ST. JOHN’S, N.L.—The cost of building the Muskrat Falls hydroelectric project has grown by almost 10 per cent to a total of $7.65 billion since June 2014.
Nalcor Energy also says the date for when power is first expected to be generated from the project in Labrador has been delayed until 2018.
Muskrat Falls was originally supposed to start generating electricity late in 2017 and it was previously forecast to cost $6.99 billion.
The provincial Crown corporation attributes the increased cost of construction to market pressures and changes to the project.
Now in its third full year of construction, Nalcor says Muskrat Falls has passed the halfway mark.
The $1.6-billion Maritime Link that is now under construction as part of the project by Emera (TSX:EMA) to bring power to Nova Scotia through a subsea cable was not part of an oversight report released Tuesday in Newfoundland and Labrador.
The 170-kilometre underwater link is scheduled to be in service in October 2017.
The report released by the government of Newfoundland and Labrador on Muskrat Falls says Nalcor believes the remaining cost risks for the project are lower.
“As the project has advanced and construction is well underway on all components, potential high-risk activities which impacted project costs have been achieved and the capital budget has been adjusted where required,” it says.
“All major contracts have been awarded or are through advanced evaluation which includes the majority of contract costs. The majority of materials have been ordered and costs are committed.”
It says risks for the project remain, however, and they include the weather, the performance of contractors and geotechnical conditions.
“The (oversight) committee notes that significant schedule pressures with respect to the Muskrat Falls Generating Facility remain,” the report says. “The performance of the civil contractor for the Muskrat Falls Generating Facility, while recently improved, remains an ongoing area of focus given the schedule slippage already incurred.”