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.

Alaska's Susitna hydro project revived

A large hydroelectric project proposed by Alaska's public power authority is moving closer to reality.  With over 600 megawatts of electric generating capacity, the Susitna-Watana Hydroelectric Project would be the largest dam built in the U.S. since 1966, when the Glen Canyon Dam was built on the Colorado River in Arizona.  If built, the Susitna project would represent a return to both mega-scale hydro and state-backed hydroelectric development in the United States.

The Susitna River project has been under consideration for nearly 50 years, although environmental concerns and the relatively low cost of oil dampened interest in the project for much of that time.  Increasing fossil fuel costs, renewable energy targets, and interest in exploiting the state's sovereign resources have now led to a revival of the project.  In 2011, Alaska state legislators unanimously approved funding for the Alaska Energy Authority to pursue the project.

The Alaska Energy Authority (AEA) was created by the Alaska Legislature as a public corporation of the state, albeit with a separate and independent legal existence.  AEA's missions include reducing the cost of electricity in Alaska, and constructing, acquiring, financing, and operating projects that utilize Alaska's natural resources to produce electricity and heat.

Renewed interest in the Susitna project comes partly in response to Alaska's renewable portfolio standard law.  In 2010, the Alaska Legislature enacted House Bill 306, creating a goal that the state receive 50% of its electric generation from renewable and alternative energy sources by 2025.  The project could also produce low-cost electricity, with generation costs projected to be lower than natural gas over the life of the project, possibly significantly lower once the project's financing is paid off.


AEA now plans to follow the traditional process for licensing hydroelectric projects through the Federal Energy Regulatory Commission.  AEA is expected to file its pre-application document with FERC on December 29, 2011, with the license review process expected to take up to six years.


If the Susitna project is built, it will be a departure from the recent trend of dam removal.  Some observers have argued that the era of building large-scale hydroelectric facilities in the United States ended decades ago, but the Susitna project could reverse that trend.  Moreover, the Susitna project would be built by a sovereign state government, echoing historic federal efforts like the Tennessee Valley Authority and Bonneville Power Authority.

Large hydroelectric projects around the world

Hydroelectricity provides a significant amount of usable power across the world.  According to the U.S. Energy Information Administration, in 2008 hydroelectric generation produced 3,119,012 million kilowatt-hours, or 16% of the total electricity produced in the world.  In the U.S. between 1998 and 2009, hydroelectric generation produced between 6-9% of the nation's total electric generation, depending on water availability.

Hydroelectricity is also responsible for many of the largest generating facilities.  For example, the federal Grand Coulee Dam in Washington has a summer nameplate capacity of 7,079 megawatts, making it nearly twice as large as the next biggest U.S. power plant (Arizona's Palo Verde nuclear generating station).

Around the world, large hydroelectric projects produce immense amounts of power.  When China's Three Gorges Dam project on the Yangtze River is complete, it is projected to include 32 separate 700 megawatt generators, producing a total project capacity of 22.5 gigawatts.  This will make the Three Gorges Dam not only the largest hydroelectric dam in the world, but also the largest power station of any type.

Brazil's Itaipu Dam, producing up to about 14 gigawatts from the Paraná River along the Brazil-Paraguay border, is both the second largest hydroelectric plant and the world's second largest power station of any type.

Brazilian developers have also proposed the Belo Monte dam on the Amazonian Xingu River, which has received key environmental permits despite opposition on social and environmental grounds.  If built, Belo Monte would be able to produce up to about 11 gigawatts of power, making it the third largest hydroelectric facility in the world.  This week, a Brazilian judge issued a legal injunction against the Belo Monte development, noting the risk that fisheries would be damaged by its construction and operation.  Will Belo Monte become the world's third largest power plant?

August 4, 2011 - Northern Pass transmission project delayed

For the past year, several large New England utilities have been collaborating on a major new transmission project to connect Canadian generators with New England markets. Northeast Utilities and NSTARhave proposed a high-voltage DC transmission line they call the "Northern Pass".  If built as proposed, this $1.1 billion transmission line will be capable of sending about 1200 MW of power from Hydro-Quebec's generation network into New England.  Canada, and Quebec in particular, possess many gigawatts of generation capacity, much of which comes from hydroelectricity.

In the meantime, some project opponents have expressed concerns about local siting issues related to the route the line will take through the White Mountain National Forest, other wild lands, and a number of communities.  Between Groveton, NH, and the Canadian border, no transmission rights of way exist today, meaning about 40 miles of new transmission corridor are needed.  Where this line should run has been a contentious issue.  As a result, the developers have expressed a willingness to consider alternative routes.

At the same time, other opponents have observed that if gigawatts of Canadian renewable power are imported into New England to satisfy domestic renewable power mandates, the region will not see the more localized environmental and economic development benefits from the development of renewable power projects in New England.  Many consider these local benefits key to the value of state renewable portfolio standards.

Now, the Northern Pass developers have announced that a rollback of the project's anticipated startup date to allow for a new route north of Groveton.  On the project's journal website, Northern Pass now states that its "expected in-service date has been modified to 2016, with construction expected in the 2014 – 2016 time frame, compared to the initial range of 2013 – 2015".

May 10, 2011 - large hydroelectric dams in Chile?

Hydroelectric dams offers society the opportunity to generate large amounts of electricity without consuming any fuel, but can come with local environmental, social and political impacts. In North America, Canadian provincial corporation Hydro-Quebec generates nearly 40 gigawatts of electricity from its hydro facilities, making Quebec a regional power in the energy sector.  Now, a nation at the other end of the earth is considering developing similar hydropower resources.

The Chilean government has given environmental permits for a $7 billion project to build five dams totaling 2.75 gigawatts on the Baker and Pascua rivers in Patagonia. The project, proposed by HidroAysen, would generate enough electricity to cover about a third of Chile's current load, and could allow Chile to export power to neighboring countries.  With no domestic oil or natural gas supplies, hydropower represents a key Chilean energy resource.  Chile is home to a booming mining industry, meaning it not only demands large amounts of electricity but -- like Quebec -- Chile also has a philosophy relatively supportive of development of its hinterlands. 

On the other hand, some locals as well as international interests oppose the project, arguing that the area's landscape, wildlife, and societies are worthy of conservation. The Baker and Pascua rivers are also heavily visited by tourists interested in the free-flowing rivers, meaning dam development may adversely impact the local economy.

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.