Published on April 4th, 2013
The Lower Churchill Project – More Than a Renewable Power Source
The possibilities of hydroelectric power generation for the Lower Churchill River in Labrador have long been contemplated, and more recently debated. After moving out of the planning phase and receiving sanction in December of last year, the Lower Churchill Project developer, Nalcor Energy, is in the throes of constructing world-class hydro resources to power the province and Eastern Canada with jobs, opportunities, and a renewable resource.
The province of Newfoundland and Labrador is experiencing a growing economy, higher-than-average new home construction, growing electricity use in homes (including increased use of electric heat), and increased industrial demand, all requiring more power than in previous years. Forecasts prepared by Newfoundland and Labrador Hydro show that without a new source of power for the island by 2015, demand will begin to exceed firm supply.
The Lower Churchill Project is being developed to solve this impending problem with a two-phase development: the first at Muskrat Falls, and the second at Gull Island. These two projects within the larger project have the combined capacity of more than 3,000 megawatts, and will be able to provide 16.7 terawatt-hours of electricity per year, reducing greenhouse gas emissions to the equivalent of taking 3.2 million vehicles off the road each year.
In addition to these significant energy numbers, the project will contribute to the economic growth and opportunity explosion of Newfoundland and Labrador. “It’s another massive energy project in the province,” says the vice president of the Lower Churchill Project with Nalcor, Gilbert Bennett, explaining the person-hours required for the endeavor and the transition from oil and gas to wind and water. “These are big numbers with big economic benefits … It will provide a renewable, stable-priced, long-term, reliable energy source for the province.”
Gull Island Project Overview
The Muskrat Falls Project was sanctioned in 2012 and is expected to take five years to construct. This project includes the Muskrat Falls 824-megawatt hydroelectric facility consisting of two dams and a powerhouse. It will also include two transmission links: the proposed Labrador-Island link will be a 60-meter-wide 1,100-kilometer High Voltage direct current (HVdc) line from Muskrat Falls in Labrador to Soldiers Pond on the Avalon Peninsula in Newfoundland, and 250-kilometer HVac transmission lines between Muskrat Falls and Churchill Falls.
The project also includes the 35-kilometer Strait of Belle Isle marine cable crossing from Forteau Point, Labrador, to Shoal Cove, Newfoundland. A 480-kilometer Maritime link will transfer power from Newfoundland to Nova Scotia as well, which will be financed and constructed by Nova Scotia’s Emera Inc.
* Note: Although 40 percent of the energy created by Muskrat Falls is estimated to be surplus energy when taking into account the province’s current power needs, it is projected that the province will need 80 percent of the energy produced by this project by 2036 or earlier, as additional industrial and economic growth continues in the province. Rising oil prices and the ever-increasing demand for power mean that electricity rates are increasing. Between 2001 and 2011, electricity rates for the average ratepayer on the island increased by 32 percent.
Gull Island Project Overview
This second phase of the Lower Churchill Project will include the development of the 2,250-megawatt Gull Island generation facility and the associated transmission to energy markets. It will begin at least three years after the Muskrat Falls Project and is expected to take approximately eight years to complete. Gull Island will focus primarily on export and potential for industrial growth in Labrador and will provide no less than 13 million person-hours of labor.
Phase One Benefits
Diversifying the economy
$1.9 billion in income for labor and businesses, with approximately $500 million earned by Labradorians and Labrador-based businesses. The project will provide an average of $320 million in income benefits per year during phase one.
$290 million in tax revenue to the provincial government with the income produced by the project being spent locally on goods and services.
Energy for future mining and industrial development in the province with enough excess energy potential to meet the power needs of western Labrador.
Extra revenue for the province from the export sale of excess energy produced at Muskrat Falls.
An average of 1,500 jobs each year in more than 70 trades and occupations during the construction phase of the Muskrat Falls Project.
An average of 3,100 jobs at the peak of the project in 2015. After construction is complete, Newfoundland and Labrador employment will continue with an estimated 80 direct, full-time jobs during the life of the project—half of which will be in Labrador itself.
9,100 person-years of direct provincial employment with 5,800 of these person-years taking place in Labrador alone. The total direct, indirect, and induced employment for the province is estimated to be 23,300 person-years.
*Note: one person-year represents 2,000 hours of work per year—the equivalent of someone working 40 hours per week for 50 weeks.
Sidebar: Bennett stresses that every step has been taken to ensure local businesses can take advantage of contracts and employment benefits with the project. “The preference for hiring is local,” he says, adding that hiring will ramp up over the course of the year. Bennett says that step one is to fill positions in accordance with commitments made in the Impacts and Benefits Agreement (IBA) with the Innu Nation and the Benefits Strategy with the Government of Newfoundland and Labrador, which established a hiring protocol for the project. Commitments made in the IBA with the Innu Nation are a priority, followed by consideration of employment for qualified residents of Newfoundland and Labrador. For the generation portion of the project, qualified residents of Labrador will have priority, followed by residents of Newfoundland, and then Canadian and international labor. “At the end of the day, there is tremendous opportunity here for the community,” says Bennett, noting that this project is as large in scale as Hebron. More than 2,000 people have registered with muskratfallsjobs.com, the online jobs database for the project. Available, pending, and awarded contracts can be viewed at nalcorenergy.com/procurement-opportunities.asp.
Benefiting Newfoundlanders and Labradorians
$134 million to Innu businesses throughout Muskrat Falls construction.
$2.4 billion in rate savings to homes and businesses, with Muskrat Falls consumers’ electricity rates stabilizing, increasing just over one per cent per year. Long-term stable electricity rates for generations with the use of a renewable power source Infrastructure improvements to support the project and subsequent growth.
Creating renewable, sustainable energy
98 percent clean, renewable electricity for the province.
Displace oil-fired electricity from the aging Holyrood Generating Station, currently powering the province by burning approximately 18,000 barrels of oil each day at peak production.
Reduce greenhouse gas emissions by moving from oil-based to water-based energy, resulting in the reduction of one million tons of greenhouse gases every year.
Atlantic Canada (NL, NS, NB, PEI)
- 9,700 person-years of direct employment in the region
- 26,600 person-years in total employment
- $2.2 billion in total income benefits per year
- $370 million in average income benefits per year
- $340 million in taxes to the provincial government Canada
- 10,400 person-years of direct employment occurring in Canada
- 59,500 person-years of total employment
- $4.7 billion in total income to labor and businesses
- $780 million in average income benefits per year
- $710 million in taxes to the federal government
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