On to Plan B

Randy Simms
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Section 4 of the province’s energy plan is an interesting study in how you can plan for one thing but do another.

When the plan was released, it was aptly titled Focusing Our Energy. It makes the case that we have an abundance of energy potential on a number of fronts — oil and gas, wind, solar and hydro — and must take advantage of them all.

The plan proposes that this province, unlike others, has the potential to be an energy warehouse for North American markets.

But things didn’t turn out as imagined.

The document says: “To accomplish our energy goals, we need to continue to encourage private sector investment and effectively engage partners to assist in developing our resources.”

Muskrat Falls is very much a go-it-alone endeavour and the partners we expected to be knocking on our doors with their chequebooks are nowhere to be seen. Muskrat Falls is mentioned once in the document and is not ever considered as a  project separate from the Gull Island development.

Page 32: “The Lower Churchill hydroelectric project is the most attractive undeveloped hydroelectric project in North America. Its two installations at Gull Island and Muskrat Falls will have a combined capacity of over 2,800 MW and can provide 16.7 Terawatt hours of electricity per year — enough to power 1.5 million homes without a requirement for significant reservoir flooding.”

But this is not how things turned out. The province went with Muskrat Falls as a stand-alone entity. The 2,800 megawatts of power from the Lower Churchill has been reduced to 824 megawatts. The portion to be sold to external markets will sell at a rate lower than the cost of production. None of this was envisioned in the energy plan.

What was to be and what became reality are quite far apart. Here’s what the Lower Churchill project was to look like: “The project will more than double the amount of renewable electricity available to the province and will dramatically increase the amount of power available for economic development in Labrador and on the island. The project is expected to have a capital cost of $6 (billion) to $9 billion, is expected to create over 10,000 person years of employment during its construction, and provide economic benefits from generation for decades to come.”

Looking back, we can smile at the low-ball cost estimate. If it’s going to take $8 billion to $10 billion just to do Muskrat Falls, the financial commitment to the entire project would have been astronomical.

While some argue we can’t afford Muskrat Falls, no one thinks we could have tackled the Lower Churchill by “going it alone,” as a former premier once put it.

The amount of power available for economic development in Labrador is simply not there either.

The plan said one thing and we did another.

The plan also envisioned having to wait to sanction the Lower Churchill development. It recognized that it might take time to put the project together and get proper partnerships in place.

What to do in the meantime? We do have an increasing demand for power here at home.

Page 32 again: “To ensure that we can meet our future electricity needs, we must also have an alternate plan in the event Lower Churchill does not proceed as planned. In this case, we will provide future electricity needs from the most economically and environmentally attractive combination of thermal, wind and smaller hydro developments.”

That didn’t happen, did it? We have taken control of energy development on all fronts and only Muskrat energy will be used to meet local demands.

Also from the plan: “In Labrador, in addition to available recall from the Upper Churchill, wind and other hydro developments are potential power supply options to be considered in the event that the Lower Churchill project is not sanctioned.”

We had an energy plan and quickly abandoned much of it in favour of Muskrat Falls.

I guess a new plan is called for.

Randy Simms is a political commentator and broadcaster. He can be reached at

rsimms@nf.sympatico.ca.

Twitter: @RandyRsimms.

Organizations: North American

Geographic location: Gull Island, Labrador, North America Muskrat

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  • Maurice E. Adams
    July 26, 2014 - 09:12

    Yes, a new plan is called for. And I would suggest that the Muskrat Falls dam/generation facility is the biggest cost, the biggest cost overrun, the biggest risk (North Spur and a very uncertain WMA), and needs to be reviewed. Scrap the dam and build the transmission line only. That would save perhaps $5 billion capital, and if we buy what we need from Quebec, we would save another $15-$20 billion (we only need to buy their power up to 2041) --- not Muskrat power til 2067.