future unneeded wind is beyond ironic. But BC will finally have truly green energy to export to California at a big financial loss—since according to the California PUC new hydro and new pumped hydro storage are NOT green.
Everything about Site C teaches the folly of Green New Deals. It is plainly a Green BAD Deal.
Credit: Source link