N.L. Hydro mulls building new diesel

Newfoundland and Labrador Hydro is considering building a new diesel-powered combustion turbine on the Avalon Peninsula, as the Crown corporation prepares for an expected surge in electricity demand.

According to documents submitted to the province's Public Utilities Board (PUB), the new power plant could produce nearly as much electricity as the 490-megawatt Holyrood Thermal Generating Station, a facility Hydro slated for closure in 2030.

"A study is ongoing… to analyze fuel requirements, site suitability, and provide updated cost estimates and schedule for three capacity options (150 MW, 300 MW and 450 MW)," reads a presentation deck from last May,

Hydro spokesperson Jill Pitcher said in an email "no decision has been made to move forward with an application to construct a combustion turbine at this time." Before construction could begin, Hydro would first have to submit a proposal to the PUB and Pitcher said such an application would happen in the final quarter of next year "at the earliest."

Project cost and location are unknown for the moment, as well as potential emissions. The slide deck states, however, that "a combustion turbine project would probably take seven years for approval, construction and commissioning," a tight timeline given Hydro's own projections foresee electricity demand outstripping supply by 2030.

While certain heavily polluting plants such as the Holyrood generating station operate exclusively as peaker plants — producing electricity only when demand spikes in the colder months — Hydro hasn't closed the door on operating the potential new combustion turbine year round.

"We are exploring many options to ensure we choose the best path forward. It is prudent to do so," wrote Pitcher.

For years, the provincial government and Hydro have trumpeted that once the Holyrood generating station is decommissioned, about 98 per cent of the province's public electricity supply will come from renewable sources. Building a new combustion turbine could throw that prediction, as well as the province's 2050 net-zero emissions commitments, into doubt.

Closing the province's largest diesel generating plant was also a major argument in favour of constructing the now-infamous Muskrat Falls hydroelectric dam, when the then-Progressive Conservative government proposed the project more than a decade a ago.

Spokesperson Marium Oishee said Monday provincial environment minister Bernard Davis wasn't available this week to discuss the impact of a new diesel plant on the government's climate plan. Oishee would not say whether Davis supported building a new fossil fuel-burning power plant.

Should Hydro decide to build a new combustion turbine, it will also have to follow a new set of stringent rules recently announced by the federal government. The draft Clean Electricity Regulation, announced Aug. 10, would severely restrict greenhouse gas emissions from electricity plants built after 2025.

"You'd have to do the cost-benefit analysis in the sense that the plant could only operate for [a few] years, technically, without any new form of technology," said Julien Bourque, a senior policy analyst with the Canadian Climate Institute.

Bourque told Radio-Canada that Newfoundland's geology makes carbon sequestration more difficult than in Western Canada, adding, "the business case is not very strong."

"Do I see an easy path here? No, I don't," said Matthew Keen, a Vancouver-based energy regulatory lawyer. "I think the distinction here is you've got an isolated reliability need and you've got draft regulations that are supposed to cover the entire country. And doubtless, you've got engineers and lawyers who are trying to figure out how those two things are going to fit together."

Pitcher, the Hydro spokesperson, said the Crown corporation is currently evaluating the impact the federal regulations could have on a new combustion turbine project.

Pitcher said natural gas, a relatively less polluting combustible that still produces far more emissions than allowed by the new regulations, isn't an option for combustion turbines in Newfoundland and Labrador because there is no supply. Renewable fuels could be an option in the future, she said, but "any combustion turbine would need to be fuelled by diesel in the near term."

Hydro, like many electricity corporations in Canada, projects that electricity demand could more than double by 2050, largely driven by the increased popularity of electric vehicles and the transition away from oil home heating. Demand for electricity could outpace supply by 2030, according to Hydro's projections, with the PUB warning earlier this month that the Crown corporation should "accelerate" its current schedule for upping production.

Hydro is also planning to add an eighth 150 MW turbine at the Bay d'Espoir hydroelectric dam in southern Newfoundland.

Meanwhile, the reliability of the Muskrat Falls transmission system remains in question and at least one of its four generating units needs to be fully dismantled.

According to Pitcher, the Holyrood generating station is expected to remain open until 2030, "or until such time that sufficient alternative generation is commissioned, adequate performance of the Labrador Island Link is proven, and generation reserves are met."

In a letter earlier this month to the PUB, Hydro said it should receive the independent study on the potential new combustion turbine by the end of August. The report, prepared by Hatch, along with Hydro's own analysis, will be submitted to the PUB by Sept. 29.

Get the news you need without restrictions. Download our free CBC News app.

Patrick Butler is a Radio-Canada journalist based in St. John's. He previously worked for CBC News in Toronto and Montreal.

Add some “good” to your morning and evening.

A variety of newsletters you'll love, delivered straight to you.