In the far northern reaches of Atlantic Canada, energy companies seek to harness untapped river sites with a hydroelectric project that could replace fossil fuel plants and export power into New England.
Utility company Nalcor Energy aims to build two hydroelectric sites along the Lower Churchill River in Labrador, downstream from an existing 5,428-megawatt station -- one of the largest in the world.
The proposed Muskrat Falls and Gull Island projects would have a combined capacity of more than 3,000 MW, produce 16.7 terawatt-hours of electricity per year and offset millions of tonnes of greenhouse gas emissions, says the company.
"It translates into displacing 16 megatonnes of carbon dioxide annually from thermal, coal and fossil fuel generation," said Nalcor spokeswoman Karen O'Neill. "That's equivalent to offsetting the greenhouse gas emissions from 3.2 million automobiles annually."
Nalcor is currently waiting for government approval before it can begin phase one of the Lower Churchill Project -- the 824-MW facility at Muskrat Falls, with high-voltage direct-current transmission links to Newfoundland and Nova Scotia. The much larger and potentially more environmentally damaging Gull Island project is currently on hold. Late last month, the Canadian federal government announced it would back a $6.2 billion loan to develop the Muskrat project.
"The loan guarantee isn't requiring Canada to directly fund the project; we're using their borrowing capability to improve the economics of the project," said Gilbert Bennett, vice president of the Lower Churchill Project. "In doing [this], Canada is supporting a major infrastructure project that will reduce greenhouse gas emissions and will ultimately reduce electricity costs in Atlantic Canada."
Muskrat Falls alone would displace 2 megatonnes of greenhouse gases per year from the oil-powered Holyrood thermal plant in Newfoundland, said Bennett. It would also displace 1 megatonne of emissions from a coal-fired plant in Nova Scotia.
Another benefit is that the project would create as many as 2,700 jobs during the construction phase. That amounts to 8,600 person-years of direct employment in Newfoundland and Labrador. The socioeconomic and clean energy benefits make the Lower Churchill Project very attractive, particularly to energy-hungry American states. But the Canadian Parliament must still review an independent environmental assessment and pass Nalcor's proposal before construction can begin.
Supplying U.S. peak summer demands
Last November, Naclor joined forces with Emera Inc. to get the Muskrat Falls project under way. Nalcor would have 100 percent ownership of the generating facility and would control a majority of the Island Transmission Link from Labrador to the island of Newfoundland. Emera would be primarily responsible for the Maritime Transmission Link to Nova Scotia, which will be the first-ever interconnected maritime system.
According to their agreement, Nalcor would take 40 percent of the hydroelectric output and Emera would take 20 percent to power their respective provinces. That leaves 40 percent of Muskrat Falls' energy capacity for export, and almost all of the 2,264 MW from the Gull Island site, should it be developed.
Govs. Peter Shumlin (D) of Vermont and Lincoln Chafee (I) of Rhode Island visited the Lower Churchill Project site in August to start forging business relationships. The trip was proposed in July during the annual Conference of New England Governors and Eastern Canadian Premiers in Halifax, Nova Scotia.
"From our perspective, we think there are a number of good reasons why Canadian hydro is a good answer for U.S. needs," said Bennett. "We're competitively priced, we have a renewable product and we integrate well with other renewables."
He added that the U.S. and Canadian systems are complementary. The United States' peak electricity demands are in summer, when customers need electricity to power their air conditioners, while Canada's peak demands are in winter -- Canada uses electricity for heating, whereas the United States has access to natural gas.