The glut of natural gas in the North Eastern United States has certainly changed the water on beams when it comes to the development of costly infrastructure of wind and hydro projects designed to be underwritten by the export of energy to American markets.
Electricity producers like Hydro Quebec just can not compete with cheap gas. While the American railroad and coal mining sectors are being hit hard by this new, cheap and abundant source of energy, their are impacts north of the border as well.
Cheap natural gas in the United States does not solve the future energy demands of Newfoundland or Labrador. In fact, it complicates our energy needs because the hopes of a lucrative export market for surplus power has vanished like a scalded cat. The market opportunities that existed in 2009 are gone. We can no longer count (if we ever could) on this market to underwrite the development of Muskrat Falls.
It is time that the government axe the Emera component. There is absolutely no logical reason to build a transmission line to Nova Scotia at this point. It would be like building a high-tech hydroponic cucumber Greenhouse in Mt. Pearl and dumping the unprofitable veggies in Nova Scotia - except a lot more costlier that that $30 million debacle.
While it is encouraging that the province has finally seen the light -or felt the sting of a loss of credibility, and commissioned studies on natural gas and wind power, I think there is at least one other option they need to consider.
This option has been discussed on P&P at length but it may not be all that palatable to politicians and nationalists. Why are they not costing the expense associated with building a transmission line from Churchill Falls to the Avalon where we could buy cheap power from Hydro Quebec.
What, you say, buy hydro from Hydro Quebec. Surely, I have lost my mind.
In fact, I have not. Hydro Quebec will want to sell surplus power as the natural gas drives them to loose revenue. We would be able to address our energy needs without the risk of building Muskrat - at a fraction of the cost. It is unfortunate that the Consumer Advocate did not advocate for such an inquiry on behalf of hydro consumers.
I think that Recall Power is the key to solving our short-term energy problems (to 2041). This could be augment by purchasing additional power needs at market rates or using non-utility generated power to fill gaps.
Recall power from 2017 to 2041 is assumed to be available at 2 $ per MWh consistent with the 1969 agreement. It is assumed that there is 1000 GWh of energy available under the RECALL arrangement. The cost of purchasing the remaining need is still much cheaper than building Muskrat at this time.
Perhaps such an arrangement could lead to a more equitable arrangement with Hydro-Quebec over the ghost of Churchill Falls.
We must take a combined view of our domestic energy demands over the next 50 year period.