Demand for new energy is clear: government

Ashley Fitzpatrick
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Jerome Kennedy (left), minister of Natural Resources and Gilbert Bennett, Nalcor's vice-president of the Lower Churchill Project, speak to reporters at Confederation Building. — Photo by Keith Gosse/The Telegram

Provincial Natural Resources Minister Jerome Kennedy has been repeating the question for months: “Do we need the power?”

The question is in relation to the $7.4-billion Muskrat Falls hydro project and, on Wednesday, his department and Nalcor Energy offered up an answer on paper.

According to the forecast for power need, a block of power once being sent to the province’s paper mills has been freed up, and there are fewer people living here.

On the other hand, those who are living here are demanding more power than ever before and quickly eating away at the power available.


“We have had 28,800 new houses constructed between 2002 and 2011, with 86 per cent of them using electric heat,” Kennedy told reporters during an afternoon news conference at the House of Assembly. The paper stated 85 per cent.

“Since 2006, we’ve averaged over 3,000 homes a year with the maximum of 3,600 in 2010.”

Industrial demand has gone down, but “we have more homes, we have less people in the homes, we have bigger homes, we have younger families and we have more electric space heating,” Kennedy said.

The latest forecast is predicting a need for more power on the island as early as 2015, noted Nalcor vice-president and Lower Churchill lead Gilbert Bennett.

He said new turbine generators will be used to avoid outages and bridge any gaps between the island’s power demand and supply before Muskrat Falls and the Labrador-island link come online.


Bills and demand

The release of the demand forecast follows on the heels of predictions on what power bills will be with and without Muskrat Falls.

The power bill numbers are dependent on the island using, in total, 40 per cent of the power being produced by the dam at Muskrat Falls.

Opposition parties had suggested power bills could run higher than projected, if the forecasted demand for power falls short of what is actually used.

Bennett said bills could go slightly higher, but would not reach the level of what people might see if Muskrat Falls was not built.

He added Nalcor’s forecasts have been conservative on demand, so as not to overproject and suggest a need for power if no such need exists.

Bennett’s claim on the forecast was confirmed in the latest review of the project by Manitoba Hydro International (MHI). MHI stated the predictions might be low, considering the fact the forecast assumes no new industrial customers to 2029, outside of Vale with its processing facility at Long Harbour.


Energy conservation

In a filing with the Public Utilities Board (PUB) related to its proposal for a general rate increase — still before the regulator — Newfoundland Power stated it has had more than 17,000 participants in energy conservation programs since 2009.

“General customer interest in conservation has also increased in this period. Visits to the takeCHARGE! website increased by almost 50 per cent,” reads the filing.

Both Kennedy and Bennett said a push on energy conservation measures, demand management, would not be enough to deal with the demand the province is facing.

“But conservation, demand management, I think can be ... an important tool I think and, (Nalcor CEO) Ed (Martin) spoke about this yesterday, it’s something we certainly encourage. But it’s not going to be, as it was put forward in the past, a way to solve the energy deficit which we’re going to face,” Kennedy said.

Bennett said conservation measures were included in the demand forecast.

Opposition members challenged the conclusions on conservation.

“It doesn’t seem like there has been any measures to take (conservation) into account,” said Liberal MHA Andrew Parsons.

“We’ve got some numbers to consider, but certainly one of the most important ingredients in this demand forecast — you have to ask the question about conservation. We haven’t seen anything about any conservation programming or anything that could affect the need for Muskrat Falls,” said NDP MHA George Murphy.

Murphy spoke about considering “aggressive” measures, suggesting it might be a better option, if paired with wind power or small hydro.

Aggressive conservation measures would require significant spending on incentivizing conservation, or legislation, having the consequence of potentially driving up costs for homeowners on new homes, or with required renovations.

Organizations: Manitoba Hydro International, Public Utilities Board, Newfoundland Power

Geographic location: Labrador-island, Vale

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Recent comments

  • Cold Future
    November 08, 2012 - 14:37

    When Danny Williams annnounced a term sheet with NS to build Muskrat Falls, it was to replace Holyrood generating station and connect to the mainland. It the few months to follow that initiative has snowballed into a need for power. How can there be a need for power if we are taking 475 MW of capacity out of the system ( a station that has a utilzation of 10 to 15 % per year) and replacing it with about 500 MW after transmission losses. The net gain in capacity to the system is 25 MW. If we are building 3000 new houses per year should not the population be increasing by about 12000 per year. Is 2 plus 2 still 4 ????

  • Denise Hennebury
    November 08, 2012 - 12:35

    I have been trying to figure out what the right words are to question this process. How is it that we are being told that this is the best option AND are expected to produce an alternative if we disagree. But I think I have it figured out ... With ANY public bid schools and governments are expected to work out the alternatives in detail. I appreciate this might be the "least cost option" on paper, however I want to see a viable alternative (be it a project, a series or projects or purchase decisions) worked out with as much care and detail as this. Looking at this project and thinking "this is the best option" and spending all the time money and energy on proving yourself right COULD have been done with ANY viable option (even if that option is to buy from Hydro Quebec for a fwe more years). Energy or NO Energy is not much of an option. If Muskrat Falls fell through we woudl find other solutions. What would that look like? Just curious.

    • david
      November 10, 2012 - 14:03

      We have a government that has had its feet set in Muskrat Falls concrete since Danny poured it. It is another in a long, unbroken chain of "home-run-swings" that have yet to produce even a man-on-base (a few of those could win a game, BTW....). With every one of these whiffs and strikeouts, we get closer and closer to the last inning. And the swings get bigger, wilder, and the bat could just fly out of our hands.

  • K
    November 08, 2012 - 11:31

    How much for turbine generators, will they be used and kept for back-up. If so do we need Muskrat. Why not let I.O.C. obtain power from Churchill Falls, as well as any company in Lab. now or future? WE will get it back. Nalcor says it is using conservative figures as well as government. Hope the poor and middle class have deep pockets.

  • K
    November 08, 2012 - 10:28

    How much to obtain from Churchill Fallos ? Till we retrieve the Falls?

  • David
    November 08, 2012 - 09:16

    Seriously? The government is trotting out house construction rate data from the once-in-an-eternity Hibernia housing boom in St. John's, that is now already in the rear-view mirror, during a period of virtually free mortgage financing, in a province that is otherwise depopulating at a fatal rate? Compelling stuff.

  • David
    November 08, 2012 - 09:12

    Demand for New Government is Clear: Everybody Else.

  • Winston Adams
    November 08, 2012 - 09:11

    As to the new paper on power demand, i have a number of question gone for clarification. One is this: At the PUB hearing, the MHI data showed our residential load was 50 percent of the total. There are 3 main sectors; residential, commercial, and industrial. Electric heat is the main problem, and much is said about the number of new houses. This new paper shows the residential as 60 percent-- but not 60 percent of the total, 60 percent of just the residential and commercial. When you look at the Table showing the individual usage, the residential is only 46.3 percent of the total, instead of the 50 percent some months ago. So is the numbers being played with for appearance as to residential demand?

  • Winston Adams
    November 08, 2012 - 08:59

    Excellent article. as to costs it's an investment, The USA study showed a 8 percent power surcharge return a 24 percent reduction in power bills. Normally a 4 percent surcharge with 50 rebate to residents costs to install efficiency measures. Other places, like Vermont do 10 times more than we do to help home owners with such programs