The Canadian Press and The Telegram
A study conducted for the Nova Scotia government says buying electricity from the proposed Muskrat Falls project would be $402 million cheaper than importing it from Quebec.
The study, released today by consultant John Dalton of Power Advisory, concludes that supporting the Labrador project would cost $1.5 billion less than using a mix of wind and natural gas over the 35-year life of the commercial contract for the hydro development.
The projected costs are based on 2017 dollars, which is when the project is expected to be online.
The study uses a computer model to compare the differences in the costs between the three options considered.
In the case of Hydro-Quebec, Dalton says Muskrat Falls would help Nova Scotia avoid transmission tariffs he described as “relatively high.”
The greatest uncertainty in generating more power through wind and gas would be the cost of upgrading gas pipelines, estimated to be in the hundreds of millions of dollars, the report said.
The study was commissioned last September but Nova Scotia Premier Darrell Dexter only announced it was ongoing last month.
When asked why he kept the study under wraps, Dexter initially indicated he did not want the media pestering Dalton’s company. The premier later said that the only thing that mattered was that the work was being done.
Dalton’s report follows several commissioned on behalf of the government of Newfoundland and Labrador, which approved the $7.7-billion project last month.
Critics in that province have questioned the efficacy of reports that weren’t vetted by a public regulator and also accused the government of ignoring other reports by the province’s Public Utilities Board and a joint federal-provincial environmental review panel.
Those reports concluded that Muskrat Falls had not been proven to be the cheapest or even necessary option to meet Newfoundland and Labrador’s needs.
As part of the development, Nova Scotia private utility (Emera) would build a 180-kilometre subsea cable known as the Maritime Link, which would ship power from Cape Ray in southwestern Newfoundland to Lingan, N.S., in Cape Breton. That is estimated to cost about $1.5 billion.
Newfoundland Premier Kathy Dunderdale told reporters today she’s not surprised by the study’s conclusion on costs.
“I’m not a bit surprised. You know we understand this project inside and out. We’ve been very, very thorough with our research and analysis. The people at Nalcor understand energy development and the costs associated with that. And for Nova Scotia, in terms of Emera, they do that kind of work as well. So that was the kind of information, the work that had been done and the information that had led to the decision to partner between Nalcor and Emera to develop Muskrat Falls,” Dunderdale said.
She said it’s good, however, to have that”arms-length confirmation of the things that Nalcor has been saying and this government has been saying for the last three years.”
Joe Oliver, federal Minister of Natural Resources, said the study shows that the federal loan guarantee for the Muskrat Falls project will not only help create jobs and economic growth for people in Atlantic Canada, but will also provide a cheap, stable and sustainable source of clean energy for the region.
“In addition to reducing up to 4.5 million tonnes of greenhouse gas emissions annually, the Lower Churchill projects will result in an average of 1,500 jobs during each year of construction with peak employment during construction of approximately 3,100 people. They will also generate $1.9 billion in earnings for the people of Newfoundland and Labrador,” Oliver said in a prepared statement.
He said this project has the support of all official political parties in the House of Commons.
“Our government supports energy projects that have regional or national significance, economic and financial merit, and significantly help to reduce greenhouse gas emissions,” the minister added.