By Roy L Hales

BC Hydro recently slammed the most likely alternative to its proposed Site C Dam project in an interview with the Vancouver SUN. The Crown Corporation’s senior strategic technology specialist, Alex Tu, said some of the projects appear promising but stressed the cost estimates are still “very uncertain” and carry a lot of risk. What Tu did not tell the newspaper is that BC Hydro’s evaluation of Geothermal is outdated.

If BC Hydro Had Been Using Current Data

Alison Thompson, Chair of the Canadian Geothermal Association (CanGEA), tells me that if BC Hydro had been using current data, instead of drilling estimates from the peak of the shale boom in 2012 and currency conversions from last April, they would have found that geothermal is actually a great deal cheaper than the Site C dam.

“They tried to be quite fair, and used an American style economic model, but you are kind of at the whim of the inputs, and I think we would all agree that the inputs were either vastly out of date or significantly incorrect,” she said.

Drilling Costs From 2012

The drilling cost estimates are based on 2012 figures from the US, a peak year for that nation’s shale boom. The Global drilling rates have dropped 30% since then. In more local markets, like Calgary, prices are down as much as 40%.

Furthermore, Thompson points out, “There are lots of drilling companies in northeast BC, as well as Alberta, who would do the job.”

A Three Month Old Exchange Rate

Thus it is not necessary to use US figures and convert them into Canadian dollars with a three month old exchange rate. This is especially misleading when you consider that Canada’s Petrocurrency just hit an eleven year low.

“You can’t take one number out of context and another number out of context and expect the best result,” she said.

CanGEA has until August 7 to go over all the components of the BC Hydro estimate.

However it is already clear that, far from being slightly higher than hydro, when the final figures come in geothermal is likely to be a great deal cheaper.

In the podcast above, Alison Thomson also talks about:

• a Canadian Federal government study on the cost of geothermal
• First Nations & other legal opposition to the Site C Dam, which presents a significant risk that is not present with geothermal
• How geothermal can be added as needed and combined with other energy sources
• How geothermal can use the existing electrical infrastructure
• Why Geothermal is not being used to produce electricity in BC or any other Canadian province.

Top Photo Credit: A Geothermal Site In The Fraser Valley by Tucker Sherman via Flickr via Flickr (CC BY SA, 2.0 License)