Nalcor Energy Releases Business and Financial Report for 2020 and First Quarter Financial Results for 2021

June 10th, 2021

Today, Nalcor Energy released our annual Business and Financial Report, including the Annual Audited Consolidated Financial Statements for the year ended December 31, 2020. Also released, our Unaudited Condensed Consolidated Interim Financial Statements and financial results for the first quarter of 2021.

“In April 2016, I joined Nalcor Energy for an expected four-year term. I was very fortunate to have the support of Nalcor’s qualified and dedicated employees. With their assistance, and with the full support of the Board of Directors, we have overcome many challenges,” said Stan Marshall, Nalcor President and CEO. “2020 brought “snowmageddon” and the COVID-19 pandemic, yet we successfully implemented protocols to ensure the safe return to all of our facilities. We also celebrated milestones and accomplishments across the organization, all made possible by the continued hard work and dedication of our employees and project teams. After more than five years at the company, my tenure is coming to an end, and I thank everyone for their hard work and support.”

2020 Financial Highlights:
• Nalcor recorded a loss for the year ended December 31, 2020 of $90 million compared to a profit of $126 million in 2019, a decrease of $216 million. The key drivers of the decrease were include the non-cash impairment of oil and gas assets of $225 million recorded in Q1 2020, lower realized oil prices, higher depletion in Oil and Gas and a full year of interest costs for LCP transmission. These decreases were partially offset by higher oil production volumes, lower royalties, as well as no exploration or evaluation expense for 2020.
• The non-cash impairment of White Rose and Hibernia South Extension assets (HSE) in Oil and Gas recorded in the first quarter of 2020 is a result of the significant decrease in oil price due to global events that caused increased supply and decreased demand amid the current COVID-19 pandemic. The oil and gas industry as a whole was dealing with a decline in global oil prices and the recognition of an impairment charge in 2020 is consistent with other industry participants. Oil and Gas assets continue to generate significant cash flows for the Province through oil sales and royalty payments.
• Capital expenditures for the year ended December 31, 2020 were $855 million compared to $1.2 billion in 2019. The primary driver of the decrease was lower capital incurred within LCP Transmission and Muskrat Falls as well as a reduction in capital spending across many lines of business due to the impacts of COVID-19.

2020 Business Accomplishments

While a reduced workforce and lost productivity resulted in impacts to project cost and schedule, Nalcor successfully achieved a number of milestones in 2020, most significant of which was the first power generation at Muskrat Falls and delivery of that power over the Labrador-Island Link (LIL) to customers on the island.
Hydro teams began 2020 by preparing for and responding to “Snowmageddon,” the largest winter storm in recent history. Our teams worked relentlessly to ensure the continued, reliable delivery of power to customers across the island.

Hydro, in partnership with the provincial and federal governments, announced the province’s first fast-charging network for electric vehicles. The network includes 14 charging stations from St. John’s to Port aux Basques – the first of which came online in Holyrood at the end of 2020.

2020 also marked the fiftieth anniversary of the commissioning of the Holyrood Thermal Generation Station, one of the first major pieces of infrastructure built to power our province.

Nalcor Energy Marketing (NEM) delivered 95 per cent of available Recapture energy from the Churchill Falls Generating Station to market, providing 1.264 terawatt hours of energy to customers in New York, New England, Ontario and the Maritimes, realizing revenues of $29 million.

In December 2020, our energy marketing team exported Muskrat Falls energy over the Maritime Link between the island and Nova Scotia with power flowing to Atlantic Canada and beyond.

In January 2020, our existing equity interests in offshore developments became managed by the newly formed Oil and Gas Corporation of Newfoundland and Labrador (Oil and Gas Corp) under a management services agreement. At that time, Nalcor Oil and Gas employees moved to Oil and Gas Corp, and all intellectual property and contracts associated with offshore exploration (not related to existing assets) were transferred to the new Crown Corporation. Nalcor will no longer undertake new offshore oil and gas developments.

Thanks to the dedication of our employees, in 2020, we were awarded the CEA President’s Award for Employee Safety and the CEA Sustainability Award for our Migratory Bird Program.

First Quarter Financial Highlights for 2021:
• Nalcor recorded a loss for the three months ended March 31, 2021 of $57 million compared to a loss of $171 million for the same period in 2020. The key drivers of the reduction in loss for the quarter relate to the impairment of oil and gas assets taken in 2020 as a result of a significant decrease in oil prices along with lower depletion in 2021. These reductions were partially offset by the impact associated with the reduction of working interest in HSE and lower oil sales volumes.
• On March 1, 2021, as a result of a recalculation of working interest in accordance with the HSE Operating Agreement, Oil and Gas’ interest in the HSE field reduced from 10 per cent to 8.7 per cent which had a significant impact on the profit of Oil and Gas in the first quarter of 2021.
• Capital expenditures for the three months ended March 31, 2021 were $166 million, which were comparable to $172 million in 2020.

Other Recent Developments

Commissioning work on the Muskrat Falls generating facility is ongoing. In mid-May 2021, Muskrat Falls unit 2 was successfully synced to the electricity grid; the third and fourth units are expected to come online in the coming months.

On the LIL, interim bipole trial operations started in mid-March and were completed on May 1 with LIL transferring a peak power flow of 225 megawatts from Muskrat Falls to the island. The LIL contractor, GE Grid, is focused on completing the final bipole software and, once received, testing will continue through the summer and fall before being turned over to operations, which is expected later this year.

In January, Hydro received regulatory approval of its 2021 Capital Budget Application. The focus remains on ensuring the right balance between investment and cost is achieved; carefully testing what is required for the provision of safe, reliable electricity. This year’s capital budget contains approximately 75 projects.

The Labrador Network Additions Policy was approved in March by the Board of Commissioners for Public Utilities (PUB). The policy guides how costs are allocated when new requests for larger quantities of power on the Labrador Interconnected System require substantial transmission infrastructure builds or upgrades.

Significant progress has been made on Hydro’s Electric Vehicle fast charging network with 11 of the 14 phase 1 sites now fully active.

In March, Hydro was selected by the Women in Resource Development Council for the 2021 Equity, Diversity and Inclusion Award for Diversity in Industry recognizing Hydro for its leadership in the adoption and implementation of emerging practices for diversity, gender equity and inclusion.

In April 2021, NEM entered into a temporary energy exchange agreement with Government of Newfoundland and Labrador for Muskrat Falls commissioning period energy that is surplus to NL Hydro’s requirements during LIL and Muskrat Falls commissioning. Through this agreement, NEM has delivered approximately 32 GWh of energy from Muskrat Falls to Corner Brook Pulp and Paper Limited.

NEM has delivered approximately 52 GWh of energy from Muskrat Falls to customers in the Maritimes and New England via the Maritime Link.

We continue to monitor provincial updates and make adjustments to our corporate protocols as needed based on public health guidance.

Nalcor’s 2020 and Q1 2021 Business and Financial Reports are available online:


Media Contact:
Deanne Fisher, Director, Corporate Affairs and Stakeholder Engagement
t: 709.733-5299 I c: 709.697-3418 I e: