Tuesday, December 23, 2014

Buy high, sell low - make up losses with volume

Is B.C.'s Site C dam a gateway to dirty energy?, Calyn Shaw, CBC News Network, December 22, 2014
The provincial government has made it clear that Site C is about meeting future electricity demands. But the province is currently energy self-sufficient; we are a significant net exporter of power.

According to BC Hydro's own growth forecasts, by 2024, the annual energy demand, after the current conservation plan, will almost equal the projected annual energy supply — without Site C.

This would seem to indicate that when Site C comes online, almost all of the 5,100 gigawatt hours of electricity produced annually will be in excess of projected demand within the province.

So, where will this power go?
The CBC analysis suggests two possibilities: Power for LNG operations in British Columbia or power for tar sands extraction.

Clearly, Site C is not intended to meet the needs of existing BC Hydro customers. As noted, demand and supply are in balance for the next decade, even without aggressive efforts of conservation, the greenest solution to energy shortages.

There is another source of electricity readily available. It is Revelstoke Unit 6


The above is from a BC Hydro factsheet. At $420 million, Revelstoke Unit 6 would provide almost half of the output of the $8.8 billion Site C dam.  This represents the capital cost per-megawatt, but excludes the social costs of destroying prime farm lands and disrupting lives of First Nations:


Is there a business case that would prioritize Site C over Revelstoke 6, a facility that would face almost no opposition? If there is a detailed business plan, it has not been disclosed by the provincial government.

BC Hydro has been contracting with independent power producers at prices in the $110-per-MWh to $130-per-MWh range. Site C was projected to cost between $87 and $95 but that was before its capital budget increased by 11.4%. Electricity sales agreements with industrial users, in place and proposed, exceed BC Hydro's projected costs. Perhaps the Liberals believe the apocryphal story about making up for losses on every unit by selling more units.

Seriously though, the government's energy policy does not pass the smell tests that citizens are likely to apply. The questions to answer:
  • Why proceed with a project that produces power at almost 10 times the cost of a simpler alternative?
  • Why create capacity that is to be sold below cost?
  • Is there a comprehensive business plan that justifies proceeding with Site C in 2014?
  • Is there a comprehensive business plan that justifies provision of below-cost power to industrial users.
  • Is clean hydro power intended to facilitate carbon-saturated emissions?


Who needs Revelstoke power, when we have IPP and Site C contractor friends to reward.







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11 comments:

  1. Made in BC Hee Haw

    Site C to provide more than 100 years of affordable, reliable clean power

    News release
    Backgrounder: Growing demand
    Backgrounder: Site C capital cost estimate
    Backgrounder: comparing the options:
    Backgrounder: about site C:
    Backgrounder: labour requirements for Site C and LNG:

    ReplyDelete
  2. The questions you ask can all be answered by the answer to the third: “Is there a comprehensive business plan that justifies proceeding with Site C in 2014?”

    The answer is yes. Please contact SNC Lavalin and/or Kiewitt Flatiron GP for a copy.

    ReplyDelete
    Replies
    1. Ding Ding ! We have a winner.
      Cheap power for LNG and a huge puddle of free water to drink from are desirable .
      But the construction of the huge debacle pays large. I wonder if Christy has connections in the white elephant industry ?

      Delete
  3. Norn;
    Nothing to do with the post; I just wanted to jump in before you shut 'er down for Christmas.
    I extend to you and all your family, the very best wishes for the holidays and in the years ahead.

    Thank you so much for all the work you put in to keep us informed. I don't know how you do it and still have a life.

    Regards.
    Hawgwash

    ReplyDelete
  4. Norm, I'll echo Hawgwash's sentiments. Thanks very much for what you do.

    BTW, good interview today on CFAX. Great to hear your information presented on the air. Only complaint is it was too short and once a month is not often enough. Here's hoping duration, frequency, and venues improve. As if you haven't enough to do:-)

    ReplyDelete
  5. A very gentle Thank You
    and Merry Christmas.

    ReplyDelete
  6. This province is so screwed under this Liberal regime.

    We need to recall 8 Liberal MLA's and take back majority of the Legislature before it's too late!

    ReplyDelete
  7. Quote:
    "After a bumper year for precipitation in the Pacific Northwest, BC Hydro stations around British Columbia are sitting idle while independent power producers run flat out."

    http://www.vancouversun.com/technology/Hydro+awash+private+power/6605915/story.html

    ReplyDelete
  8. http://commonsensecanadian.ca/ipps-even-worse-rip-off-site-c-dam-sfu-economist-warns/

    http://commonsensecanadian.ca/REPORTED_ELSEWHERE-detail/industrial-energy-expert-bc-govt-policy-ipps-blame-high-power-bills/

    ReplyDelete
  9. http://blogborgcollective.blogspot.ca/2014/12/is-there-oligopoly-gist-for-bc-hydro.html

    ReplyDelete

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