Nalcor Operations  >  Lower Churchill Project

Lower Churchill Project

The hydroelectric potential of Muskrat Falls and Gull Island make the lower Churchill River in Labrador the best undeveloped hydroelectric source in North America. Together, they have a combined capacity of more than 3,000 megawatts, will be able to provide 16.7 terawatt hours of electricity a year and reduce greenhouse gas emissions equivalent to taking 3.2 million vehicles off the road each year.

The Lower Churchill Project will be developed in two phases: first, Muskrat Falls and then Gull Island.

Muskrat Falls
Phase 1 - Muskrat Falls		 Gull Island
Phase 2 - Gull Island

Muskrat Falls
The Muskrat Falls development includes three key components:
• 824 megawatt hydroelectric generating facility at Muskrat Falls on the lower Churchill River;
• 1,100 km High Voltage direct current transmission line from Muskrat Falls to Soldiers Pond on the island of Newfoundland;
• 480 km High Voltage direct current Maritime transmission link (planned, financed and constructed by Nova Scotia’s Emera Inc.)

Power from Muskrat Falls will meet the island’s future energy requirements, while also providing sufficient capacity for future industrial developments in Newfoundland and Labrador. More specifically:
• 40% will be used to displace the Holyrood Thermal Generating Station on the island
• 20% will go to Nova Scotia in return for Emera Inc. building the $1.2 billion Maritime Link (Nalcor will have access to 70% of link’s capacity at no cost)
• 40% will be used as needed - either domestically or for export. It’s expected this power will be needed in NL by 2037-2040.

The development of Muskrat Falls will provide four key benefits:

1. Least-cost power for island electricity system
2. Stable electricity rates
3. Long-term benefits and revenue for the province
4. Support for industrial development

Nalcor has completed a significant amount of work to mitigate financial risks. Hydroelectric projects are well understood and Nalcor has completed detailed field and engineering work to support the estimates for the project. All alternatives are subject to cost pressures and risks and Nalcor is taking a best practice approach to managing the project and project risk.

In addition to Muskrat Falls being the least-cost way to meet increasing demand for power, the timing for the Muskrat Falls Project is ideal. Interest rates are low and the federal government has agreed to a loan guarantee. As well, an agreement is in place with the Labrador Innu and a water management agreement has been signed with Churchill Falls (Labrador) Corporation.


Gull Island
Phase Two of the Lower Churchill Project will consist of the development of the 2,250 megawatt Gull Island generation facility and associated transmission to markets. The development of Gull Island will begin at least three years after Muskrat Falls and is expected to take about eight years.

Gull Island will focus primarily on export and potential for industrial growth in Labrador.





 

Nalcor and its subsidiary Newfoundland and Labrador Hydro (Hydro), have a responsibility to meet increasing power needs by recommending the lowest-cost generating supply option.

To meet the growing demand for energy on the island, Nalcor considered a broad portfolio of supply options. Two optimized generation scenarios emerged: 1) Isolated Island (upgrades to the current system) and 2) Interconnected Island (Muskrat Falls). Muskrat Falls, with a transmission link from Labrador to the island is the least-cost alternative over remaining isolated by a preference of $2.2 billion (2010$).

The province is presently dependent on oil and global oil markets for electricity generation at the Holyrood plant. Oil prices are far from stable and over the next few years, electricity rates on the island are expected to increase. By investing in hydropower, Hydro will secure stable electricity rates for consumers in the short and long term.

When Muskrat Falls power is brought to the island, rates for consumers will stabilize with minimal increases of less than one per cent per year into the future.

When Muskrat Falls is operational, expected in 2017, 40 per cent of the power will be needed for the island and 40 per cent will be available to support future industrial growth in Newfoundland and Labrador. The remaining 20 per cent will go to Nova Scotia's Emera Inc. for 35 years in exchange for their $1.2 billion investment in the Maritime Link. During that 35-year period, Nalcor will have access to about 70 per cent of the link's capacity - at no cost. Nalcor can use the link to transmit any Muskrat Falls power not needed in the province, as well as energy from any new generation sources in the province. The project will also provide significant employment and economic benefits throughout Newfoundland and Labrador. At peak, it will employ 2,700 people, and deliver $1.4 billion in labour and employment income and $212 million in taxes to the province.

Muskrat Falls is being built to meet the island's electricity needs. We'll use 40 per cent of the power on the island immediately and 20 per cent will go to Emera Inc. for use in Nova Scotia for 35 years in exchange for their $1.2 billion investment in the Maritime Link. We'll export the remaining 40 per cent into Atlantic Canadian and New England markets with the ability to recall it for our own provincial use at any time. This power can be used to support future industrial growth in this province. NL currently has very competitive industrial rates and they will continue to be strong as a result of our stable electricity base.