Electricity future abounds for province

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I would like to agree with the support for the Muskrat Falls project voiced in last Saturday's paper by David Short, although I must disagree with several points in his analysis.
He refers to the rate of return on capital as being unsuitable as a metric for publicly owned projects.
I would point out that the project requires the use of several billions of dollars from world capital markets and the borrowers require this return on their investment.
The project would be unable to raise money in the bond market if it were not financially viable over the 30- year life of the loans.

The business case in favour of the development is rock-solid and the non-trivial objections are nothing but political discontent. Provincial Liberals are seething that the PCs will execute a successful hydro project in Labrador. The legacies of Williams and Smallwood will be as different as the accomplishments (and non-accomplishments) of the men themselves.

It is clear that the project has passed the scrutiny of the Federal Department of Finance and that it is being accepted in the bond markets of the world. This is in addition to acceptance by Nalcor, the provincial Department of Finance and the voters in the last election. I am not sure that I place too much faith in the comments of our Public Utilities Board, which is dominated by a well-known climate-change denier who has been known for interesting behaviour in the past. One shudders at the prospect of the forthcoming racket over the electricity fiasco of the past few weeks.

I am certain that mistakes were made in the management of the existing infrastructure but I am also certain that some of these mistakes were made in the interest of not throwing good money after bad.

Investments in the Holyrood facility must be minimized, as they can not be amortized over more than the remaining productive life of the assets (about four years). An upgrade or repair in Holyrood would cost each electricity customer more than one-hundreddollars a year over the remaining four years of life. Ask the Canadian Navy about the costs to repair a submersible

version of Holyrood.

I don't quite swallow that two single- point failures in the transmission network were the inevitable results of industry best-practices planning. In the near future, the Muskrat Falls project will connect the island grid to the mainland and essentially eliminate the contingency of an island-wide blackout. This is a game-changer in terms of engineering reliability of supply for island consumers.

The link to Nova Scotia could be reversed to bring market-price power to the island if technical problems ever shut down the Muskrat and Churchill Falls sources.

A major cost of the Muskrat Falls project is the classical substitution of capital cost (rock, concrete and transmission wire) for operational cost (fossil fuels). This locks in most of the cost to the consumer for a generation. This certainty should be used by consumers to plan their energy use for the next 30 years or more.

Heat pumps and insulation are available to every one of us and should be made available to those on fixed incomes when the provincial economy'( a.k.a. the price of Brent crude) improves.

The project lays the foundation for our future role as an energy powerhouse for the mainland. We will need additional HVDC links to bring the five-fold greater production of the Upper Churchill and the more than two-fold greater Gull Island power to the wholesale market.

Our electricity future is limitless when you factor in the wind energy potential off the coast of Labrador as illustrated by the Environment Canada Wind Energy Atlas.

John Austin

St. John's

Organizations: Department of Finance, Public Utilities Board, Canadian Navy Environment Canada Wind Energy Atlas.John AustinSt

Geographic location: Labrador, Holyrood, Nova Scotia Gull Island

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Recent comments

  • Mr Global Speaker
    January 11, 2014 - 07:28

    Our electricity future is limitless, yes, but our human future is not. Of course, if all you mind is selling heat pumps, and becoming something "for the mainland", why don't you move now, you can sell heat pumps on the mainland, where they make sense, or are you a coastal maritime climate denier?

  • Corporate Psycho
    January 10, 2014 - 16:02

    If anything the blackouts disproved the need for MF. Williams wouldn't shine Joey's shoes.

  • Cashin Delaney
    January 10, 2014 - 12:56

    Any flow system has an optimum usage and the Churchill is tapped out. Whether you deny climate change ( which is curious because almost know one does, only some refute the scientific models that attribute an exaggerated influence in planetary Greenhouse warming to man induced CO2 release) or not is irrelevant to poisoning with byproduct mercury at the Lake Melville proximity of MF. Mercury os as natural as CO2. Liberals are not seething, if they were, and had intentions to stop this rape and pillage, they could. The scrutiny of federal finance, being as good as federal environmental sanctioning, is not a valid endorsement when the same bully tactics are being used throughout Canada to enforce federal carbon emissions agendas, while still producing oil from coast to coast. Holyrood was neglected, now the genii come out in swarms to torpedo it. Will warming centers be spun as a community solidarity project for the next decade in CBS? The energy warehouse is at least now being termed an energy powerhouse, so the language is evolving. A normal catastrophe is a term used to describe situations like the challenger explosion. NASA followed their best practices, their was no one to blame for frozen Orings, maybe the russians weather modification, or god. No one at Nalcor or the government is personally failing us, on the contrary they are just in need of an overhaul of strategy. I won't deny we need to burn less gas. Plant more trees. However, adding resistance to the circuit - the river system, is not a good answer. Nothing is perfect. Nuclear is something we will have to face someday. The fuel, and some of the best sites in the world exist in Labrador. Energy warehouse takes on a little more credence then, but still exhibits the misnomer that neglects flow. Heat pumps before insulation hey! Insulate first. If you can afford to build from stone concrete, thermal mass, then a heat pump, and all the dealings with future complications can be avoided. Who is going to put the heat pumps in for the welfare crowd, hahahaha, I know that's bad to say, I sympathize with anyone who's been there, is there, but jumping Christ man, this is just too much, ya gotta just laugh. Gerry Rogers would laugh at that. Where will we get all the rock to insulate ourselves from mother nature and her ugly stepchild, global warming, I wonder? One comes on with the cold snaps, D, another with the hot. Only ting to do is crawl behind a rock. sticks make quick bucks, so do heat pumps, if welfare and weal are the long term goal, build something the big bad weather mod. wolf can't blow away, nor the ice princess honey boohoo freeze you with her smart meters.