11 February 2016

Nalcor: Generations #nlpoli

Telegram editor Peter Jackson took a hard look this week at the implications of Nalcor’s effort this week to jack up electricity rates.

As part of the company’s rate application to the public utilities board,  Nalcor said a relatively dry season on the island had deleted its water reservoirs.  As a result it had to burn more oil to make electricity and therefore ratepayers needed to cover that cost.

Jackson notes that with Nalcor’s plan to scrap the Holyrood generating station, we’ll be left to rely on Muskrat Falls and its relatively small reservoir.  That small reservoir means the Muskrat Falls generators will depend on a water management arrangement with Churchill Falls.

And then Jackson puts everything in perspective:
Hydro-Québec has sought a clarity ruling on that agreement. They want to make sure it doesn’t impinge on its water rights or power contract.
There’s no way of knowing the outcome of that ruling, but suffice it to say the ability of Nalcor to adjust the flow of water to Muskrat at will is still up in the air. 
One more thing: climate change models predict drier than normal spells for this region, along with more intense bursts of precipitation. That makes reservoir management all the more unpredictable. 
What does all this mean? A whole lot of uncertainty when it comes to this province’s future power supply.
That was the second column at the Telegram this week that pointed out problems with Muskrat Falls.  In itself, that is a gigantic sign of how far public opinion about the project has shifted, fundamentally.

For our purposes, though, let’s note that Jackson very accurately and very succinctly pointed out a gigantic problem with Nalcor’s current plans.  Regular readers  know that the water management agreement is actually crucial to the operation of Muskrat Falls itself.  If Hydro-Quebec winds up controlling water flows on the river to meet the 1969 agreement, Muskrat Falls will be more valuable as a tourist attraction – the Danny Williams/Kathy Dunderdale/Dwight Ball Memorial Sinkhole – than as a generating plant.

Water management is an issue for all hydroelectric generators anyway. Muskrat Falls just has a particularly bad problem. The fuel may be free and renewable but it isn’t always available when you need it or in the quantities you need. 

That’s why in most cases, well managed electricity systems have a few types of generators available.  Some kind of thermal generation gives power that can come on suddenly to meet a growth in demand (load) or to take up the slack if there is an outage caused by a failure in a feed line or another type of generator.  And just as easily as you can fire it up,  you can turn off a thermal generator when you don;t need it.

That’s why the pro-Muskrat claim that the Wonder-Project would eliminate that nasty old oil-fired generation.  There’s really no way it could, not even if Nalcor could get some arrangement to bring in electricity from somewhere else.  You’d still need  domestically controlled thermal generation, just in case.

And when the actual detailed Nalcor plan appeared in public – courtesy of the utilities board hearing – there was a whole raft of new thermal generation set to be built after Muskrat Falls came on line.  In fact, Nalcor plans to install more thermal generating capacity in total after Muskrat comes on line than they currently have at the Holyrood generating station. 

Nalcor will be firing up those generators in the scenario that Peter Jackson describes in his column this week.