Does B.C. need the Site C dam? Let's look at future energy demands

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      Any minute now, B.C.’s NDP government is expected to announce its decision on the future of the Site C hydroelectric dam.

      It’s a lot of B.C. Hydro ratepayers’ money that’s at stake. The Crown utility estimates the cost of the megaproject at $8.8 billion including a contingency fund, but a recent B.C. Utilities Commission review found that it could surpass $10 billion. So far, a couple of billion dollars has already been sunk into the site.

      In addition, its location on the Peace River near Fort St John has attracted loud opposition from conservations and First Nations groups. They argue the project’s benefits won’t offset its environmental costs.

      The Site C dam, which is supported by B.C. Hydro and was championed by the previous Liberal government, is an idea that’s attracted controversy for decades. In recent years, many British Columbians increasingly rank environmental considerations higher among voting priorities, and the dam has become a lightning rod for controversy and heated political rhetoric.

      One of the most contested questions surrounding the dam is whether or not the province actually needs it. Will we require the electricity that Site C will produce?

      Here are three sources of information that point to an answer.

      Exhibit A comes from a report commissioned by the B.C. Utilities Commission and prepared by Deloitte LLP, one of the world’s largest private accounting and research firm.

      The graph shows various load forecasts that B.C. Hydro has published over the years and how they compare to actual energy requirements in B.C.

      Deloitte LLP

      “BC Hydro’s load forecasts have performed better in the short-run compared with the long-run,” it reads. “Averaging over all point estimates from models starting in fiscal 1964 shows that forecasts in the first full year were overestimated on average by 1.7% of actual loads. Five-year forecasts were overestimated on average by 4.5% of actual loads, 10-year forecasts were overestimated on average by 12.2% of actual loads, 15-year forecasts were overestimated on average by 18.0% of actual loads, and 20-year forecasts were overestimated on average by 30.8% of actual loads.

      “BC Hydro’s load forecast methodology has changed several times since its forecast in fiscal 1964,” it continues. “However, the magnitude of overestimation has not decreased over the 10-year and 15-year horizons, but has increased somewhat for the first fully forecasted year and over a 5-year horizon.”

      B.C. Hydro took issue with that report.

      The following graph comes from an October 2017 BC Hydro submission to the B.C. Utilities Commission.

      BC Hydro

      Alongside that graphic, BC Hydro wrote: “BC Hydro’s low load forecast projects even lower growth than Deloitte’s “alternative” load scenario, even if we take Deloitte’s flawed analysis at face value. Figure 2-4 below shows the Deloitte scenario relative to BC Hydro’s high, mid and low forecasts for fiscal 2026 and the low load scenario.

      “BC Hydro’s sensitivity analyses (described further in section 6 and the response to BCUC IR 2.46.0) demonstrate that even under BC Hydro’s low load scenario, new energy and capacity resources are needed, and the most cost-effective option is to proceed with Site C.”

      The third graph we’ll look at is another BC Hydro report submitted to the B.C. Utilities Commission, this one from August 2017.

      BC Hydro

      “Our Current Load Forecast identifies continued load growth,” the report reads. “As shown by Figure 8, while the recession of 2008 resulted in a decrease to customer load, since that time load growth has resumed and has been substantial on a before-DSM [demand-side management] basis.

      “The Current Load Forecast continues to predict material long-term load growth across our three main customer groups (residential, light industrial/commercial and large industrial) within a range of uncertainty.”

      There’s a lot up for debate in these three images. But two points appear clear enough.

      One, that BC Hydro has repeatedly overestimated long-term demand for power across the province.

      And two, that there will likely be some increase in demand for electricity over the long term, but how much is a difficult question to answer. Furthermore, it appears that demands for power are not increasing as fast as they once did.

      Whether or not a project the size of the Site C dam is required to meet increases in demand will likely continue to be debated long after the NDP’s decision on the project is announced today (December 11).