Muskrat Falls megahydro cost increases

The Canadian province of Newfoundland and Labrador is promoting the development of a multi-phase, gigawatt-scale hydropower project on the Churchill River in Labrador.  But estimates of the so-called megaproject's construction costs continue to mount, now reaching nearly $7 billion (Canadian).

The Churchill River drains much of western Labrador, combining large volumes of water with a significant drop in elevation.  For these reasons, Canadian provinces and utilities have long sought to harness its power.  In 1971, the Churchill Falls dam and hydropower plant came online; today, the Churchill Falls facility can generate 5,428 megawatts of power, giving it the second largest capacity of any power station in North America.

In 2010, Newfoundland and Labrador utility Nalcor Energy and Nova Scotia utility Emera announced the Lower Churchill project.  The first phase proposed, Muskrat Falls, entails the construction of a dam with an 824 megawatt power house, with the subsequent Gull Falls dam bringing the proposed Lower Churchill project's total capacity to over 3,000 megawatts.  The Muskrat Falls project received a key approval by provincial government in December 2012, and construction is now underway.  90 per cent of the project contracts have been awarded, and 98 per cent of the engineering on the project has been done.

Back in 2010 when Nalcor and Emera first announced the project, the cost forecast for the Newfoundland and Labrador portion was $5 billion.  But as the St. John's Telegram reports, the latest cost estimate for building the Muskrat Falls project has jumped by about $800 million, to $6.99 billion.

This estimate does not include the cost of the Maritime Link transmission system to be built by Emera, connecting Newfoundland to Nova Scotia via undersea cable.  The Maritime Link is expected to cost an additional $1.5 billion.

Despite the cost overruns, the project is reported to be on schedule to be completed in 2017.

April 14, 2011 - Canadian hydro imports as renewable

What energy sources are renewable?  What does renewable mean?  Any state developing a renewable energy standard would be wise to consider these questions.  There is broad consensus on a core group of technologies, while the degree to which some other energy sources may be renewable remains a subject of debate.  When it comes to renewable portfolio standards - laws mandating that a certain portion of electricity sold be sourced from qualified renewable resources - it can take an act of the legislature to deem a particular resource type "renewable".

Wood pellets: biomass for homes, on display at a gas station.

The Nova Scotia Legislature is currently considering this very question.  The provincial minister of energy and natural resources proposed a bill to declare hydroelectricity "renewable electricity" by legislative mandate.  That bill, Bill No. 15 classifies hydroelectricity as renewable electricity, for the purpose of meeting Nova Scotia's 40% renewable electricity by 2020 goal.  Bill No. 15 would apply to hydroelectricity generated in Nova Scotia - there are about 40 small hydro plants in Nova Scotia, collectively supplying about 11% of provincial capacity - as well as to hydroelectricity produced elsewhere and imported into the province.

Many states and provinces are wrestling with the question of whether hydroelectricity imported from Canadian large-scale hydro projects should count towards their own renewable portfolio standards.  For many states in the northeastern US, importing hydroelectricity from Hydro-Quebec is one option; New Hampshire's review of the proposed Northern Pass transmission line raises these issues.  In Nova Scotia's case, the province is a partner in the Muskrat Falls portion of the Lower Churchill hydro resource in Labrador.  A 180-kilometer underwater cable called the Maritime Link will connect Labrador and Newfoundland with Nova Scotia.  Nova Scotia will put up 20% of the project capital, in exchange for which it will receive 170 megawatts of hydroelectricity for 35 years, with an option for an additional 330 megawatts.  The province expects this one project to account for a quarter of the province's 40% renewable mandate.

In this context, what does Bill No. 15 do?  By proposing to clarify that imported hydroelectricity counts toward the province's renewable energy standard, does the bill imply that it is not currently clear that hydro is renewable?  Or is Bill No. 15 simply part of the overall package of Nova Scotia's 40% renewable electricity mandate, helping clarify that Nova Scotia can rely on cost-effective regional resources in its pursuit of environmental goals?

March 31, 2011 - Canada backs Lower Churchill hydro project

The Canadian federal government has just announced that it will support the Lower Churchill hydroelectric project in Labrador.  The $6.2 billion project has been in the planning phases for years, but now appears to be moving forward.

Rich in natural resources, Canada is home to a great number of rivers with significant hydropower potential.  Many of these rivers have been dammed and developed in the past century; second only to China, Canada is now a leading producer of hydropower in the world.  In recent years, Canada has been one of the few countries to produce a majority of its electricity from hydropower, with some provinces like Quebec, Manitoba, and Labrador producing over 90% of their electricity from hydro dams.

Since 1971, much of the Churchill River's flow has been diverted into the Churchill Falls hydroelectric station.  At 5,428 MW, the existing Churchill Falls project has the second largest capacity of any power station in North America.  The Lower Churchill project entails building two new plants (Gull Island and Muskrat Falls) with a combined capacity of over 3,074 MW.

It remains to be seen what form the support of the Canadian federal government will take.