The failures at the Muskrat Falls Hydro Project, for green energy transformation, is the subject of EkaLore analysis and notes. Recent news highlights additional engineering setbacks, higher user costs for electricity, and transmission line operations. This update looks at what these mean for the 50,000,000 people dependent on Muskrat Falls to reach climate goals.
The ongoing problems preventing Muskrat Falls operating at maximum levels creates a cascade of multiple problems:
1) The Holyrood oil-burning generation station (500MW) must be kept ready to provide power in the event of problems. Original concepts called for this, very expensive, oil-to-power generation site to have a greatly reduced role (and costs). These costs get passed on to local customers. Oil-burning also increases difficulties reducing climate-affecting emissions.
2) Up to 50000000 peoples' plans to reduce carbon emissions are at risk. Failures to generate and transmit large amounts of power limit exports to the United States. The Canadian Provinces and USA States all have legal and regulatory commitments for climate-change-reductions to be met. Not consistently and reliably being able to deliver hydro (green) electricity means no monies from American consumers, nor do climate change reductions get met via existing plans. The 9.45TWH contracted with USA utilities would bring USD$1.8-1.9B/year, for 10 years, in revenues if delivered.
3) Many costs for fixes to electrical transmission and generators will come out of suppliers’ pockets (like GE). The extra costs of providing power (from Holyrood), and a portion of the fixes’ costs will end up in local customers’ bills.
4) Bills for electricity users will increase July 1 at rates of 3.4%-6.7% for residential and 7%-8.4% for commercial customers. These costs are for past years' construction, operations, and financing costs. New cost increases can be expected as additional costs for problems get added up.
5) Bills will also increase to reflect a Federal carbon tax increase beginning in 2023 at CAD$65/ton of carbon increasing to CAD$170/ton by 2030. This increases fuel oil taxes from CAD$0.1275/liter to CAD$0.1593/liter
The Holyrood generating station uses up to 2880000 liters per day in full operation thus adding up to CAD$458784 per day to generating costs when there isn't enough Muskrat Falls power. Higher costs from global oil prices will also increase bills.
The Muskrat Falls project was started for all the right reasons. The reality of very complex green energy transformation projects is their costs, schedules, and risks can increase while rewards and benefits are pushed out and smaller.
In the next piece, EkaLore looks at some of Muskrat Falls ongoing problems.
For more analysis and notes on Muskrat Falls see http://www.ekalore.com/
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