ST. JOHN'S, N.L. — The Holyrood Thermal Generating Station will continue generating for at least one year longer than previously planned by Nalcor Energy.
Nalcor Energy sent a letter to the Board of Commissioners of Public Utilities (PUB) on Feb. 14 notifying the board of the extension.
“The schedule for construction and commissioning of the Muskrat Falls project has changed over time for various reasons,” reads the letter.
“Therefore, the planned transition of Holyrood to post-steam operation on March 31, 2021 is not expected to be possible.”
Holyrood's decommissioning as a generating station has been pushed back to March 31, 2022.
Speaking with reporters at Hydro Place on Tuesday, Nalcor Energy CEO and president Stan Marshall said that as long as reliability concerns continue with the Labrador-Island Link (LIL), Nalcor could continue extending the life of the Holyrood power plant for the foreseeable future.
“I keep saying if you’re not satisfied with the performance of the LIL and everything else, then keep it for another year. It’s not going to fall apart,” he said.
“In fact, performance this winter, and we just came through another peak, there was not a glitch.”
The extension is part of the reason why the provincial government allowed Newfoundland and Labrador Hydro an increase in how much money it’s allowed to borrow. A cabinet order dated Feb. 20 increased the allowed borrowings from $300 million a year to $500 million a year.
In a statement, Natural Resources Minister Siobhan Coady says the previous borrowing limit was outdated.
"The $300-million borrowing limit was established over 30 years ago and is outdated from an inflationary perspective,” reads the statement.
“This increase in borrowing limit is necessary to ensure the utility has access to funds to cover short-term requirements.”
Marshall said one of those short-term requirements is fuel for Holyrood.
“If you’re going to operate Holyrood for another year, you have to buy the fuel. You’re close to the limit anyway. It’s not the full $200 million, but you need to extend it,” he said.
Part of the premise of the Muskrat Falls hydroelectric project when it was first pitched was the need to eliminate the Holyrood Thermal Generating Station, due to its high fuel costs and high emissions.
Lingering issues
Issues with the software needed to safely operate the LIL continue to be worked through, but not without further cost to the schedule. The software was originally due in January, but Marshall said it will be mid-April before the first version of the software is available for testing.
“There are a number of bugs there that we felt we should, rather than proceed to the next stage of testing, go back and fix those first,” he said.
“Overall, we’re looking at a two-month delay. Disappointing, but we are getting there.”
The full-power testing for the LIL will not occur until Sept. 1. But according to a filing with the PUB, the risks remain high.
“The risk for further schedule slippage associated with the (interim software) milestone remains high, which has the potential to impact the final software delivery schedule,” reads the letter.
“Nalcor advises it is assessing all options to mitigate further schedule slippage for both the interim and final version of software to ensure needed levels of power and energy can be delivered to (Newfoundland and Labrador) Hydro and Emera.”
“Overall, we’re making progress. Not necessarily as much as we’d like or hope for, really. But we’re getting there." — Stan Marshall
Marshall said he remains confident in the $12.7-billion price tag for the Muskrat Falls project.
“Overall, we’re making progress. Not necessarily as much as we’d like or hope for, really. But we’re getting there,” said Marshall.
He says the June 2017 cost and schedule update for the Muskrat Falls project remains in place.
“Unless something unusual happens, I won’t be giving another cost update,” he said.
Marshall says the current plan is to get first power from the Muskrat Falls project in March, with all four turbines and generators running at full power by the end of the year.
Marshall says the delays mean his tenure as Nalcor CEO has been extended. He said he couldn’t be specific, but Premier Dwight Ball has asked him to stay on for a “few more months” as the project nears completion.
Twitter: @DavidMaherNL
