CEO cautions tentative timeline could be further affected by COVID-19
If all goes according to plan, Nalcor Energy CEO Stan Marshall can envision a fully-commissioned Muskrat Falls one year from now.
Speaking at the provincial Crown energy corporation's annual meeting Tuesday, Marshall did caution there's an elephant in the room, one that's unpredictable and already the cause of considerable delays to the multibillion-dollar project.
The COVID-19 pandemic.
"The COVID-19 pandemic will persist for the remainder of the year and will probably continue into 2021," Marshall said during the meeting, which usually takes place in April but was delayed and moved entirely online in light of the ongoing pandemic.
"Any outlook is therefore clouded by the uncertainty and disruption this is causing."
The hydroelectric project, now expected to exceed $13 billion in cost, does have an end in sight, with 99 per cent of the work completed. Equipment installation and commissioning work resumed recently at the Muskrat Falls site after almost four months of inactivity, with Marshall noting this work is happening at a reduced level due to the pandemic.
Software issues have delayed the Labrador-Island Link, but Marshall said interim software should be installed for trial operation within the next month. Also due to be ready before the end of the summer is a fully-commissioned first generating unit to generate first power. The second unit of four in total would follow in the late fall.
"The COVID-19 pandemic will persist for the remainder of the year and will probably continue into 2021. Any outlook is therefore clouded by the uncertainty and disruption this is causing." — Stan Marshall
All other elements of the project should be finished in the first half of 2021, leading to a fully-commissioned site one year from now, Marshall said.
"For me, the last four years at Nalcor have been extremely challenging, and I am disappointed that the Muskrat Falls project has not been completed in that timeframe," said Marshall, who has hired in 2016 and earlier this year agreed to extend his stay as the CEO until the hydroelectric project is finished.
"However, the end is in sight, even through the fog of the COVID-19 pandemic. I am very proud of what we've been able to achieve at Nalcor over the past four years. None of this could have been possible without the continuing support of our dedicated employees and our board of directors, and I thank them all."
One of those additional elements likely to go live in the first half of 2021 would be the third generating unit. Once that's operational, Nova Scotia-based Emera, owner of Nova Scotia Power, is due to receive 20 per cent of the power generated at Muskrat Falls. A 35-year Energy Access Agreement between Nalcor and Emera gives Nova Scotia ratepayers market-price power and offers Nova Scotia Power a first look at excess power.
Earlier this year, the final report from the Muskrat Falls Inquiry was released, outlining a variety of poor decisions made to ensure the project proceeded, even if it failed to serve the best interests of Newfoundland and Labrador residents. The provincial government first announced its intention to proceed with developing Muskrat Falls in 2010, with the initial cost estimate for the project below $7 billion.
"The recommendations from these proceedings will need to be carefully considered by our management team and discussions held with our board of directors and our shareholders," Marshall said.
In the financial updates announced Tuesday, Nalcor reported a year-end profit of $126 million for 2019, down $54 million from the $180 million profit reported for 2018. For the first quarter of 2020, the corporation recorded a loss of $171 million, a $263 million decrease from the $92 million profit recorded for the same time period last year.