Cape Wind project to start this fall

Nalcor Energy Pandemic Loss underscores Muskrat Falls delays, hydroelectric risks, oil price shocks, and COVID-19 impacts, affecting ratepayers, provincial debt, timelines, and software commissioning for the Churchill River project and Atlantic Canada subsea transmission.

Key Points

A $171M Q1 2020 downturn linked to COVID-19, oil price collapse, and Muskrat Falls delays impacting schedules and costs.

✅ Q1 2020 profit swing: +$92M to -$171M amid oil price crash

✅ Muskrat Falls timeline slips; cost may reach $13.1B

✅ Software, workforce, COVID-19 constraints slow commissioning

Newfoundland and Labrador's Crown energy corporation reported a pandemic-related profit loss from the first quarter of 2020 on Tuesday, along with further complications to the beleaguered Muskrat Falls hydroelectric project.

Nalcor Energy recorded a profit loss of $171 million in the first quarter of 2020, down from a $92 million profit in the same period last year, due in part to falling oil prices during the COVID-19 pandemic.

The company released its financial statements for 2019 and the first quarter of 2020 on Tuesday, and officials discussed the numbers in a livestreamed presentation that detailed the impact of the global health crisis on the company's operations.

The loss in the first quarter was caused by lower profits from electricity sales and a drop in oil prices due to the pandemic and other global events, company officials said.

The novel coronavirus also added to the troubles plaguing the Muskrat Falls hydroelectric dam on Labrador's Churchill River, amid Quebec-N.L. energy tensions that long predate the pandemic.

Work at the remote site stopped in March over concerns about spreading the virus. Operations have been resuming slowly, with a reduced workforce tackling the remaining jobs.

Officials with Nalcor said it will likely be another year before the megaproject is complete.

CEO Stan Marshall estimates the months of delays could bring the total cost to $13.1 billion including financing, up from the previous estimate of $12.7 billion -- though the total impact of the coronavirus on the project's price tag has yet to be determined.

"If we're going to shut down again, all of that's wrong," Marshall said. "But otherwise, we can just carry on and we'll have a good idea of the productivity level. I'm hoping that by September we'll have a more definitive number here."

The 824 megawatt hydroelectric dam will eventually send power to Newfoundland, and later Nova Scotia, through subsea cables, even as Nova Scotia boosts wind and solar in its energy mix.

It has seen costs essentially double since it was approved in 2012, and faced significant delays even before pandemic-forced shutdowns in North America and around the world this spring.

Cost and schedule overruns were the subject of a sweeping inquiry that held hearings last year, while broader generation choices like biomass use have drawn scrutiny as well.

The commissioner's report faulted previous governments for failing to protect residents by proceeding with the project no matter what, and for placing trust in Nalcor executives who "frequently" concealed information about schedule, cost and related risks.

Some of the latest delays have come from challenges with the development of software required to run the transmission link between Labrador and Newfoundland, where winter reliability issues have been flagged in reports.

The software is still being worked out, Marshall said Tuesday, and the four units at the dam will come online gradually over the next year.

"It's not an all or nothing thing," Marshall said of the final work stages.
Nalcor's financial snapshot follows a bleak fiscal update from the province this month. The Liberal government reported a net debt of $14.2 billion and a deficit of more than $1.1 billion, even as a recent Churchill Falls deal promised new revenues for the province, citing challenges from pandemic-related closures and oil production shutdowns.

Finance Minister Tom Osborne said at the time that help from Ottawa will be necessary to get the province's finances back on track.

Muskrat Falls represents about one-third of the province's debt, and is set to produce more power than the province of about half a million people requires. Anticipated rate increases due to the ballooning costs and questions about Muskrat Falls benefits have posed a significant political challenge for the provincial government.

Ottawa has agreed to work with Newfoundland and Labrador on a rewrite of the project's financial structure, scrapping the format agreed upon in past federal-provincial loan agreements in order to ease the burden on ratepayers, while some argue independent planning would better safeguard ratepayers.

Marshall, a former Fortis CEO who was brought in to lead Nalcor in 2016, has called the project a "boondoggle" and committed to seeing it completed within four years. Though that plan has been disrupted by the pandemic, Marshall said the end is in sight.

"I'm looking forward to a year from now. And I hope to be gone," Marshall said.

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Germany Energy Price Hikes are driving electricity tariffs, gas prices, and heating costs higher as wholesale markets surge after the Ukraine invasion; households face inflationary pressure despite relief measures and a renewables levy cut.

Key Points

Germany Energy Price Hikes reflect surging power and gas tariffs from wholesale spikes, prompting relief measures.

✅ Electricity tariffs to rise 19.5% in Apr-Jun

✅ Gas tariffs up 42.3%; heating and fuel costs soar

✅ Renewables levy ends July; saves €6.6 billion yearly

Record prices for electricity and gas in Germany will continue to rise in the coming months, the dpa agency, citing estimates from the consumer portal Verivox.

According to him, electricity suppliers and local utilities, in whose area of ​​responsibility there are 13 million households, made an announcement of tariff increases in April, May and June by 19.5%. Gas tariffs increased by an average of 42.3%.

According to Verivox, electricity prices in Germany have approximately doubled over the year - a pattern seen as European electricity prices rose more than double the EU average - if previously a household with a consumption of 4,000 kWh paid 1,171 euros a year, now the amount has risen to 1,737 euros. Gas prices have risen even more, though European gas prices later returned to pre-Ukraine war levels: last year, a household with a consumption of 20,000 kWh paid 1,184 euros in annual terms, and now it is 2,787 euros. 

Energy costs for the average German household are 52 percent higher than a year ago, adding to EU inflation pressures, according to energy contract sales website Check24. In a press release, the company said the wholesale electricity price was at €122.93 per megawatt-hour in February 2022, compared to €49 this time last year, while in the United States US electricity prices climbed at the fastest pace in 41 years. In addition, electricity prices on the power exchange haven been rising rapidly since Russian troops invaded Ukraine, comparison portal Strom Report said. Costs for heating rose the most, triggered by the high gas price (105 euros per megawatt-hour on the wholesale market) and around 100 USD per barrel of oil – its highest price since 2014. Driving also became more expensive with costs for petrol up 25 percent and diesel 30 percent, Check24 said.

The German government has decided on relief measures for low-income households, including a 200 billion euro energy shield, in response to high consumer energy costs. In July, it will abolish the renewables levy on the power price, saving consumers around €6.6 billion annually. In a reform proposal released this week, the ministry for economy and climate also detailed how it will legally oblige power suppliers to reduce their power bills when the levy is abolished.

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Skinners Pond Transmission Line expands PEI's renewable energy grid, enabling wind power integration, grid reliability, and capacity for the planned 40 MW windfarm, funded through the Green Infrastructure Stream to support sustainable economic growth.

Key Points

A 106-km grid project enabling PEI wind power, increasing capacity and reliability, linking Skinners Pond to Sherbrooke.

✅ 106-km line connects Skinners Pond to Sherbrooke substation

✅ Integrates 40 MW windfarm capacity by 2025

✅ Funded by Canada and PEI via Green Infrastructure Stream

The health and well-being of Canadians are the top priorities of the Governments of Canada and Prince Edward Island. But the COVID-19 pandemic has affected more than Canadians' personal health. It is having a profound effect on the economy.

That is why governments have been taking decisive action together to support families, businesses and communities, and continue to look ahead to planning for our electricity future and see what more can be done.

Today, Bobby Morrissey, Member of Parliament for Egmont, on behalf of the Honourable Catherine McKenna, Minister of Infrastructure and Communities, the Honourable Dennis King, Premier of Prince Edward Island, the Honourable Dennis King, Premier of Prince Edward Island, and the Honourable Steven Myers, Prince Edward Island Minister of Transportation, Infrastructure and Energy, announced funding to build a new transmission line from Sherbrooke to Skinners Pond, as part of broader Canadian collaboration on clean energy, with several premiers nuclear reactor technology to support future needs as well.

The new 106-kilometre transmission line and its related equipment will support future wind energy generation projects in western Prince Edward Island, complementing the Eastern Kings wind farm expansion already advancing. Once completed, the transmission line will increase the province's capacity to manage the anticipated 40 megawatts from the future Skinner's Pond Windfarm planned for 2025 and provide connectivity to the Sherbrooke substation to the northeast of Summerside.

The Government of Canada is investing $21.25 million and the Government of Prince Edward Island is providing $22.75 million in this project, reflecting broader investments in new turbines across Canada, through the Green Infrastructure Stream (GIS) of the Investing in Canada infrastructure program.

This projects is one in a series of important project announcements that will be made across the province over the coming weeks. The Governments of Canada and Prince Edward Island are working cooperatively to support jobs, improve communities and build confidence, while safely and sustainably restoring economic growth, as Nova Scotia increases wind and solar projects across the region.

"Investing in renewable energy infrastructure is essential to building healthy, inclusive, and resilient communities. The new Skinners Pond transmission line will support Prince Edward Island's production of green energy, focusing on wind resources rather than expanded biomass use in the mix. Projects like this also support economic growth and help us build a greener future for the next generation of Islanders."

Bobby Morrissey, Member of Parliament for Egmont, on behalf of the Honourable Catherine McKenna, Minister of Infrastructure and Communities

"We live on an Island that has tremendous potential in further developing renewable energy. We have an opportunity to become more sustainable and be innovative in our approach, and learn from regions where provinces like Manitoba have clean energy to help neighbouring provinces through interties. The strategic investment we are making today in the Skinner's Pond transmission line will allow Prince Edward Island to further harness the natural power of wind to create clean, locally produced and locally used energy that will benefit of all Islanders."

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British Columbia Bomb Cyclone disrupts coastal travel with severe wind gusts, heavy rainfall, widespread power outages, ferry cancellations, flooding, and landslides across Vancouver Island, straining emergency services and transport networks during the early holiday season.

Key Points

A rapidly intensifying storm hitting B.C.'s coast, causing damaging winds, heavy rain, power outages, and ferry delays.

✅ Wind gusts over 100 km/h and well above normal rainfall

✅ Power outages, flooded roads, and downed trees across the coast

✅ Ferry cancellations isolating communities and delaying supplies

A powerful storm, dubbed a "bomb cyclone," recently struck the British Columbia coast, wreaking havoc across the region. This intense weather system led to widespread disruptions, including power outages affecting tens of thousands of residents and the cancellation of ferry services, crucial for travel between coastal communities. The bomb cyclone is characterized by a rapid drop in pressure, resulting in extremely strong winds and heavy rainfall. These conditions caused significant damage, particularly along the coast and on Vancouver Island, where flooding and landslides led to fallen trees blocking roads, further complicating recovery efforts.

The storm's ferocity was especially felt in coastal areas, where wind gusts reached over 100 km/h, and rainfall totals were well above normal. The Vancouver region, already susceptible to storms during the winter months, faced dangerous conditions as power lines were downed, and transportation networks struggled to stay operational. Emergency services were stretched thin, responding to multiple weather-related incidents, including fallen trees, damaged infrastructure, and local flooding.

The ferry cancellations further isolated communities, especially those dependent on these services for essential supplies and travel. With many ferry routes out of service, residents had to rely on alternative transportation methods, which were often limited. The storm's timing, close to the start of the holiday season, also created additional challenges for those trying to make travel arrangements for family visits and other festive activities.

As cleanup efforts got underway, authorities warned that recovery would take time, particularly due to the volume of downed trees and debris. Crews worked to restore power and clear roads, while local governments urged people to stay indoors and avoid unnecessary travel, and BC Hydro's winter payment plan provided billing relief during outages. For those without power, the storm brought cold temperatures, and record electricity demand in 2021 showed how cold snaps strain the grid, making it crucial for families to find warmth and supplies.

In the aftermath of the bomb cyclone, experts highlighted the increasing frequency of such extreme weather events, driven in part by climate change and prolonged drought across the province. With the potential for more intense storms in the future, the region must be better prepared for these rapid weather shifts. Authorities are now focused on bolstering infrastructure to withstand such events, as all-time high demand has strained the grid recently, and improving early warning systems to give communities more time to prepare.

In the coming weeks, as British Columbia continues to recover, lessons learned from this storm will inform future responses to similar weather systems. For now, residents are advised to remain vigilant and prepared for any additional weather challenges, with recent blizzard and extreme cold in Alberta illustrating how conditions can deteriorate quickly.

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Hydro One investment risk reflects Ontario government influence, board shakeup, Avista acquisition uncertainty, regulatory hearings, dividend growth prospects, and utility M&A moves in Peterborough, with stock volatility since the 2015 IPO.

Key Points

Hydro One investment risk stems from political control, governance turnover, regulatory outcomes, and uncertain M&A.

✅ Ontario retains near-50% stake, affecting autonomy and policy risk

✅ Board overhaul and CEO exit create governance uncertainty

✅ Avista deal, OEB hearings, local utility M&A drive outcomes

Hydro One may be only half-owned by the province on Ontario but that’s enough to cause uncertainty about the company’s future, thus making for an investment risk, says Douglas Kee of Leon Frazer & Associates.

Since its IPO in November of 2015, Hydro One has seen its share of ups and downs, including a Q2 profit decline earlier this year, mostly downs at this point. Currently trading at $19.87, the stock has lost 11 per cent of its value in 2018 and 12 per cent over the last 12 months, despite a one-time gain boosting Q2 profit that followed a court ruling.

This year has been a turbulent one, to say the least, as newly elected Ontario premier Doug Ford made good this summer on his campaign promise re Hydro One by forcing the resignation of the company’s 14-person board of directors along with the retirement of its chief executive, an event that saw Hydro One shares fall amid the turmoil. An interim CEO has been found and a new 10-person board and chairman put in place, but Kee says it’s unclear what impact the shakeup will ultimately have, other than delaying a promising-looking deal to purchase US utility Avista Corp, with the companies moving to ask the U.S. regulator to reconsider the order.

Douglas Kee’s take on Hydro One stock

“We looked at Hydro One a couple of times two years ago and just decided that with the Ontario government’s still owning a big chunk of the company … there are other public companies where you get the same kind of yield, the same kind of dividend growth, so we just avoided it,” says Kee, managing director and chief investment officer with Leon Frazer & Associates, to BNN Bloomberg.

“The old board versus the new board, I’m not sure that there’s much of an improvement. It was politics more than anything,” he says. “The unfortunate part is that the acquisition they were making in the United States is kind of on hold for now. The regulatory procedures have gone ahead but they are worried, and I guess the new board has to make a decision whether to go ahead with it or not.”

“Their transmissions side is coming up for regulatory hearings next year, which could be difficult in Ontario,” says Kee. “The offset to that is that there are a lot of municipal distributions systems in Ontario that may be sold — they bought one in Peterborough recently, which was a good deal for them. There may be more of that coming too.”

Last month, Hydro One reached an agreement with the City of Peterborough to buy its Peterborough Distribution utility which serves about 37,000 customers for $105 million. Another deal to purchase Orillia Power Distribution Corp for $41 million has been cancelled after an appeal to the Ontario Energy Board was denied in late August. Hydro One’s sought-after Avista Corp acquisition is reported to be worth $7 billion.

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California Wildfire Smoke Impact on Solar reduces photovoltaic output, as particulate pollution, soot, and haze dim sunlight and foul panels, cutting utility-scale generation and grid reliability across CAISO during peak demand and heatwaves.

Key Points

How smoke and soot cut solar irradiance and foul panels, slashing PV generation and straining CAISO grid operations.

✅ Smoke blocks sunlight; soot deposition reduces panel efficiency.

✅ CAISO reported ~30% drop versus July during peak smoke.

✅ Longer fire seasons threaten solar reliability and capacity planning.

Smoke from California’s unprecedented wildfires was so bad that it cut a significant chunk of solar power production in the state, even as U.S. solar generation rose in 2022 nationwide. Solar power generation dropped off by nearly a third in early September as wildfires darkened the skies with smoke, according to the US Energy Information Administration.

Those fires create thick smoke, laden with particles that block sunlight both when they’re in the air and when they settle onto solar panels. In the first two weeks of September, soot and smoke caused solar-powered electricity generation to fall 30 percent compared to the July average, according to the California Independent System Operator (CAISO), which oversees nearly all utility-scale solar energy in California, where wind and solar curtailments have been rising amid grid constraints. It was a 13.4 percent decrease from the same period last year, even though solar capacity in the state has grown about 5 percent since September 2019.

California depends on solar installations for nearly 20 percent of its electricity generation, and has more solar capacity than the next five US states trailing it combined as it works to manage its solar boom sustainably. It will need even more renewable power to meet its goal of 100 percent clean electricity generation by 2045, building on a recent near-100% renewable milestone that underscored the transition. The state’s emphasis on solar power is part of its long-term efforts to avoid more devastating effects of climate change. But in the short term, California’s renewables are already grappling with rising temperatures.

Two records were smashed early this September that contributed to the loss of solar power. California surpassed 2 million acres burned in a single fire season for the first time (1.7 million more acres have burned since then). And on September 15th, small particle pollution reached the highest levels recorded since 2000, according to the California Air Resources Board. Winds that stoked the flames also drove pollution from the largest fires in Northern California to Southern California, where there are more solar farms.

Smaller residential and commercial solar systems were affected, too, and solar panels during grid blackouts typically shut off for safety, although smoke was the primary issue here. “A lot of my systems were producing zero power,” Steve Pariani, founder of the solar installation company Solar Pro Energy Systems, told the San Mateo Daily Journal in September.

As the planet heats up, California’s fire seasons have grown longer, and blazes are tearing through more land than ever before, while grid operators are also seeing rising curtailments as they integrate more renewables. For both utilities and smaller solar efforts, wildfire smoke will continue to darken solar energy’s otherwise bright future, even as it becomes the No. 3 renewable source in the U.S. by generation.

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