Keeping Holyrood power plant open beyond 2030 would cost hundreds of millions
Oil-burning generating station was supposed to close years ago, but Muskrat Falls reliability still a concern
Keeping the aging Holyrood Thermal Generating Station open just five years beyond its potential 2030 retirement date would cost Newfoundland and Labrador Hydro more than $700 million.
That estimate includes operating and capital costs at the 490-megawatt facility from 2031 to 2035, as predicted in a new 46-page report from independent consultants Hatch. It also takes into account fuel cost estimates from N.L. Hydro for the same period.
The Holyrood plant, a peaking facility opened in 1970 that helps meet demand on the Avalon peninsula during the colder months, was supposed to close after the Muskrat Falls hydroelectric project came online.
But concerns remain as to the reliability of the 1,100-kilometre Labrador-Island Link transmission system linking the 824-megawatt dam to eastern Newfoundland.
For years, N.L. Hydro has repeatedly said Holyrood will 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 statement on Monday, the Crown utility's spokesperson Jill Pitcher said "it is important we understand any potential impacts if Holyrood, in some capacity, was required post 2030 to ensure continued reliable delivery of electricity, at the least possible cost to our customers."
Signals plant could remain online after 2030
While Holyrood's future after 2030 remains uncertain, a presentation submitted to the Public Utilities Board (PUB) in May 2023 indicated "Any new supply is seven to 10 years away from time of approval."
So far, N.L. Hydro hasn't submitted a formal application to the PUB to build new generation assets, but it is promising to file a proposal this month seeking the board's approval to build a new 150-megawatt combustion turbine in Holyrood and a new 150-megawatt generating unit at the existing Bay d'Espoir hydroelectric dam in southern Newfoundland.
Officials at N.L. Hydro said last July that the two projects and their associated transmission assets would cost between $1.2 and $1.6 billion. N.L. Hydro is also proposing 400 megawatts of wind generation be developed by the private sector.
Costs between now and end of decade also balloon
The Hatch report, requested by the PUB and dated March 4, is a "refresh" to a 2022 analysis, also produced by the company, that looked at operating, capital and fuels costs at Holyrood from 2022 to 2030.
"Capital costs for 2025–2030, inclusive, have increased by approximately $44 million compared to those presented in the 2022 report", reads the latest report. "The additional costs are attributed to the increase in the costs of equipment and services due to inflation since 2021 and include additional recommended projects based on findings from recent inspections."
The heavy oil needed to run the plant between now and 2030 will also cost almost three times what Hatch expected in 2022, according to internal projections from N.L. Hydro. The Crown corporation expects to pay about $440 million for fuel over the period, according to a March 7 letter to the PUB.
Province's 2nd largest industrial polluter
Keeping Holyrood online for longer than expected also means continuing to burn heavy fuel at the facility.
While production has decreased at Holyrood in recent years, as the Labrador-Island Link came online and its performance improved, the plant was still the province's second biggest industrial polluter in 2023, producing 600,000 tonnes of greenhouse gas emissions.
Holyrood's yearly pollution amounts to about 130,000 times the annual emissions of the average vehicle, according to Natural Resources Canada.
Pitcher stressed on Monday that "contingency planning is a prudent and essential utility practice, particularly during this time of global uncertainty."
"Hydro has kept Holyrood in service to ensure reliable operation for customers," she wrote. "Since commissioning of the Labrador-Island Link, Hydro has reduced operation at Holyrood, keeping two of its three units in service during the winter season. We will continue to thoughtfully manage our system to minimize the use of Holyrood until new sources of supply have been integrated into our system."
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