While the rest of the developed world is rapidly moving off the electricity grid, thanks to new energy-saving devices, rapidly evolving power-storage technologies and ever cheaper and more efficient wind turbines and solar panels, the Dunderdale government is telling us that we absolutely must “develop” the Lower Churchill Falls.
Yes, let’s ignore the new reality and blunder our way into one more ecological and sociological disaster, the cost of which, incidentally, will cripple us financially for generations.
Think that the new technology I’ve alluded to is pie in the sky? Think again.
Solar power generation worldwide has doubled in the past 12 months, and now stands at 12 gigawatts, with China and Germany in the lead at over 2,800 megawatts (MW) each, and the U.S. rapidly catching up, at 2,000 MW.
Analysts at EPEX, the European power exchange, report that solar electricity in Germany is cutting peak electricity prices by 40 per cent — giving rise to headlines such as: “Why Generators Are Terrified of Solar.” Existing fossil fuel generators in Germany are rapidly losing money and could soon go out of business. Critics might say: “yes, but you’re talking about expensive fossil fuels. Hydro power will be so much cheaper.”
No it won’t, when you factor in the enormous pricetag for the Muskrat monstrosity, which will almost certainly end up costing us $12 billion. The average power bill is determined largely by transmission, distribution, wholesale and retail costs. Our transmission costs will be huge when you consider what it will take to build the necessary infrastructure.
And we must not forget the shareholders of Fortis, who will be demanding profitability and ever-increasing share prices and dividends from their board of directors, who will in turn be demanding their bonuses. So the threat of competition from solar power this side of the Atlantic is very real.
The authors of a recent article in the journal Nature conclude that Moore’s law (Gordon Moore 1965) applies to much more than computers.
Moore’s law states that the size (and cost) of computer chips goes down by approximately 50 per cent every 18 months.
This exponential reduction has been happening for the past 40 or more years, and looks like it will continue for another decade or so. The authors studied 62 different technologies — including solar cells — and showed that these items undergo a similar reduction in cost every year or two. European energy analysts at the McQuarrie Group, along with analysts at UBS Investment Bank, have stated that the cost of rooftop solar panels has already fallen to such an extent that their rapid deployment is “probably unstoppable,” and “is heralding an energy revolution.” I should add that these panels work perfectly well in cold climates such as ours.
And solar panels are only part of the equation: battery technology and other storage technologies are making dramatic progress, so that low-cost solar electricity will soon be accessible 24/7. If you think that such a transformative change couldn’t happen here, just look at how quickly we embraced the Internet and cellphone services, and look once again at Germany, where people, fed up with high electricity bills, have gone off the grid entirely. And just imagine how fed up consumers in this province will be when they see the costs that Newfoundland Power and its shareholders will be passing on to us when Muskrat Falls comes online.
What will Nalcor do when consumers in this province decide en masse to go off the grid?
None so blind
Blinkered, as usual, (or wilfully blind) to what’s going on in the world of science and technology, our politicos are evidently determined to ignore the enormous cost and financial risk and forge ahead with a kind of project that has become increasingly unacceptable in most parts of the civilized world.
And in terms of public safety and energy security, Muskrat Falls makes no sense at all: we will be dependent on a single source of electric power via a long transmission line that has to contend with one of the harshest climates and terrains anywhere in the world (not to mention icebergs scouring the seabed over the undersea portion of the cable). Talk about putting all your eggs in one basket.
To add insult to injury, not only will we be victims of Nalcor’s monopoly on power production: we will also be obliged to accept their inflated electricity rates — the direct result of this hugely expensive, unnecessary project whose construction is being promoted on the basis of similarly inflated estimates of our future electricity needs.
For this gift to posterity we can thank the legislation recently announced by Jerome (The Enforcer) Kennedy. This legislation effectively neuters the Public Utilities Board, rendering it powerless to prevent any rate increases over the life of the 50-year contract.
It’s the kind of deal that would make the drug lords of Central America green with envy — nobody anywhere on Nalcor’s turf will be allowed to sell a single watt of electricity, no matter how competitive their prices.
And if anything goes wrong with the Atlantic Canada power sales deal, the ratepayers of Newfoundland and Labrador will be left to pick up the entire tab.
Given the aforementioned exponential developments in domestic power technology, Nalcor’s estimates of future energy needs are, quite frankly, ludicrous and laughable, especially when you look at the timescale on which they are prognosticating — from 2010 to 2029, and then on through 2029 to 2067! Looking back over that same period, historians will likely regard this exercise in futility as something akin to that of an “expert” from 1900 predicting the number of horses and steam engines the province would need by 1967.
If the Muskrat Falls project is such a fabulous deal for this province’s ratepayers, then why has the government effectively abolished the regulatory powers of the PUB?
I’m guessing that it’s not about allowing Nalcor and Newfoundland Power to offer us big rate reductions and generous discounts.
How ironic that, while almost every enlightened government on the planet is encouraging households and businesses to generate their own electricity (and is buying from them whatever surplus energy they produce), our benighted, self-serving politicians will be slamming the door on any such opportunity.
And while in many countries, including the U.S., energy co-operatives work on a profit margin just sufficient to meet their costs and maintain their infrastructure, in this province the suppliers of our electricity are answerable primarily to their shareholders, as is evidenced by our ever-escalating hydro rates. Co-operatives, on the other hand, are owned by the consumers and are answerable only to them.
Fish merchants are our past
There are three kinds of entrepreneur: the productive, the unproductive and the destructive.
Productive entrepreneurs foster innovation and diversification; the unproductive entrepreneur seeks to establish a monopoly; while destructive entrepreneurs achieve their goals through coercion, deception and environmental degradation.
Although the second and third of these three business models went unchallenged during the heyday of the fish merchants and robber barons, productive entrepreneurship is the only business model that is socially acceptable today.
I leave it to readers to decide which two of these models best describes the 50-year farce now being foisted on the ratepayers of this province.
Our provincial government has suppressed and avoided any and all reasonably objective discussions of the obscene megaproject that is Muskrat Falls, and is evidently determined to ram it through with the indecent haste of a shotgun wedding.
And who are the beneficiaries of this hare-brained scheme? Certainly not the ratepayers of this province and certainly not the people whose land will be inundated over an area of 40 square kilometres. The people pushing for this project have nobody’s interests at heart except their own.
Premier Kathy Dunderdale blithely informs us that the (borrowed) money allotted for Muskrat Falls has nothing to do with the provincial deficit, which is part of our operating budget. Who, then, will be responsible for paying down the Muskrat Falls debt?
That would still be us — the taxpayers — wouldn’t it?
So how will we be able to pay down the deficit when we are already saddled with the Muskrat falls debt, most of which we will be paying down after our oil has gone? Really, Premier Dunderdale, do you think we’re that simple?
Evidently you do.
For sheer arrogance and deceit, the present Progressive Conservative regime is every bit as culpable as the Smallwood/Wells/Tobin Liberals. As the saying goes, people who bow to those above usually trample on those below — and the politicians responsible for this looming disaster have evidently been doing lots of bowing over the past several years.
I wonder how Premier Dunderdale will enjoy having her name forever associated with a legacy that will be every bit as miserable and contentious as that of Joey Smallwood, Brinco and Churchill Falls.
Tony Rockel writes from Placentia.
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David Elliott, Thank you for your response. While it’s true that solar power in Germany is subsidized, and that these subsidies are now being reduced quite drastically because of today’s budgetary constraints (and also possibly because of lobbying by worried utility companies), consumers continue to install solar panels on their homes. On the topic of subsidies, fossil fuel companies, worldwide, continue to receive massive taxpayer subsidies (in the US, $10 to 50 Billion annually) despite being more than capable of standing on their own. At present, Germany produces 5 times more solar power than the US as a whole, even though Germany gets about the same amount of sunlight as Alaska (Washington Post Feb 8 2013). This amounts to $30 GW, (3 to 10% of Germany’s electricity). Deutsche Bank says “we see the sector transitioning from subsidized to sustainable markets in 2014.” This projection is based on the emergence of large, unsubsidized markets such as in India, where “grid parity” has already been achieved. Deutsche Bank’s analysts see a rebound in solar panel production in the 2nd half of this year, and a further drop in the cost of Chinese panels to 42c per watt in 2015, which would make solar cheaper than natural gas and coal in most parts of the world. You can dismiss the predictions of bank analysts, but you can’t ignore what’s happening in technology. What happened with computers and the internet is inevitably happening in solar and other energy technologies that I won’t go into here. Today’s solar capacity worldwide has just passed the 100GW threshold. The International Energy Agency (IEA) projects a doubling of solar installations to 230 GW worldwide by 2017. A final cost of $12 Billion for Muskrat falls is not at all outlandish: with 6.2 billion for the dam, 2.9 B for the plant and 1.2 B for transmission lines, you already have 10.3 B, and have you ever heard of a project without cost overruns? Two recent studies of cost overruns in large projects, one on rails, tunnels and bridges (Transport Reviews 2003), another on highway projects (EJTR, March 2010) showed cost overruns ranging from 40 to 200 percent. Given the number of unknowns in the MF project, I think my estimate is very conservative. NALCOR has no experience in this kind of project, and they will be beholden to the now known to be problematic firm of SNC Lavalin for all of their engineering advice. Yes, Moore’s Law is based on observations of a trend that has held consistently for over 50 years and should continue until 2020, by which time the conductors on chips will only be 1 or 2 atoms wide, and chips will have to go 3D. It is one of several such “laws” associated with the development of technology. Newton’s laws of motion and of universal gravitation are also based on observations. So we’re not talking about legislation here. Yes, Moore’s Law has to do with the density of transistors, and if you can cram twice as many of them onto the same surface area, you will have effectively halved their cost while simultaneously making them run more efficiently. Almost every other area of technology is evolving at the same exponential rate (Nature News, March 4th 2013). The original paper by Nagy et al. is in PLoS ONE e52669 (2013). See also the publications of Ray Kurzweil and Peter Diamandis (CEO of the X Prize foundation). The human brain is hardwired to think linearly:--if I take 30 steps I will advance 30 feet. This “default mode” worked fine in the hunter-gatherer era, but in the age of technology, where change occurs exponentially--- not so well. The rapidity of change on the latter scale is hard to visualize: if the power of personal computers were to double every year for 30 years (which it has), then today’s PCs would be 1000,000,000 times more powerful than they were 30 years ago (which they are, and for much less than they cost back then). In terms of battery technology, take a look at carbon nanotubes, graphene, supercapacitors, air-zinc batteries, sodium ion batteries and graphene/lithium technologies. Take a look at the work of Donald Sadoway at MIT.