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Gas-fired power plant cheaper than Site C dam

Re: “Site C power dependable, will replace fossil fuels,” letter, Jan. 13.

Re: “Site C power dependable, will replace fossil fuels,” letter, Jan. 13.

Sure, Site C can replace fossil fuels, but at what price? A capital-intensive dam is the worst thing to build as backup for intermittent resources such as solar, wind or run-of-river, because the major expense — debt interest — carries on when the dam sits idle.

Hydro says the $8.8-billion dam will lose $800 million in its first four years of operation, resulting in a $9.6-billion debt.

If long-term interest rates are five per cent when the dam is completed in 2024, the power would have to sell for almost $100 a megawatt-hour just to cover the loan interest, provided the dam produces its projected output of 5,100 gigawatts per year. If interest rates go higher or the dam sits idle for longer periods, the power cost goes even higher.

Meanwhile, the North American market rate for power is projected to be $30 per MWh for years to come, due to efficient combined-cycle gas-turbine power plants and the glut of cheap natural gas. The dam might never pay for itself.

As an interim measure, it would be far cheaper to build a gas-fired power plant as backup until technology can provide clean energy resources that are reliable and affordable.

The major cost of a gas plant is fuel, which drops to zero when the plant isn’t needed.

Martin Cavin

Retired power engineer

Port Moody