Nalcor CEO: Lower Churchill contracts would be awarded 'within days' of approval

9/14/2012

Contracts for the construction of the multibillion-dollar Lower Churchill Falls hydroelectric and transmission project in Labrador would be awarded "within days" of the project receiving its final approvals, the CEO of project developer Nalcor Energy said.

"Then the shovels go in the ground and we begin the construction phase," Nalcor Energy CEO Ed Martin said in a question-and-answer column published Sept. 2 in The (Toronto) Globe and Mail newspaper.

Nalcor, owned by the government of the province of Newfoundland and Labrador, is undertaking the project in partnership with Emera Inc. and its subsidiary Nova Scotia Power Inc. At the end of July, the two companies signed a series of agreements addressing issues such as governance, responsibility for cost overruns and ownership of transmission rights.

The project, estimated at C$6.2 billion, includes an 824-MW hydroelectric facility called Muskrat Falls in Labrador, a roughly 1,100-kilometer high-voltage, direct-current transmission line, called the Labrador-Island Transmission Link, from the hydro facility to the island of Newfoundland, and another transmission line called the Maritime Link running largely underwater from Newfoundland to Nova Scotia.

Approvals are still needed from the Newfoundland and Labrador and Nova Scotia legislatures, regulatory agencies and Emera's board of directors. But once those come, Martin told The Globe and Mail, construction will begin quickly. Assuming construction begins this fall, he said power will be produced in 2017.

Perhaps most notable about the project is that Newfoundland will be connected electrically to the rest of Canada for the first time. "All of a sudden you have the island of Newfoundland connected to the national grid for the first time. It will be able to fulfill its own needs but also export power," Martin said.

A second phase of hydroelectric generation development calls for a larger power plant at the Lower Churchill site. The 2,250-MW Gull Island project would be able to supply most of Nova Scotia's power needs, Martin said, adding, "Following that, it is wind development. We have some of the best wind regimes in the world, and the hydro to back it up."

With the province's growing demand for electricity, additional resources are needed. "So we have to build something," Martin said, arguing that the project as proposed "offers the best and lowest cost, along with stable electricity prices."

If natural gas prices remain low, therefore keeping power prices low, Martin said the Muskrat Falls generating capacity could just be stored until power is needed.

"With the projections of increasing demand throughout North America, and the need to replace aging infrastructure in the United States, Ontario and Atlantic Canada, we are confident we are going to be in good shape with export opportunities," he told The Globe and Mail.

It's not just the Atlantic provinces that will benefit from the Lower Churchill project but Ontario and Quebec as well, Martin said, as they will be providing some manufacturing capabilities as well as workers.

(HydroWorld)