The big projects required for a Green Transformation come with dreamy rewards – and risks.
The Muskrat Falls Hydro Project has rewards – and failure. How failure came to be has lessons.
In 2010 Nalcor Energy, the Canadian Crown Corporation electric power utility for Newfoundland and Labrador, teamed up with Emera, based in Nova Scotia, to exploit the water of the Churchill River by putting in a concrete dam at Muskrat Falls, Labrador. The Churchill River falls 15 meters (about 50 feet) at Muskrat Falls. The new Muskrat Falls Generating Station was targeted at 824MW of capacity to generate 4.9 TWH (millions of millions of watt hours) of electricity per year.
An earlier project in 1967-1974 at Churchill Falls, where the water drops 305 meters (more than 1000 feet), created the 16th-largest hydroelectric generating station. The Churchill Falls Generating Station uses up about 65% of the Churchill River’s potential generating capacity at 5428MW. The power from this Generating Station is primarily sold to Hydro Quebec (32.4% owner) at a fixed price contract, thru 2041, at CAD$0.02/KWH, with much of this resold to the spot electricity market in the USA (allegedly providing CAD$80B in profits over about a 50-year period). A pending regulatory approval (2021) would build a new 1200MW transmission line carrying 9450000 MWH per year for 20 years of the desirable hydroelectric power to Massachusetts. In 2022 Hydro Quebec exported 35600000 MWH @CAD$0.082/KWH worth CAD$2.912B of electricity primarily from Churchill Falls.
The generating station project was part of a massive energy development including:
Transmission line interconnect with the Churchill Falls lines
Labrador-Island Transmission link of 1100 km (about 685 miles) from Muskrat Falls to Soldiers Pond NF.
Labrador-Island Transmission link of 30 km (about 19 miles) from Muskrat Falls across the Strait of Belle Isle for up to 900MW of electricity
Maritime Link of 180 km (about 113 miles) from Bottom Brook to Point Aconi, NS for up to 500MW of electricity (up to 25% of generated capacity)
The total estimated cost (2010) was CAD$6.2B with the Generating Station (CAD$2.9B), the Labrador-Island Link, and related (CAD$2.1B), and the Maritime Link (CAD$1.2B).
In 2021, as costs climbed, Newfoundland and Labrador Hydro, a Canadian Crown Corporation, absorbed Nalcor Energy. The financing of such a big project, with its delays, had led to a failure. Years delayed and with climbing costs Muskrat Falls is a cautionary tale for large Green Transformation projects.
In EkaLore’s next piece in the series a look at the 2023 problems for the Muskrat Falls projects.
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