The cost effectiveness of new reservoir hydroelectricity: British Columbia’s Site C project

Large-scale, reservoir hydroelectric facilities can play an important role in decarbonizing the electricity sector. However, new are costly, and several recent projects Canada have been subject to cost over-runs. In this paper, we develop a methodology for evaluating cost-effectiveness of projects. We apply case study Site C project currently under construction British Columbia, Canada. Our approach makes use purpose-built linear programming capacity expansion dispatch model, resolved at hourly frequency incorporating detailed treatment balancing area requirements, available wind solar resources, watershed constraints on potential, endogenous trade. simulations reveal that value is unlikely exceed its total cost, only exceeds avoidable cancellation scenarios where BC Alberta build additional inter-provincial transmission aim 100% decarbonization their systems. provides cautionary tale policymakers planners pursuing large hydro-electric Potential over-runs render uneconomic relative alternatives. The decision complete justified by high sunk costs.