17 January 2010

Lower Churchill, Nova Scotia and NB Power: “The sheer economics of it…”

And it is not like people haven’t said this before:

Premier Darrell Dexter said he’s not surprised Newfoundland and Labrador is looking for a cheaper option than an underwater cable connection to Nova Scotia for moving energy from Lower Churchill to market.

"The sheer economics of it are undeniable in terms of a transportation corridor for that energy," the premier said after a cabinet meeting Thursday.

Read down a wee bit further in the Chronicle-herald story and you get this:

An SNC-Lavalin transmission system study for the Nova Scotia government estimates the cost of connecting Newfoundland and Nova Scotia at $800 million to $1.2 billion. The estimate of connecting Nova Scotia to New England is $2 billion to $3 billion.

Yes, stringing underwater power cables from some point in Newfoundland and Labrador to Nova Scotia would cost at least $1.2 billion.  Initial cost estimates are always low on megaprojects like this. 

But to get to that bit, you’d have to string the long from Gull Island, down to the coast of Labrador, across to the island of Newfoundland down to some point on the southwest coast of the island to get to the bit that costs at least $1.2 billion.

The cost of that plus the line out to Soldier’s Pond near St. John’s would be $2.0 billion or more.

You can tell the Nova Scotia option was never being seriously considered.  There isn’t any plan to do it currently under environmental review.

Now all this too has to make you wonder why Darrell joined in attacking Shawn Graham in New Brunswick. His whole position on this just didn’t make any sense before. And it really doesn’t make any sense now that he admits he knows the whole power line to Nova Scotia is just so much crap.

In fact, Dexter acknowledges the whole thing is crap because he adamantly insists that there’s no way Nova Scotia taxpayers would be on the hook to help build it.

“We’re not going to build it,” he said.


Not surprisingly, NALCOR Energy boss Ed Martin is talking about the cost of land transmission through Quebec. Hearings into NALCOR’s application/objections on that front are due to start this week. Land transmission is pretty much the only economically viable way of getting Labrador power out to any market.

The current estimate for building a new set of power lines across Quebec is $3.0 billion.  That’s not bad considering the estimates for the line Soldier’s Pond for a mere 800 megawatts.

You can tell the crowd at NALCOR understand the whole game currently being played.  Look at the way it wound up in the Telegram over the weekend:

Regardless of what happens, officials say the regulator's decisions will provide certainty for Newfoundland and Labrador's energy corporation as it tries to get the Lower Churchill hydro project off the ground.

"We've collected all the information we need," Nalcor Energy president Ed Martin said in an interview.

"This is one of the key pieces left. I'm going to have enough information (after) this to be able to complete my discussions with potential customers."

When people start talking about certainty, then you know they’ve comes to terms with reality.  “At least we’ll know for sure…” should be one of the stages of grief.

For the record and just for all those people who are still over the shock that the line through Gros Morne was a political racket for nothing, let’s get this straight as well.  The provincial government isn’t concerned that Hydro-Quebec is blocking the precious Legacy Project.

At least one person in the government is pissed off that the whole thing just can’t get off the ground for one simple thing:

the sheer economics of it.