Peace River dam provides a powerhouse of opportunity

David Black
Special to the Sun
Thursday, April 08, 2004

Recently The Vancouver Sun ran a front-page story that detailed concerns about the development of a potential power source, the Peace River dam known as Site C (BC Hydro resurrects Site C dam proposal, April 2). There is, however, another side to the story.

The Site C project is a major one. It will yield 900 megawatts of power, roughly 10 per cent of B.C.'s existing generation, which can be pre-sold for export or used within the province to replace power B.C. currently imports. The dam and power line construction will provide 8,000 person-years of much needed employment. The jobs will be filled by workers from all over the Interior and the north.

Site C is our least expensive source of large-scale new power generation. The over-all cost of the project is $2.2 billion and can be 100-per-cent self-financed by pre-selling the power for export, resulting in little financial risk. There will be a positive return on the initial investment.

The reservoir will flood 5,000 hectares, 500 of which are farmland. BC Hydro already owns the land. The project will replace the need for an equivalent amount of generation that could exacerbate global warming.

The B.C. economy has underperformed for much of the last two decades and lagged behind the Canadian average for growth of real GDP per capita (the total amount of goods and services produced expressed on a per person basis) in 15 of the last 20 years.

B.C. Progress Board evaluations also show that B.C.'s export performance has trailed all other provinces on a relative basis. From 1993 to 2002, BC had the lowest average annual improvement in its exports per capita. A growing economy and strong export performance are critical to raising incomes for citizens and providing a stable funding base for health, education and other social programs.

Site C will inject $2.2 billion into the economy. Development risks are low. Financial returns can be guaranteed. Low-cost financing will be easy to obtain against the economics of the dam. This is the best sort of governmental pump priming because it's a strategic investment and requires no government funding.

The first step is to pre-sell the power. Transmission lines outside of B.C. limit opportunities, but California is one possibility. Apparently, suppliers in Alberta are offering California power from new coal-fired thermal plants.

On the environmental side of the ledger, there are no salmon in the Peace River. There are already two hydroelectric reservoirs just upstream of the Site C location, so it is no longer a natural, wild river by any stretch of the imagination. The required reservoir is not small, but neither is it large compared to many others in B.C. It is equivalent to a square area of seven kilometres by seven kilometres, or only three per cent of the reservoir area behind the upstream W.A.C. Bennett dam.

North America needs more power. Most provinces and states have no choice but to develop less environmentally friendly options. Site C hydroelectric power generation will help meet domestic and export market demand, while keeping to a minimum the province's contribution to global warming and climate change. Given the range of available options, most observers will agree that developing our hydroelectric power capability is a positive choice from an environmental perspective.

Hydro development is a financially low-risk method of creating employment and injecting much-needed liquidity into our economy. The public has little faith in public megaprojects, but BC Hydro's skill at dam building is well recognized. North America needs the power. Environmentally, hydroelectric generation is the best option.

David Black is the chair of the B.C. Progress Board. The board is an independent panel of 18 senior business and academic leaders formed in July 2001 by Premier Gordon Campbell to evaluate B.C.'s economic, innovation, education, environment, health and social progress, and to provide strategic advice on ways to improve the province's economic performance.

© The Vancouver Sun 2004