In a previous post I discussed why energy efficiency was not going to be the cheap and easy way to address BC’s electricity needs. Well a number of activists have challenged me on that topic. They argue that we have only scratched the surface on the road to energy efficiency and that more can be accomplished. My response to them is yes, more efficiency is possible, but at a cost of more societal inequality and higher energy costs. To put it another way, if your argument against Site C is that shelving the project will save you money on your energy bill then you are barking up the wrong tree. In this post I will expand on that message.
As I have previously written, in the last 25 years British Columbians have done a great job of reducing our per capita energy use. Through the Power Smart program BC Hydro has managed to keep our energy demand steady while our population grew. They did this by encouraging us to replace, or get rid of, inefficient appliances (the Energy Star program); being Energy Wise at home and at work; and by encouraging electricity conservation by doing things like getting rid of incandescent lights.
Another way we have reduced our electricity use has been by relying on natural gas for things like heat and hot water. I remember when they brought natural gas to Victoria. While it was inconvenient (as they installed all the pipelines and caused us to buy new appliances) it was great because our new natural gas water heater and furnace dropped our hydro bills precipitously. We paid off those appliances before we knew it because gas was so much cheaper than hydro.
Well one of the steps in achieving our Paris Agreement goals is getting us off natural gas and back to using electricity to heat our homes, cook our meals and heat our hot water. The drive to build highly efficient passive homes will certainly reduce the total amount of energy needed to heat our homes but it does nothing about cooking food or heating water. That will be done using electricity which will drive up demand for electricity just as we come to grips with the problem that the water running through BC Hydro’s dams can only supply a fixed amount of electricity at any given time. As our population continues to grow either we will need to find more supply (like building Site C) or we will need to reduce our maximum usage.
The activists argue that we can use renewables to supply that electricity. I agree but point out some limitations with that approach. The first is that given solar insolation values, much of BC is restricted on how much energy can be generated by solar panels. Certainly, solar can serve a useful purpose in the interior (in summer) but on the coast (and during winter) solar panels will often supply little or no electricity and solar panels are entirely useless in the dark. This brings us to the current dilemma in the renewable energy field “the duck curve”.
For those of you not familiar with the term “the duck curve” is a way of describing the supply/demand challenges associated with renewable-heavy electricity systems over the course of the day (good explainer here). The problem is that the sun and wind don’t generally supply power when people need it the most. Most solar electricity is generated in the heat of the day when families are at work or school and household use is at its minimum. Then, just when the sun goes down, everyone goes home and power demand spikes. This happens when families get home after work/school and turn on the air conditioners/heaters; set their ovens to cook dinner; give their kids their evening baths before bed-time; and turn on their family electronics. All this household use drives up demand right when the supply of renewable energy is at its lowest (in the early evening). This makes a shape of the demand curve go upward in a way that look a lot like the neck of a duck. This demand is met by our electrical system by ramping up peaker power plants to cover the spike in demand. Unfortunately if you don’t have any spare capacity lying around things can get very tricky very quickly.
In a world without natural gas or nuclear peaker plants the duck curve will need to be addressed by either “flattening the duck” (by reducing that demand) or using storage (charging batteries during the day and then using that battery power when demand is at its peak). Unfortunately for British Columbians, this second option will not be of much use. If you live in Vancouver, in February, then your solar panels won’t generate enough charge during the day to be of any use in the early evening.
This leaves us with the less palatable option, we must reduce demand during peak hours. How do British Columbian’s create efficiencies in a system that is already quite efficient? The answer is what the activists have been careful not to discuss. Absent more supply (like Site C) this will be done through “load-shifting”, “demand response” and “dynamic pricing”. These terms all mean essentially the same thing: rationing through price. All involve making power more expensive when demand is high in order to discourage its use. Under these programs, you price electricity in shorter increments (by the minute/second) with price peaking when demand is highest. This is supposed to cause users to avoid electricity-intensive activities at that time so that demand doesn’t exceed supply. How will BC Hydro do this? Well we all have smart meters on our houses so they already have the tools to charge a premium based on time of use.
I am one of the lucky ones. My wife and I have good jobs. If the price of energy rises at dinner time, we will find a way to make do. Our kids won’t be eating cold cereal for dinner nor skipping baths to save money. But that will not be the case for everyone. Come late February when the days are dark and the nights cold the cost of giving your kids a hot dinner and a warm bath before bed will simply be too much for many families to afford. Now I can hear a lot of readers complaining that I am telling a scare story. That is absolutely the case. The scariest stories are the ones that cut closest to home and the reality is that, absent more supply, the way we will have to cut our demand is by pricing some users out of the market and who gets hurt most when price becomes a premium? The poorest.
As a side-note there is an alternative to the free-market approach, but that is even less palatable. This would involve strict rationing where the government decides how much power each household gets or shuts down power altogether. This is not a scenario I’m interested in discussing at this time.
Going back to the title of this post. The use of price to address demand is the secret to the next generation of energy efficiency initiatives. It is something the activists understand but choose not to discuss because doing so will reveal the inequity inherent in this approach. It places an undue burden on those least able to afford that burden.
Having revealed this issue, let’s bring this story back to Site C. As I have written many times, Site C is not the perfect tool to address our anticipated energy needs, but in my opinion it is the best of the options out there because of a number of facts:
- It takes advantage of its location downstream of two other dams to reduce its reservoir size compared to its capacity. Its reservoir will occupy much less space than a comparable dam elsewhere.
- Its location downstream of two other dams means it will not have the sediment issues seen in other dams. Sediments are a serious concern in dams because it is the deposition of fresh sediments that results in methane emissions in dam reservoirs. Absent new sediment deposition the reservoir at Site C is anticipated to essentially cease producing methane after about 10 years of operation and as such Site C energy will have a very low-GHG footprint.
- Its proximity to existing transmission infrastructure means it will not cost as much to connect to the transmission system.
- From a cost perspective it will provide cheaper energy than the renewable options, especially when one factors in transmission costs.
- Its power is dispatchable which increases its value as renewables start to make up a larger slice of the energy market.
- It is secure and will belong to British Columbians, which means that when regional energy supplies are short we won’t be out there trying to buy energy in a sellers market.
On the down-side there are serious issues associated with Site C:
- There are still unsettled issues with indigenous peoples in the region. While BC Hydro has the agreement of many of the local nations there is still work to do the ensure that the people of the Peace do not bear an undue burden to provide BC with our electricity.
- It will flood good land and will have ecosystem effects including damaging some fisheries. Admittedly the amount of land being flooded is less than would be necessary elsewhere but good farmland will be flooded to make the reservoir possible.
- Habitat fragmentation in the Peace is a serious concern and Site C will further exacerbate that problem.
Looking at the two lists I believe that the pros outweigh the cons and it should be possible, through government action, to help mitigate the negatives associated with the dam. This is especially important because the alternatives are so unpalatable. Those alternatives sound good when spoken of in abstract: energy efficiency, renewables… who can be against those concepts.? The problem is they are not nearly as benign in practice. Renewables are still a lot more expensive than Site C and the arguments for them only make sense if the costs continue to decrease markedly over time and even then these costs ignore the transmission system upgrades necessary to get those renewables to the grid. As for efficiency, as I discussed above what energy efficiency really means is more social inequity with the burden of fighting climate change being unfairly borne by the poorest and least able among us.
Put in the simplest of terms, to address our future energy needs we can choose to increase capacity (through Site C) or increase efficiency. From a costs perspective increasing capacity is a cost borne by our society while increasing efficiency is a cost borne by the individual. What further swings this decision to the capacity side of the ledger is the reality that those efficiency gains will be disproportionately borne by the poorest among us.