That's two thirds more than the original estimate of $5.0 billion.
Okay.
So if a project estimate prepared by people highly experienced in these types of projects and who have a keen interest in cost control has climbed by 66% in such a short period, odds are good that we can also change any cost estimates for a bunch of people with a lot less experience in building gigantic projects.
Like say Nalcor, a company that has, contrary to its own claims, shag-all experience in megaprojects.
They tell the world that a dam on the Lower Churchill river and a bunch of transmission lines will cost exactly the same as it would have in 1998: roughly $6.2 billion.
Yeah, sure, buddy.
Put a Hebron cost multiplier on that sucker and you get $10.2 billion. We have not even factored in any inflationary impact.
But that is bad enough.
We are not done yet.
According to Premier Kathy Dunderdale, Muskrat Falls power would cost 14.3 cents per kilowatt hour to produce. That is based on the project cost of $6.2 billion.
So if we can reasonably increase project costs by 66%, you can increase the cost per kilowatt hour by a similar amount.
Do the math.
It isn't pretty.
- srbp -
3 comments:
Very good, I had written about this a couple weeks go somewhere else. I just wasn't sure what year the estimate was made but my conclusion is the same as yours. I don't see how the rate payer can expect to pay less than 20 cents a kwh. In fact 25 to 30 cents a kwh is very likely. We are surely F'ed.
Why not have a call for tenders, get committed quotes, and then know where you stand? That would sell their case for them right? Or would it?
Brad, it is an expensive project no matter how you slice it.
The thing to do is make sure the decision is made on a sound business analysis not - as the current one obviously is - based entirely on political bullshite.
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