A Nalcor Energy schematic of the Muskrat Falls project.
Hydroelectricity expected to flow to Nova Scotia from Labrador to reduce dependence on coal-fired plants has been delayed once again. Inits quarterly reportto the Utilities and Review Board, NS Power Maritime Link (NSPML) says the builder of the Muskrat Falls project is experiencing pandemic-related delays.
On March 17, Nalcor (the Newfoundland utility building the Muskrat Falls dam) paused construction at its Muskrat Falls and Labrador Island Link sites due to physical distancing restrictions related to the virus. Nalcor has declared a Force Majeure. “Force Majeure” is a clause in contracts which releases a company from its legal obligations when an extraordinary unforeseen event hits, such as a pandemic or a major hurricane.
June 1, 2020 was the date Nova Scotia was supposed to take delivery via the Maritime Link undersea cable between Cape Breton and Newfoundland. It’s been in place and operational since January 2018. The 35-year, fixed-price contract between NS Power and Nalcor is supposed to deliver enough renewable energy to meet 20% of the demand here in Nova Scotia.
Nova Scotia Power (NSP) was also counting on Muskrat Falls to comply with legislated renewable energy targets that require 40% of electricity to be generated from green sources by the end of 2020. The province generated 30% from renewables in 2019.
GE Software a major glitch
Muskrat Falls is now two years late and at least $6 billion over budget. Prior to the COVID-19 outbreak, Nalcor was projecting completion for July 2020. It says the Muskrat Falls project is 98% complete.
In its April 15 update to the regulator, NSP says the cable system delivering hydro from Muskrat Falls in Labrador to Newfoundland — known as the Labrador Island Link (LIL) — is 99% complete.
But the unresolved issue is the software needed to operate and control the transmission over that Link is still in development and testing. It was supposed to be ready last August but General Electric, which is supplying the software, ran into a major problem.
“Since the pause of work at the construction sites in Newfoundland, Nalcor and its Contractor, GE, have been able to safely continue development and testing of the interim Protections & Controls (P&C) Software needed for operations and are nearing factory acceptance testing,” reads the quarterly report from NSPML.
“Due to the unpredictable nature of the COVID-19 pandemic, Nalcor is currently unable to provide an updated schedule for LIL or the generation project at Muskrat Falls and intends to wait until there is greater certainty to update its Integrated Project Schedule.”
Where that leaves the customer, Nova Scotia Power, is uncertain. What that means for ratepayers here is that the utility is now searching for a large chunk of replacement power that may cost more to buy and affect the cost of electricity next year.
“As with many businesses and project sites across the country, implications from COVID-19 are being felt and we are no different,” said Jacqueline Foster, communications advisor with NSP. “Given this news, we will continue to explore economical options to achieve the same amount of renewable energy. As always, we are committed to finding an affordable solution for our customers. The Maritime Link provides long-term strategic benefit to electricity customers in Nova Scotia, Newfoundland & Labrador, and the entire Atlantic region.”
No date has been given when work will resume on the massive hydroelectric project. The April 15 document says “Nalcor has expressed its desire to return to the site as soon as it safe for employees, contractors, and associated communities.”
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I read somewhere a year or so ago that many (if not most) mega-projects end up costing much more than initially projected. All the more reason to hit the pause button on the QE-2 expansion project, and do a thorough evaluation of this project – and to involve the public.