The Economics of the Site C Hydroelectric Project in British Columbia

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See all articles by Brett Dolter

Brett Dolter

University of Regina

G. Kent Fellows

University of Calgary - The School of Public Policy

Nicholas Rivers

University of Ottawa - Graduate School of Public and International Affairs

Date Written: December 3, 2020

Abstract

The Site C hydroelectric project is an 1100-Megawatt hydroelectric facility under development on the Peace River in British Columbia. Construction costs for the project are currently estimated to be $10.7 billion. The project has been criticized for its high cost and the impacts it will have on the river system, including the flooding of land to establish the reservoir. Project proponents argue that Site C will provide low-carbon electricity that will help BC and Canada reach their greenhouse gas emission reduction goals. In this paper, we assess the cost-effectiveness of the Site C project using a detailed linear programming capacity expansion and dispatch model of the British Columbia and Alberta electricity systems. Our model includes hourly electricity demand data for sixteen sub-regions within BC and Alberta, hourly wind resource data for 681 grid cells in the two provinces, hourly solar irradiation data from 112 weather stations to characterize the solar resource, and a detailed hydroelectric model that accounts for the chaining of hydroelectric facilities and reservoirs within the Peace River, Columbia River, Kootenay River and Bridge River watersheds. We assess the value of the Site C project by calculating the optimal electricity system for supplying BC and Alberta electricity demand in 2030 both with and without the presence of the Site C project. Our model simulations reveal that under current electricity sector policies, the Site C project is uneconomic. We find that the value created by Site C only exceeds its costs in scenarios where BC and Alberta coordinate electricity markets, build additional transmission capacity, and work to reduce greenhouse gas emissions significantly below baseline levels.

Keywords: Electricity, climate change, transmission, decarbonization

JEL Classification: Q4,Q54

Suggested Citation

Dolter, Brett and Fellows, G. Kent and Rivers, Nicholas, The Economics of the Site C Hydroelectric Project in British Columbia (December 3, 2020). Available at SSRN: https://ssrn.com/abstract=

Brett Dolter (Contact Author)

University of Regina ( email )

Regina, Saskatchewan
Canada

G. Kent Fellows

University of Calgary - The School of Public Policy ( email )

Calgary, Alberta
Canada

Nicholas Rivers

University of Ottawa - Graduate School of Public and International Affairs ( email )

75 Laurier Avenue East
Ottawa, Ontario K1N 6N5
Canada

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