06 January 2015

Comparative Hydro Costs #nlpoli

Konrad Yakabuski’ s column in the Monday Globe is an interesting one for people in Newfoundland and Labrador for a couple of reasons.  ‘

First of all,  Yakabuski pointed out the “broader credibility problem facing all of Canada’s provincially owned electric utilities.”

Second of all,  for all those people in this province who are complaining that the Liberals won;t release any of their policies before the election, we have had lots of time to debate the energy policy of the current administration for a decade.

For all of that time, the people currently bitching about the lack of policy debate didn’t want to debate that energy policy despite the mounds of evidence that what the provincial government was doing with the former hydro corporation was headed for bad policy.

One of the biggest problems with these outfits is their very nature.  State-owned electricity utilities are run, Yakabuski notes, “ by political appointees who answer to politicians who live to cut ribbons. The utilities are fiercely jealous of their prerogatives as near-monopoly suppliers of electricity and fight incursions by the private sector.”

Does this sound familiar?   “When they make the business case for a new publicly financed hydro megaproject, it’s hardly an objective exercise.” 

Yakabuski offers a comparison of some of the big projects currently under construction.  He notes, for example, that most of Hydro Quebec’s supply of electricity comes at an average cost of generation of two cents per kilowatt hour.  Romaine 2 will cost about six cents per kwh.  Meanwhile, the export market is sitting around three cents per kwh.

There are some comparative costs in the column. Here are the numbers in table form. 


Installed MW


Cost per installed MW

Romaine (QC)


$6.5 billion

$4.2 million

Keeyask (MB)


$6.5 billion

$9.3 million

Site C (BC)


$8.8 billion

$8.0 million

Muskrat Falls


$8.3 billion

$10.0 million

There’s no way Muskrat Falls was ever the lowest cost way of meeting domestic electricity needs even though Nalcor’s business case called for domestic consumers to bear 100% of the cost of the project.

Muskrat Falls will actually only produce the equivalent of what you’d get from a plant with 560 MW of installed capacity running flat-out.  That gives you a cost per MW of $14.8 million.