The total forecasted project cost for the Lower Churchill Project is set to increase from C$13.11 billion to C$13.37 billion, Newfoundland and Labrador Hydro has confirmed, stating that it will not need any equity from the province and will cover the increase through internal funding sources.The company has also shared an update on the development of software required to complete the Labrador Island Link (LIL) portion of the project.
Hydro has been transferring power over LIL as conditions allow, and reached a peak transfer of 421MW. To date, LIL transmission assets has delivered approximately 340GWh of Muskrat Falls power to homes and businesses in Newfoundland that would otherwise have been served by the Holyrood Thermal Generating Station.
The company said it continues to work with GE to advance the software required to appropriately operate the Labrador-Island Link at varying levels. The latest version of the full function bipole software was tested at the offsite facility in Stafford recently, and passed factory acceptance testing (FAT). That latest version of software has now been loaded onto the system for the next testing phase.
Additional tests are planned over the next couple of months, including testing at 475MW, which if successful will allow Hydro to operate the LIL between 450 and 675MW. If LIL performs well as this level, Hydro will test functionality at 700MW. This test will require colder weather and higher system demand and is expected to take place in the fall.
Facilities capital cost (the cost of construction) remains the same as the September 2020 update at C$10.18 billion, with no impact on the forecasted cost as a result of the recent decision of the Astaldi Arbitration Tribunal.
In response to the current LIL timeline, carrying costs have increased by CAD $256 million, which resulted in the forecasted total project cost increase.
“We know that any change in the cost of this project is challenging for customers. We have been working to manage the risks we have faced. While there have been challenges along the way, and there may be more, we are making progress,” commented Jennifer Williams, President and CEO, Newfoundland and Labrador Hydro. “The plant is producing, and we are delivering power from the plant, over the LIL, to Island customers and Nova Scotia. We have work to do over the coming months on the commissioning, but we want customers to know we prioritize operating our system reliably and will continue to do so over the fall and winter. We will keep customers informed as we progress through testing of the system. We know you count on us, and we take that responsibility seriously.”
The Lower Churchill Project is a set of hydroelectric generation and transmission projects that includes the Muskrat Falls Generating Station on the Churchill River in Labrador (completed in late 2021), the Labrador Transmission Assets, the Labrador–Island Link that connects to the island of Newfoundland, and the Maritime Link that connects to Nova Scotia.