The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.
To paraphrase what another politician said about another energy megaproject, British Columbia’s plan to build a new $8.8-billion hydro project on the Peace River is hardly a no-brainer.
Depending on your assumptions about future electricity demand, environmental regulations and market trends, you could make a credible case for the 1,100-megawatt Site C power project that Premier Christy Clark has just green-lighted. But Ms. Clark’s refusal to submit her plan to a review by the B.C. Utilities Commission suggests she’s not especially confident of winning the argument.
This raises a broader credibility problem facing all of Canada’s provincially owned electric utilities. They are run by political appointees who answer to politicians who live to cut ribbons. The utilities are fiercely jealous of their prerogatives as near-monopoly suppliers of electricity and fight incursions by the private sector. When they make the business case for a new publicly financed hydro megaproject, it’s hardly an objective exercise.
So, from Newfoundland to B.C., hydro megaprojects are back in fashion. From Muskrat Falls to Site C – with Quebec’s La Romaine and Manitoba’s Keeyask and Conawapa in between – governments are again betting billions on Big Hydro. But they are confusing economic development with sound energy policy.
There is a reason that, until recently, no major hydro dams had been built in Canada for decades. The most cost-effective sites have already been developed, making Canada the world’s third-biggest producer of hydro power. Most of those previous bets on hydro have turned to gold, leaving Quebec, Manitoba and B.C. with the lowest electricity costs in North America.
But the projects now – or about to be – under construction are much dicier propositions. Hydro-Québec’s average cost of production stands at less than 2 cents per kilowatt-hour. Compare that to the 6 cents (before transmission charges) it says it will cost to generate electricity at its new Romaine 2 generating station that went on line in December. This will boost Hydro-Québec’s average costs at a time when the utility has energy surpluses to burn.
For the rest of this column, click here: http://www.theglobeandmail.com/globe-debate/big-hydros-big-days-are-behind-it/article22288577/