The Maritime Link and wind energy development

The following comprises the essential content of an unacknowledged submission to then-minister Jerome Kennedy in March of 2012.

On several recent (ca. 2012) occasions both Nalcor and government have correctly stated that large-scale wind energy development on the Island is not feasible in the absence of a connection to the North American continental grid. Why then should not one consider such a project which includes a maritime transmission line as an integral component of the project? The following indicates that such an initiative would be a cost-competitive alternative to the Muskrat Falls Proposal (MFP).

As a component of the (then) $6.2 billion MFP, the cost of a 500-MW maritime link has been estimated by Nalcor at $1.2 billion. From estimates provided in the report to the PUB by Manitoba Hydro International (MHI) the installed cost per MW of wind energy generation is about $2.3 million. The capital cost of an 824 MW wind energy project is thus estimated at $1.9 billion, for a total cost of $3.1 billion, including the Maritime Link. The per-mw installation cost of $3.8 million for the overall project is then about 50 per cent of the corresponding ($7.5 million) number for the MFP. More realistically one should estimate the average annual cost per MW that would actually be produced by such a wind facility when compared with the MFP. This is estimated via the so-called “capacity factors” which are stated in the MHI report as 40 per cent and 68 per cent, respectively. The resulting per-mw numbers for wind and the MFP are then very nearly the same at $11 million.

It is concluded that such a wind generation scenario is at least competitive with the MFP and should be considered in greater detail. There is no evidence that this option has even been identified by Nalcor or by government.

Additional essential points to note are: (1) The wind farm could be centrally located on the Island in close proximity to the Island terminus of the maritime cable, thereby eliminating most of the transmission losses associated with the MFP. (2) The probability of cost overruns (exclusive of the maritime seabed cable) is lower than for the MFP because wind turbine installation has become a well-established process which is not prone to the many difficulties that would be likely to plague the MFP. (3) There is no requirement that the targeted full capacity, whether it be 824 MW or something very much less, should be developed at the outset. It could, for example, be staged incrementally over a number of years at 50 or 100 MW per year, and some of the cost could be absorbed on a pay-as-you-go basis. (4) Because of the inherent incremental nature of the project, i.e. it is not an “all or nothing” proposition like the MFP, new electricity generation would be available far in advance of the projected completion date for the MFP. (5) Together with implementation of conservation measures (which have summarily been dismissed by Nalcor) this could very well bridge the gap to 2041 much more economically than the MFP.

Maynard J. Clouter

Professor Emeritus, MUN Department of Physics & Physical Oceanography