August 23, 2012

Nalcor, Emera sign electrical power transmission agreements for Muskrat Falls hydro project on Lower Churchill River, Labrador

Nalcor Energy and Emera Inc. recently signed agreements on the development and transmission of hydroelectric power from Muskrat Falls, where Nalcor wants to build an 824-Megawatt generation facility on the Lower Churchill River near Happy Valley-Goose Bay, Labrador.

“Nalcor and Emera have formalized 13 agreements spanning 50 years related to the development of Muskrat Falls, the Labrador-Island Transmission Link, and the Maritime Link,” according to a joint press release from the Newfoundland and Labrador Department of Natural Resources and the Nova Scotia Department of Energy.

The agreements were signed in St. John's July 31 by Newfoundland and Labrador Natural Resources Minister Jerome Kennedy, Nova Scotia Energy Minister Charlie Parker, Nalcor president Ed Martin and Emera president Chris Huskilson.

Emera Inc., whose holdings include Nova Scotia Power, owns electric utilities in the Northeastern U.S., Atlantic Canada, St. Lucia, Grand Bahama and Barbados. Nalcor Energy provides electrical power in Newfoundland and Labrador. Nalcor’s proposed Lower Churchill Hydroelectric Generation Project includes separate facilities at Muskrat falls and Gull Island, with an estimated total cost of $6.2 billion, according to Reed Construction Data Canada Building Reports, a data service available free of charge to Daily Commercial News subscribers. Both projects require permits and approvals before construction can proceed. In March the federal and Newfoundland and Labrador governments released the project under the Environmental Protection Act subject to several conditions.

One of the proposed transmission lines is the Maritime Link, intended to bring power from Muskrat Falls to Nova Scotia.

“In exchange for developing the Maritime Link and providing transmission rights in Nova Scotia, Emera will receive 20 per cent of the output of Muskrat Falls (Nova Scotia Block),” according to a backgrounder published Tuesday. “Nalcor receives all transmission rights on the Maritime Link in excess of that required to deliver the Nova Scotia Block.”

Emera has agreed to pay 20 per cent of operating costs of the entire project until Nalcor assumes ownership of the Maritime Link after 35 years, and to pay 20 per cent of total project capital costs for 20 per cent of the energy and capacity from Muskrat Falls (Nova Scotia Block).

In exchange for Emera’s investment in the Labrador-Island Link, Nalcor will receive transmission rights in New Brunswick and in the northeastern U.S.

Emera is also entitled to 49 per cent ownership of the Lower Churchill Project transmission assets. The Labrador Transmission Assets will be owned by Nalcor and the Maritime Link will be owned by Emera.

Among the agreements signed Tuesday are the Interconnection Operators Agreement, which establishes the terms regarding safety, reliability and operability of the interconnection between the bulk energy systems of Newfoundland and Labrador and Nova Scotia.

When completed, the Labrador-Island Link will be a 1,100-kilometre transmission line across the Strait of Belle Isle, connecting Muskrat Falls with Soldiers Pond on the island of Newfoundland.

At Muskrat Falls, Nalcor proposes to build a generation station with a capacity of 824 MW. The powerhouse would contain four propeller or Kaplan turbines and a concrete dam would be built in two sections, on the north and south abutments of the river.

The north dam would be 32 metres high and 432 metres long. The south dam would be 29 metres high and 325 metres long while the reservoir would be 59 km long.

The larger of the Lower Churchill facilities will be at Gull Island, which will have a 2,250-MW station. The dam will be a concrete-faced, rock-fill construction project 99 metres high and 1,315 metres long. The reservoir would be 232 km long.

DCN DIGITAL MEDIA

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