176
megawatts of “stranded non-thermal power capacity” is a lot of power. It is now being wasted, “spilled” is the
acronym, in Central Newfoundland while we continue to pay for the fuel burned
at the Holyrood Generating Plant.
Where is the
power and why would Nalcor waste 176 MW capacity even for a single day?
Firstly, Nalcor has acknowledged, in emails obtained by this Blog, the existence of 176MW of surplus non-thermal generation.
In
an Information Sheet released by Nalcor, ostensibly to highlight the evils of
the place, it stated: “In peak production, the Holyrood plant burns
approximately 18,000 barrels of oil a day to meet the electricity needs of the
island.”
Firstly, Nalcor has acknowledged, in emails obtained by this Blog, the existence of 176MW of surplus non-thermal generation.
The power is
being “spilled” in Central Newfoundland.
The other facts are also straightforward.
The
transmission line from Bay d’Espoir to the Western Avalon has a capacity of 319
MWs and according to Nalcor is “terminally constrained and unable to transfer the increased
power”. The construction of a new transmission line,
says a Nalcor Submission to the PUB, “will permit deliveries of 495 MW of
hydroelectric generation to the Avalon Peninsula prior to the start of the
first oil-fired unit at Holyrood.”
It stated on
page 37 of its PUB Submission that the new line will provide for “improved
efficiency of the generators at Holyrood...reduced fuel consumption and in turn
may reduce the potential for spill at hydroelectric facilities."
If the
capacity is available and the need on the Avalon proven by Nalcor’s own
forecasts, you may well ask, why isn’t the TL Upgrade approved and construction
underway? Why does such a huge waste of
power continue? Why will the problem not be dealt with until 2017? Why can’t Premier
Dunderdale’s ‘international experts at Nalcor’ deal with the issue?
It is not
clear how long ago Nalcor knew it needed the upgrade. The closure of the Stephenville Paper Mill,
in 2005, is a likely starting point. The
fact that “east of the Isthmus” consumes nearly 70% of the Province’s power and
“the growth area” is also old news.
In
particular, the closure of the Grand Falls Paper Mill, in 2009, was a pivotal
event. Undoubtedly, Nalcor consulted
with the Government over the expropriation of the Mill’s power assets. What is certain is that by 2011 Nalcor and
the Government knew that the Mill would never re-open.
The only
sensible business case available to Nalcor was to get that power to the Avalon
in the fastest possible time.
For
reasons I will describe, Nalcor delayed the Application to
the PUB for approval of the line on several occasions. Formally, an Application arrived in the Offices of the PUB, in 2011, just prior to its Submission of the Muskrat Falls
Project. Preferring that the PUB hear
the Muskrat Application first, Nalcor withdrew the request for approval of the Bay
d’Espoir TL upgrade.
Why it did
not re-apply, following the PUB’s Decision on Muskrat Falls is a mystery.
Muskrat
caused no technical issue to advancing the Upgrade. On its technical merits, Nalcor assured the PUB
that the proposed upgrade “…meets all of the technical requirements for the
Labrador Infeed Scenario.”
The Bay
d’Espoir Upgrade was expected to do more than save money on fuelling Holyrood. It was expected to ensure security of supply
in the event of contingencies involving the loss of the Labrador Infeed via
import from the Maritimes. Nalcor also
informed the PUB in a “worst‐case scenario….if a unit at Holyrood were to be
damaged (sound familiar?) or otherwise out of service” (page 17) it “would put
a significant strain on the Bay d’Espoir East transmission system.”
The closure
of Holyrood was the centerpiece of the Government’s argument for sanctioning
Muskrat Falls. It spoke of the need to displace greenhouse gases as well as stop
the use of #6 Fuel. Nalcor’s Submission to the PUB contained this claim:
By 2015, electricity demand on the island is
expected to reach the same level as 2004 when we hit an historical peak in
electricity use, and it will continue to grow from residential, commercial and
industrial electricity usage.
Almost all extra load growth on the island
from today, including the addition of Vale Inco’s large industrial load at Long
Harbour commencing late in 2011, will cause Holyrood output to once again
increase. The Long Harbour hydromet plant at full load in 2016 will require the
burning of an additional 1.1 million barrels of heavy fuel oil at the Holyrood
thermal plant every year under normal hydroelectric production conditions.
Even as it
warned us about Holyrood, what did Nalcor do?
It withdrew the Application it had placed before the PUB without waiting
for its almost automatic approval.
Nalcor still hasn’t returned.
“In order
for this transmission line to be in service prior to the proposed HVdc interconnection in 2017, line, adds the
Nalcor Submission, “construction must begin in 2012…” (Note the word “prior”
which I have bolded.)
When Newfoundland Hydro (Nalcor) was asked, why
the Bay d’Espoir TL upgrade has been delayed since the Sept 2011 submission to
PUB, it stated in an email dated Oct 14, 2013:
“In light of
project sanction (for the first phase of the Lower Churchill Project), analysis
was undertaken within Hydro to reaffirm the requirement to construct the new
230 kV transmission line between Bay d'Espoir and Western Avalon and prepare a
revised capital cost estimate for the project.
Given a required in-service date of the end of 2017, the project need
not be submitted to the Public Utilities Board for approval until the fall of
2013.”
The response
is quite incredible. Given the huge
block of power capacity being “spilled”, the forecast quantity of fuel demanded
by Holyrood and the inability of the current transmission line to carry more
current, what was left to “reaffirm”? How
much time does it take to update a relatively small ($209 million)
project?
Given that
the transmission line could have been brought into service in 2015, how do you
make the case for delaying saving money until 2017?
There is no
doubt that the availability of 176 megawatts would have delayed the then
predicted energy shortage on the island by several more years. It also would have made the case for Muskrat Falls
appear much weaker.
But starting
the Transmission Upgrade as soon as it was confirmed that the Grand Falls Mill
would not re-open would have saved the Newfoundland ratepayer millions and continue to do so.
Why did Nalcor not seek approval of the Upgrade?
Today's Post "Firm and Unfirm" in Ed Hollett's Blog "The Sir Robert Bond Papers" tells a goodly part of the reason.
You are going to hear a lot more about the importance of the Bay d'Espoir Hydro Plant to the deal on the Maritime Link with Nova Scotia.
In the meantime, I don't suppose Nalcor and Premier Dunderdale would like to come clean with the people of the Province?
Today's Post "Firm and Unfirm" in Ed Hollett's Blog "The Sir Robert Bond Papers" tells a goodly part of the reason.
You are going to hear a lot more about the importance of the Bay d'Espoir Hydro Plant to the deal on the Maritime Link with Nova Scotia.
In the meantime, I don't suppose Nalcor and Premier Dunderdale would like to come clean with the people of the Province?
