Well, at least not under a variety of American state and federal laws in New England especially if you are proposing a hydroelectric project like the Lower Churchill.
Sure, we all think of hydro power as pretty friendly to the environment and a source of energy that is pretty low on carbon emissions.
Heck, in the ruckus over erections in Gros Morne, the provincial government has been pretty quick to talk about how green – as in environmentally friendly - the Gull Island and Muskrat Falls projects are.
As an aside – in some of the online discussions, some people have been talking about ripping through the park because it’s a way to sell the power to the United States. Let’s get this clear: there is no current proposal to build any transmission lines to the United States through Gros Morne park.
The line that Danny Williams would drive through a UNESCO World Heritage Site ends just west of St. John’s. It’s the same line Brian Tobin proposed in 1998.
That’s right.
It’s a line to bring Lower Churchill power to townies, not Yanks.
And while we are at it, Holyrood will not close either even with the infeed.
The comments coming from some quarters makes plain just how much fundamental ignorance – lack of information, awareness and understanding – there is out there about major public issues.
But anyway, back to green energy and American markets.
Turns out that American state and federal governments are working to develop new, renewable sources of energy. They are looking at a system of emission credits and what sorts of projects would qualify for credits.
If the current trend holds, Big Hydro projects - just like nuclear plants - won’t count toward renewable energy credits. New England states have various rules in place currently that look at qualifying hydro power from plants of less than 100 megawatts. In some states, even these small hydro projects must not change the water level (i.e. no dams) or otherwise impact the natural environment.
A bill currently in the United States Senate – HR2454 the American Clean Energy and Security Act 2009 – limits hydro that qualifies for certification to incremental power from technological upgrades to existing plants, generation from existing dams built for other purposes and “hydrokinetic generation”, that is power generated by ocean currents, wave action and the like.
So two honking great dams across a river, even a few thousand miles away, isn’t necessarily where the Americans are looking. Missing MOU anyone?
Not surprisingly, some states are looking to find a local economic spin-off from new energy sources. Rhode Island recently adopted a bill mandating the state electricity distribution company to enter into long term power purchase agreements for upwards of 90 megawatts of power from new renewable sources locate din Rhode Island. They are looking at a $1.5 billion wind farm project - among other things - to help meet that requirement.
This doesn’t mean that the New England markets are closed to hydro power from Canada but it does mean that proponents of the Lower Churchill are not looking at easy pickings.
If states and the US federal government are getting stickier about local renewable projects, there’s a very good chance they’ll get stickier about imports as well.
That’s the thing about American democracy: people get to participate. If an environmental lobby builds up against a project like the Lower Churchill, the thing could have a rough ride. Imagine what might happen if environmentally conscious consumers managed to figure out that the same people promoting this hydro megaproject are the same people who turn up on CNN promoting some old-fashioned seal bashing.
There’s anothing thing too: look closely at some of this legislation, like say the Rhode Island bill, and you can see limits on the length of the purchase agreements with a maximum of 15 years. That’s also an issue to think about given that a project the size of the Lower Churchill would likely be financed over a period twice or three times that.
Are states going to be willing to sign PPAs over such a long period?
Would bondholders be prepared to offer up cash with the prospect that markets could go soft half way through the bond life? How about American lenders who are already hurting through the recession and who may still be leery of investing large sums even after the recession ends?
Any way you want to look at it, the Lower Churchill project is still a very long time from starting.
There are currently no power purchase agreements of any kind with any customer. No PPAs means financing will be much tougher on a project that was estimated to cost at least six to nine billion dollars when talk about the project was revived in 2005-2006. Imagine what it will cost in two years time.
The environmental review process won’t finish until 2011 and that alone puts the project two full years behind the schedule mapped out in 2006. Hydro Quebec is already well on its way to having power to market from new projects by the time NALCOR is looking to start construction of the Lower Churchill. They’ll have a goodly chunk of their new projects done by the time Muskrat and Gull Island turbines start turning, even if the current 2018 timeline for first power could be met.
On top of that there are serious questions that still exist within the Innu community about the draft land claims agreement between the provincial government and the Innu. Bear in mind that the federal government should be in there as well, but so far hasn’t offered any comment on the darkness that has befallen the New Dawn.
And all of that is without considering the potential for even a teensy bit of public backlash over environmental issues.
It really isn’t easy being green, is it?
-srbp-