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Muskrat Falls links


Here are links to information on the project to develop the hydropower resources of Muskrat Falls on the lower Churchill River.

 Project Sanction
 » Sanction Agreement (December 17, 2012)

 » News Release: Government of Newfoundland and Labrador Announces Sanction of the Muskrat Falls Development (December 17, 2012)

 » Speech by Premier Kathy Dunderdale (December 17, 2012)

 » Video of Muskrat Falls Project Sanctioning Event including the Speech by Premier Kathy Dunderdale (December 17, 2012)

 Information from the Government of Newfoundland and Labrador
 » The Power is in Our Hands – Muskrat Falls, Controlling Our Future

 » News release: MHI Analysis and DG3 Cost Estimates Support Development of Muskrat Falls
 » Background sheet: Capital Cost and CPW Summary
 » Background sheet: CPW of Alternatives
 » Backgrounder: Infographic
 » Background sheets: Key Changes Affecting Project Estimates
 » Backgrounder: Muskrat Falls Project Map
 » Background sheets: Overview of DG Process and Results
 » Background sheets: Project Engineering and Planning Progress

 » Earlier information index page
 » News Release (November 18, 2010)
 » Backgrounder – Nalcor Energy and Emera Inc. term sheet details
 » Backgrounder – Muskrat Falls facts
 » Backgrounder – Muskrat Falls economic benefits
 » Backgrounder – Residential monthly electricity bills
 » Backgrounder (PowerPoint) – Comparative electricity analysis: Muskrat Falls vs isolated island cases
 » Backgrounder – Quick facts on Muskrat Falls development generation and transmission
 » Backgrounder – Transmission map
 » Backgrounder – Agreement with Innu Nation of Labrador
 » Audio (MP3) Announcement (57.4 MB)
 » Video (WMV) Announcement Part I (75 MB)
 » Video (WMV) Announcement Part II (81 MB)

 Social media
 » YouTube Channel for Nalcor Energy
 » About Muskrat Falls
 » Labrador Island-Transmission Link
 » About the Strait of Belle Isle Crossing
 » Muskrat Falls engineering and site preparation work

 » YouTube Channel for the Government of Newfoundland and Labrador
 » Muskrat Falls – Now is the Time
 » Developing Muskrat Falls is Best Option: Reports
 » New Power Generation is Required to Meet Future Electricity Demand
 » Report Shows Muskrat Falls will Stabilize Electricity Rates for Consumers
 » Report Shows Grand Banks Natural Gas and LNG Not Options to Provide Power to Island
 » Muskrat Falls Development Supported by MHI Analysis and DG3 Cost Estimates
 » Independent Review Shows Wind at Least $3.5B More than Muskrat Falls
 » Premier Kathy Dunderdale’s Address to Municipalities Newfoundland and Labrador
 » Premier Dunderdale addresses St. John’s Board of Trade

 » twitter.com/MF_Facts
 » About the Twitter account

 Federal Loan Guarantee Terms
 » Terms for the federal loan guarantee for the Muskrat Falls hydroelectric project with the Government of Canada and the Governments of Newfoundland and Labrador and Nova Scotia as announced on November 30, 2012

Nalcor Energy (“Nalcor”), Emera Inc. (“Emera”), the Province of Newfoundland and Labrador (“NL”), and the Province of Nova Scotia (“NS”) have informed Her Majesty the Queen in Right of Canada (“Canada”) (all collectively called the “Parties”) that Nalcor and Emera or their affiliates intend to develop, construct and operate, with the support of NL and NS, the Muskrat Falls Generation Facility, Labrador Transmission Assets, Labrador Island Link, and Maritime Link Projects (the “Projects”). Canada, NL, and NS subsequently signed a Memorandum of Agreement to support the Projects on August 19, 2011 (the “MOA”).

It is essential to Canada that the Projects have national and regional significance, economic and financial merit, and significantly reduce greenhouse gas emissions. Canada’s Guarantee of the Guaranteed Debt of each Project will significantly enhance the credit quality of the Financing of each Project. Canada hereby agrees to guarantee the Guaranteed Debt of each Project and will provide the Guarantees for the Projects as more fully described, and subject to the terms and conditions described herein. …

 Manitoba Hydro International (MHI) October 2012 report
 » MHI report: Review of the Muskrat Falls and Labrador Island HVdc Link and the Isolated Island Options (October 2012)

Conclusions: MHI has found Nalcor’s work to be skilled, well-founded, and in accordance with industry practices. The result of the CPW analysis indicates a preference for the Interconnected Island option of $2.4 billion over the Isolated Island option. Both options have increased substantially in cost due to escalation and scope change from prior estimates released in November 2010. However, the Interconnected Island option continues to have a lower present value cost given the full range of sensitivity analyses and inputs provided by Nalcor. MHI therefore supports Nalcor’s finding that the Interconnected Island option is the least-cost option of the two. …

Recommendations: Given the analysis that MHI has conducted based on the data and reports provided by Nalcor, MHI recommends that Nalcor pursue the Interconnected Island option as the least cost alternative to meet future generation requirements to meet the expected electrical load in Newfoundland and Labrador.

 Report on Power Demand
 » New Power Generation is Required to Meet Future Electricity Demand (October 2012)

(excerpt) Conclusions:

  • It is clear that we need the power. With residential sector growth expected to continue, new commercial development associated with increased economic activity and a number of potential mining developments in Labrador, additional power will be required to meet this new demand. Demand is expected to continue to rise as the province’s economy continues to flourish.
  • To ensure that power is available to all customers, the development of Muskrat Falls will ensure that all sectors have access to reliable and least-cost electricity. Muskrat Falls will facilitate the retirement of the Holyrood generating plant and the virtual elimination of green house gas emissions in the production of electricity for most of the province’s consumers.
  • Without the addition of new generation from Muskrat Falls, the province will have to rely on more expensive electricity supply options to power homes and industry. Power from the Muskrat Falls project will be available to meet much of the incremental demand growth that would be possible from future Labrador mining opportunities. Without the Muskrat Falls power supply, the result could be a loss of these mining investments and associated economic opportunities.

It is critical that sufficient generation supply exists to ensure that homes and residences have access to electricity for heating and other household requirements and that business and industry have the power they need to grow. Muskrat Falls will ensure that this demand is met with a clean least-cost source.

 Report on Oil Price Forecasting
 » PIRA’s Forecast Methodology and Assessment of Future Oil Price Trends (October 2012)

(excerpts) “PIRA is retained by more than 500 companies in over 60 countries. Our clientele includes all of the world’s major private integrated oil companies, nearly all of the largest state-owned national oil companies, and over 80% of both the oil producers and oil refiners in North America. Outside of the oil business, we also provide services to over 80% of the U.S. gas and electric companies and over 90% of the gas and power marketers. Our clients are not limited to the energy industry, as we provide consulting to two-thirds of the world’s top commercial banks, several proprietary traders and hedge funds, and many industrial end-users, ranging from airlines to automobile companies to chemical manufacturers. This wide-ranging, international clientele is indicative of PIRA’s global, balanced view, in which no particular constituency is catered to.”

…”Under these assumptions the Brent crude price will average approximately $100-105/Bbl (in 2011 inflation adjusted $) and WTI will average 5-10 dollars lower over the period from 2012-2025 with a modest decline from current levels expected for Brent and a modest increase for WTI as increased pipeline capacity eliminates bottlenecks and reduces the currently large WTI discount to Brent.”

 Report on Electricity Rate Forecasting
 » Electricity Rates Forecasting: Muskrat Falls will Stabilize Rates for Consumers (November 2012)

(excerpt) Conclusion

  • Electricity demand in this province will continue to increase over the coming years. It is clear that we need the power. Without the addition of new generation there will not be enough power to meet the demand of homes, business and industries.
  • Electricity rates will increase with or without the development of Muskrat Falls but Muskrat Falls will result in lower and more stable rates for consumers compared to the Holyrood (Isolated Island) option.
  • To ensure that sufficient power is available and that customers are protected from significant increases in the price of electricity in the future, something must be done.
  • Muskrat Falls will mean that the province is no longer reliant on Holyrood to meet demand. Muskrat Falls will eliminate reliance on expensive, foreign oil which has caused an increase in electricity rates in recent years, and will produce rates which are cheaper than rates under the Holyrood case.
  • Muskrat Falls will also provide the province with its own revenue-generating asset. With Muskrat Falls, the province will have ownership of a hydroelectric asset that will generate revenue and pay for itself over the lifespan of the project.
  • Without the development of Muskrat Falls, customers in this province will continue to experience increases in the rate they pay for electricity. Muskrat Falls will ensure that customers receive a secure and renewable source of power at the least cost possible.


 Manitoba Hydro International (MHI) Wind Study Review
 » MHI report: Review of the Wind Study for the Isolated Island of Newfoundland (October 2012)

Conclusion: …Based on these screening level study findings (at an AACE Class 4 estimate), and the inherent technical risks in such a massive wind development, MHI does not recommend that the wind options beyond a 10% penetration level, the level recommended by the 2012 Hatch study and adopted by Nalcor for the Isolated Island Option, be pursued at this time.

Investment in the Muskrat Falls Interconnected option provides a firm supply, and an opportunity to monetize the excess energy once another interconnection is made. The wind power scenarios do not provide the same value for the $11.86 or $17.43 billion costed over the study period. One must note that the wind scenarios theorized are still largely a thermal generation resource plan once the Holyrood Thermal Generating Station is replaced.

MHI finds that large-scale wind development, as a replacement for the Holyrood Thermal Generating Station, is not a least cost option and does not represent good utility practice at this time.

 Hatch Report on Wind
 » Hatch Report for Wind Integration Study – Isolated Island (August 2012)

(excerpt) A review of current and planned wind energy penetration rates worldwide found that high penetration rates came with significant operational challenges, especially in isolated systems. A penetration rate of 10% is the maximum recommended for the Island of Newfoundland system due to the uncertainty of the technical and economic impacts at the higher penetration rates which are yet to be tested under isolated system circumstances.

 Wind Integration Study
 » Wind Integration Study – Isolated Island (August 2012)

(excerpt) Based on the studies conducted, the transient stability constraint is found to be the limiting factor in determining the amount of wind penetration during the extreme light load conditions. Thus, it is recommended that no more than 225MW and 300MW of net wind generation is dispatched during the extreme light load conditions during the years 2020 and 2035, respectively.

 Ziff Energy Group Report on Natural Gas
 » Ziff Energy Group report: Natural Gas as an Island Power Generation Option (October 2012)

Grand Banks pipeline supplied natural gas is not a viable replacement for the current oil-fired Holyrood electric generation facility. While natural gas is physically available offshore Newfoundland and Labrador, it is not available on commercially viable terms for power generation.

Ziff Energy concludes that even if Grand Banks natural gas were commercially available it would be prohibitively priced for Island power generation when compared with the proposed Muskrat Falls hydro-electric power and the current oil-fired power generation at Holyrood.

LNG supplied natural gas for power generation is not a viable alternative to the current oil-fired Holyrood generation of electricity.

 Wood Mackenzie confirm Ziff
 » Wood Mackenzie analysis of Ziff Energy Group report

Wood Mackenzie generally finds Ziff’s analysis and conclusions relative to natural gas as a fuel source for Newfoundland to be reasonable in regards to the use of natural gas produced in the White Rose fields. If anything, Wood Mackenzie’s estimates of costs in this area would tend to be higher, rather than lower than those determined by Ziff. Additionally, we believe that the Government of Newfoundland may find it difficult to enter a contract for that gas that would make the producers interested in producing the gas for market due to the costs of production and the low level of requirements that Newfoundland will have for power generation.

 Labrador Mining and Power
Labrador mining and power: how much and where from? (November 2012)

$10-15 billion of capital investment in Labrador mining projects may be realized over the next decade but this is dependent in part on the availability of power.

If these projects go ahead they will bring major economic benefits to the province, through employment and taxation revenue (both direct and indirect), as well as providing opportunities for service industries.

Estimation of future power needs for planned mining developments is challenging, particularly as many projects have not advanced to the stage where firm requests for power have been made.

Based on projects already in construction or near sanction, existing generating capacity in Labrador may be exhausted by 2015-17.

Muskrat Falls therefore will be an important source of power for mining developments post-2017, and sanctioning of the project may assist mining companies in making positive investment decisions. Availability of power will encourage investment in the province rather than in competing jurisdictions.

Muskrat Falls will both provide power for future mining developments (or export markets if mining developments are slow to proceed) as well as providing sufficient power for the Island of Newfoundland. The Isolated Island option, with refurbishment or replacement of the Holyrood Generating Station or use of natural gas, will not supply the power needed for Labrador mining developments.

In the longer term (by 2021) mining developments may absorb all residual power from the Muskrat Falls development, and further power may be needed.

 Labrador Iron Ore Mining Study
Economic Impact Analysis of Iron Ore Mining Industry in Labrador 2011-31 (September 2012)

Should all projects proceed as described in Scenario 3, the iron ore industry in Newfoundland and Labrador could generate an incremental increase of $80 billion dollars in expenditures over anticipated current levels of expenditures.

Investments in Scenario 3 could generate an incremental increase of approximately 358,000 person years of employment. Similarly, total Newfoundland and Labrador incomes could rise from $20 billion under the Base Case to $30.0 billion under Scenario 1, to $40 billion under Scenario 2 and $58.0 billion under Scenario 3 for an incremental increase of $38 billion over the next twenty years.

Based on the range of iron ore prices described in Table ES2, the Base Case iron ore industry in Labrador is expected to generate an estimated $9.1 +/- 1.3 billion ($0.4 +/- $0.1 billion annually average) in total taxes paid to government over the next twenty years. Operating under Scenario 1 treasury impacts could increase to $13.7 +/- $2.4 billion ($0.7 +/- $0.2 billion annual average), $24.6 +/- $5.0 billion ($1.2 +/- $0.3 billion annual average) under Scenario 2 and $25.9 +/- $5.4 billion ($1.2 +/- $0.5 billion annual average) under Scenario 3.

 Environmental Benefits of Holyrood Station Closure
Environmental Benefits of Closing the Holyrood Thermal Generating Station (November 2012)

(excerpts) For many years, the residents of Holyrood and surrounding communities have expressed concerns and worry about the air pollution from the thermal generating plant. Newfoundland and Labrador Hydro responded by switching the plant’s fuel to a higher cost low-sulphur fuel. However, even with the change in fuel, the plant will continue to emit local air pollutants unless expensive emissions control equipment is added. This equipment, which includes scrubbers and precipitators, will cost approximately $600 to $800 million to install in addition to annual operating costs of $12 to $15 million. It is important to note that in addition to cost, emissions control equipment will help reduce sulphur dioxide emissions, but will not reduce greenhouse gas emissions.

The cost of operating the Holyrood Thermal Generating Station has increased along with world oil prices, resulting in rate increases for Island and rural diesel customers. In 2017, the annual cost of oil to generate electricity at the plant is projected to be $324 million without Muskrat Falls.

As electricity consumption rises with an increase in the number of residential, commercial, and industrial customers, the Holyrood plant will have to be used more to ensure consumer needs are met and this means that ratepayers will be more reliant on oil and oil prices.

The Holyrood plant is 40 years old. Continued use of the facility means escalating maintenance costs, significant capital investments and upgrades, emissions-control equipment, and continued dependency on fossil fuel generation.

Retiring the Holyrood plant is the equivalent of taking 300,000 cars off the road and will help to eliminate the release of greenhouse gas and sulphur dioxide emissions. This will help to address environmental and health concerns expressed by residents of Conception Bay.

Retiring the Holyrood Thermal Generating Station will help Newfoundland and Labrador and Canada meet their respective greenhouse gas reduction targets.

With the development of Muskrat Falls, Newfoundland and Labrador will be powered by 98% clean, renewable energy.

 Gull Island Option
Gull Island: Why not develop Gull Island first? (November 2012)

(excerpts) Conclusion:
The Gull Island development has not proceeded to date because of the inability to obtain transmission access across Quebec. The Provincial Government plans to develop Gull Island, but only if Newfoundland and Labrador is the principal beneficiary of development – not another jurisdiction. Without transmission access to export markets, it is not economically viable to develop Gull Island. Higher than forecast electricity demand in Newfoundland and Labrador would improve the prospects for development, but external markets remain critical for the project.

 Legal Options
Legal Options: S92A, Good Faith and Regulatory Proceedings in Quebec (November 2012)

(excerpts) Key Factors:
• The province has engaged in extensive litigation over the years in relation to the Upper Churchill, none of which has been successful.
• While Section 92A of the Constitution Act could allow for the recall of Upper Churchill power, this could result in a breach of the 1969 Power Contract between Churchill Falls (Labrador) Corporation Limited (“CFLCo”) and Hydro-Quebec (“Power Contract”) under Quebec civil law and potentially result in billions of dollars in damages.
• The desired result of the good faith action is a change in the pricing terms of the Power Contract which will result in CFLCo receiving more revenue from the sale of Upper Churchill power, and the case will take years before it is resolved. The good faith action will not result in Upper Churchill power being returned.
• Nalcor has taken two applications for review in Quebec before the Regie (the Quebec equivalent of the PUB ) for open access to transmit power from the Lower Churchill across Quebec. The Regie has refused these applications.

 The “Wait Until 2041″ Option
Upper Churchill: Can we wait until 2041? (November 2012)

(excerpts) Conclusion:
The power contract between Newfoundland and Labrador and HQ has been the source of great resentment for the people of our province for many decades. This contract has resulted in tremendous profits for HQ, while providing minimal profits to Newfoundland and Labrador.

The power contract expires in 2041, at which time the province will obtain much more control over Upper Churchill power than currently exists, and certainly benefit from the economic returns of that resource. However, Upper Churchill power is not exclusively owned by the province and Newfoundland and Labrador may consequently not have unfettered control over the resource. There will be no free power available to the province and there will be limited rights to recall power after the power contract expires.

Waiting until 2041 is not a viable alternative for several reasons. Maintaining the isolated Island system until that time, followed by the construction of a transmission link with Labrador, is more expensive than developing Muskrat Falls. There is also considerable risk and uncertainty regarding security of supply and reliability, the cost to ratepayers, and environmental compliance. Deferring the project also means deferring the province’s ability to fully capitalize on the value of its tremendous energy resources.

Clearly, the province cannot afford to take only stop-gap measures and wait until 2041 when the Power Contract expires. This date does not necessarily represent an enormous windfall of cheap or free power for the province and, in any case, the needs of customers must be met in the interim. Deferring the Muskrat Falls development represents a more costly approach to supplying power and adds a layer of cost and uncertainty as power for domestic customers will be tied to fossil fuel prices as well as the ability to extend the life of the Holyrood Generating Station to provide reliable power within potential future GHG regulatory guidelines. Waiting for available Upper Churchill power in 2041 is not a practical, economical, or sensible alternative to Muskrat Falls.

 News Releases and Speeches
 » Lower Churchill Project to Become a Reality; Province Signs Partnership Agreement with Emera Inc. for Development of Muskrat Falls (November 18, 2010)
 » Premier Dunderdale’s 2011 Throne Speech response (March 21, 2011)
 » Public Utilities Board to review Lower Churchill project (June 17, 2011)
 » NL applauds acceptance of New Dawn agreements (July 1, 2011)
 » Lower Churchill garners keen interest at conference (July 12, 2011)
 » Lower Churchill loan guarantee memorandum of agreement signed (August 19, 2011)
 » Visit by New England Governors focuses on Lower Churchill potential (August 22, 2011)
 » Premier addresses New England-Canada Business Council on energy (November 4, 2011)
 » A New Dawn for the Labrador Innu (November 18, 2011)
 » Statement issued on Muskrat Falls hydroelectric project (November 28, 2011)
 » MOU for Muskrat Falls business, employment benefits (November 28, 2011)
 » Maritime Transmission Link registered under EPA (December 2, 2011)
 » Public Utilities Board granted extension to submit report (December 14, 2011)
 » Dunderdale addresses St. John’s Board of Trade (January 31, 2012)
 » Speech from the Throne 2012 (March 5, 2012)
 » Premier responds to Throne Speech 2012 (March 5, 2012)
 » Opposition misunderstands Muskrat Falls (March 6, 2012)
 » Muskrat Falls means power for Labrador industry (March 7, 2012)
 » Muskrat Falls clears environmental assessment (March 15, 2012)
 » Province responds to release of PUB report (April 2, 2012)
 » Kennedy speaks about Muskrat Falls Project (May 3 and 15, 2012)
 » Formal Agreements Signed Between Nalcor Energy and Emera Inc. for Muskrat Falls Development (July 31, 2012)
 » Premier addresses St. John’s Board of Trade (October 3, 2012)
 » Premier addresses Municipalities Newfoundland and Labrador (October 6, 2012)
 » MHI Analysis and DG3 Cost Estimates Support Development of Muskrat Falls (October 30, 2012)
 » Independent Review Shows Wind at Least $3.5B More than Muskrat Falls (October 31, 2012)
 » Report Shows Grand Banks Natural Gas and LNG Not Options to Provide Power to Island (November 1, 2012)
 » Reports on Labrador Mining Support Need for Power (November 1, 2012)
 » Report Shows Muskrat Falls will Stabilize Electricity Rates for Consumers (November 6, 2012)
 » New Power Generation is Required to Meet Future Electricity Demand (November 7, 2012)
 » Developing Muskrat Falls is Best Option – Reports Released on Waiting Until 2041, Developing Gull Island First and Other Legal Options (November 9, 2012)
 » Significant Environmental Benefits to be Achieved with Closing Holyrood Thermal Generating Station (November 16, 2012)
 » Government Releases Independent Analysis Supporting Ziff Energy Report (November 26, 2012)
 » Speeches in the House (November 28, 2012)
 » Speeches in the House (November 29, 2012)
 » Premier, Prime Minister Announce Agreement on Loan Guarantee (November 30, 2012)
 » Speeches in the House (December 3, 2012)
 » Premier addresses Canadian Club of Toronto (December 3, 2012)
 » Speeches in the House (December 4, 2012)
 » Technical Briefing on Federal Loan Guarantee Agreement (December 4, 2012)
 » Federal Loan Guarantee Agreement Released (December 4, 2012)
 » Terms of Reference Released for Independent Reports on Muskrat Falls (December 5, 2012)
 » House of Assembly Passes Motion in Support of Muskrat Falls (December 5, 2012)
 » New Policy Introduced to Ensure Competitive Electricity Rate for Industrial Customers in Labrador (December 11, 2012)
 » Government of Newfoundland and Labrador Announces Sanction of the Muskrat Falls Development (December 17, 2012)
 » New Legislation to Help Advance Muskrat Falls Hydroelectric Project (December 18, 2012)
 » Proposed Amendments Support Financing of the Muskrat Falls Development (December 18, 2012)
 » Project Oversight Agreement Released (December 20, 2012)
 Information from Nalcor Energy
 » Nalcor Energy website
 » Muskrat Falls project
 » Nalcor Energy Lower Churchill Project
 » Project Benefits
 » Reviews and Assessments
 » Information Centre
 » Formal Agreements
 » Public Consultations
 » Questions and Comments
 Information from Emera Inc.
 » Emera Inc. website
 » Emera Newfoundland & Labrador website
 Information from the Public Utilities Board (PUB)
 » PUB report
 » Provincial government responds to PUB report
 » PUB website
 » Complete documentation
 » Webcasting of hearings, February 13-16, 2012
 » Archives of hearings, February 13-16, 2012
 Earlier Manitoba Hydro International (MHI) report
 » MHI report website
 » Executive summary
 » Volume I
 » Volume II
 Consumer Advocate report
 » Consumer Advocate final submission, March 2, 2012
 Navigant report
 » About the review
 » Full report

Based on its independent review, Navigant has concluded that the Interconnected Island alternative is the long‐term least cost option for the Island of Newfoundland. Relative to the Isolated Island alternative, the Interconnected Island alternative is also expected to provide similar levels of security and reliability, significantly reduced greenhouse gas (GHG) emissions and significantly less risk and uncertainty. The Interconnected Island alternative also provides a gradual decrease in real (adjusted for inflation) average wholesale electricity rates for the Island.

Navigant has concluded that Nalcor’s consideration and screening of the supply options as well as the assumptions used by Nalcor regarding these options were reasonable and consistent with generally accepted utility practices. Nalcor’s process to evaluate the supply options and estimate the rate projections under the two alternatives was also found to be reasonable and consistent with generally accepted utility practices.

 Environmental Assessment Joint Review Panel report
 » Executive summary
 » Full report
 » Provincial website for the environmental assessment
 » Federal website for the environmental assessment
 » Nalcor website for the environmental assessment (generation)
 » Nalcor website for the environmental assessment (transmission)

 » Muskrat Falls clears environmental assessment
 » Government of Canada’s response to the Joint Review Panel report
 » Government of Newfoundland and Labrador’s response to the Joint Review Panel report