THE REAL COST OF CLEAN AND GREEN.

If you’re looking for an example of green and clean energy policy in action, let’s take a walk around British Columbia’s massive $ 10-12- billion hydro dam project. Officially described as the “Site C Clean Energy Project” by its developer, B.C. Hydro, the project on the Peace River — some 1,185 kilometres by flying crow north of downtown Vancouver — is unfortunately a little messy and unstable at the moment, so watch your footing, and your wallet.

Under foot, according to Premier John Horgan, “there is instability on one of the banks of the river.” Early last year B.C. Hydro identified “structural weaknesses” in the project, which has been under construction since 2015. Site C is also said to suffer from “weak foundations.” Vancouver Sun columnist Vaughn Palmer recently reported that new information on the precariousness of the project, structurally and financially, continues to beg the question: Should Site C be killed and the $ 6- billion already sunk into it be abandoned?

Yes, says a new paper. In a review of the economics of the Site C hydroelectric project, three Canadian university economists — Brett Dolter in Regina, Kent Fellows in Calgary and Nic Rivers in Ottawa — conclude that the whole project is uneconomic as an energy source and fails its major green and clean promise, which is to reduce carbon emissions.

The worst numbers in the study: the net present value of the electricity produced from Site C is estimated at $ 2.76- billion against an estimated total cost of $ 10.7- billion, implying a loss of $ 8- billion. That’s bad. However, if the project were cancelled now, the loss would be cut in half to maybe $ 4.5- billion. The economists conclude that “policy- makers should stop throwing money at a project that is likely to end up under water.”

Good strong conclusion. But there’s a caveat. Maybe, add the economists, just maybe Site C could be justified if the $ 10.7- billion current estimate project cost could be rolled into a massive national overhaul of the Canadian electricity system. In the words of the paper:

“In summary, we find that Site C can offer value, but only if the provinces aim for near complete electricity system de- carbonization and only if new transmission between provinces can be built to enable greater inter- provincial electricity trade. Decisions about the future of Site C should be made in this light; if it is not possible to commit to fully decarbonizing electricity generation, and if prospects for inter- provincial transmission are low, Site C offers little value in comparison to its costs. In contrast, if BC and Alberta are committed to achieving a zero- carbon electricity system, and building new inter- provincial transmission lines is feasible, then Site C can offer value in excess of its costs.”

So here’s their plan. To make Site C viable, B.C. and Alberta should adopt a stringent 100 per cent electricity de- carbonization scenario, including higher carbon taxes to squeeze coal and gas out of their electricity systems. The plan would also involve the construction of major transmission lines to move Site C power to Alberta. If this could be done, according to their “linear programming optimization model,” the value of Site C “increases to $12.4-billion in present value,” making the project viable based on the current $10.7-billion cost estimate.

Whether any of this really makes sense is another matter. The question is whether Site C should be allowed to continue as an $8-billion loss or made viable by somehow passing the costs on as part of a national effort to meet net-zero green and clean carbon targets.

It’s hard to imagine politicians are going to kill the project at this stage, but it is also hard to see how Alberta is going to go along with paying high prices for B.C. electricity to bail out B.C. Hydro.

Whatever happens to Site C, it serves as an alarming demonstration that the current mad dash to net zero carbon emissions is filled with economic peril. Similar hydro power fiascos — each conceived as green substitutes for fossil fuels — include the $10-billion Keeyask project in Manitoba and the giant $ 12.7- billion Muskrat Falls money pit in Newfoundland.

Chances are there is much more economic madness to come in the policy rush to remove carbon from the Canadian energy system. The hydro power promoters are now being overtaken by advocates of new energy systems that will also require massive amounts of government and industry spending with far from certain outcomes.

Under federal oversight, two new technologies are clamouring for subsidies and regulatory favours. Last month Ottawa released a “hydrogen strategy,” a plan assembled by Canadian hydrogen industry lobbyists marketing their green and clean energy concepts.

Also under federal guidance, more than 50 companies, consultants and others are promoting nuclear power as one of the main sources of electricity in the coming net- zero economy. Canada’s Small Modular Reactor program ( SMR), also outlined in greater detail last month, “brings together essential enabling partners, leveraging their strengths to lock- in these benefits and lead the world on SMRS.”

So far, both hydrogen and SMR technologies are still infants in the energy business compared with the giant hydro power operations managed by Canada’s provincial utilities. They are also tiny compared with the “renewable” energy offered by solar and wind in provinces such as Ontario.

But the boondoggle status of the Site C, Muskrat Falls and Keeyask hydro projects should keep everyone alert to the perils of green and clean energy policy.