Site C dam project has become 'uneconomic' and should be suspended: UBC report

A new reportis calling for the suspension ofB.C.'sSite C damproject, saying it's no longer going to benefit the provincial economy as once expected and that power from the hydroelectric stationwill likely be exported at losses of up to $1 billion.

Thereporton water governancereleased Tuesdaylooksat which option would be best for B.C. from a business standpoint: cancelling, suspending or finishing the $8.5-billion project.

Ultimately, it recommended the project be put on hold and reviewed by the BC Utilities Commission.

A statement from the UBC researchers said several key changes that have happened since the project's initial approvalmean it isn't the most cost-efficient option for producing power anymore.

First, experts found that alternative options for generating electricity such as wind power and energy conservation have become cheaper.

Secondly,BC Hydro'spredicted demand for electricity has "dropped significantly," according to the report.

Experts said that could meanelectricity from Site C won't be fully needed for nearly 10 years after the project's expected completion date in2024.

The surplus energy wouldneed to be "exported at prices currently far below cost," leading tolosses of at least $1 billion.

Under BC Hydro's forecastdemand, the analysis found, cumulative losses would be nearing $2.7 billion by 2036.

"The business case for Site C is far weaker now than when the project was launched, to the point that the project is now uneconomic," said UBC's Karen Bakker, who co-authored the report."The good news is that we are not past the point of no return, according to our analysis."

The report said suspending the project would save ratepayers up to $870 million. It also said cancelling the project outright by the end of June would save just over $1.6 billion,but the report still recommended a suspension and review.

During a campaign stop in Fort St. John on Tuesday, B.C. Liberal Leader Christy Clark said Site C is still the right option for B.C., given the growing provincial population.

"Growth means our electricity needs to keep up and so we need reliable power.We need it to be affordable powerand we need it to be clean power and the only way to achieve that is throughthe Site CClean Energy project," she told media.

Clark said she hadn't seen the UBC study, but said the hydroelectric project is about meeting the province's energy needs in the future and work has to start now to meet that demand as the economy grows.

"So if the electricity isn't going to be needed for 10 years, when do they expect us to start it? Nine years from now? Eleven years from now?'' she asked.

"I think professional electricity planners in that field are better qualified to make the estimates about how much energy we're going to need in 10 years than academics at UBC who are probably not in the field of electricity use at all.''

2 years into construction

Construction began on the $8.5-billion project near Fort St. John in 2015.

Once completed, the dam will flood an 83-kilometre long river valley, providing enough electricity to power the equivalent of around 500,000homes.

The dam has been strongly opposed by local farms, environmentalists and some First Nations communities. Jobs fairs, however, have drawn hundreds.

In January, the Federal Court of Appeal dismissed a lawsuit from two B.C. First Nations that were trying to prevent the projectfrom going ahead.

By the end of June, BC Hydro will have spent just over $1.8 billion on the hydroelectric station.