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Canadian officials on Dec. 10 announced the finalization of a federal loan guarantee for Nalcor Energy's Lower Churchill hydroelectric projects.
Rob Moore, Regional Minister for Newfoundland and Labrador, was joined in this announcement by Kathy Dunderdale, Premier of Newfoundland and Labrador, and Andrew Younger, Nova Scotia's Minister of Energy.
"The Lower Churchill projects will create jobs and economic growth for people in Atlantic Canada, while substantially reducing greenhouse gas emissions," said Oliver. "The federal loan guarantee will not only provide a stable source of clean energy for the region, but will also save over [C]$1 billion for ratepayers in Newfoundland and Labrador and Nova Scotia."
"This is an important step towards realizing the full potential of one of North America's most ambitious clean energy projects," said Moore. "The Lower Churchill projects will generate major economic benefits and create thousands of high-quality jobs in Newfoundland and Labrador."
"Our government stands up for the stabilization of power rates and energy security for our region and country," said Peter MacKay, Federal Justice Minister, Attorney General of Canada and Regional Minister for Nova Scotia. "The benefits of this loan guarantee will be passed on directly to ratepayers in both provinces.”
The federal loan guarantee will apply to up to C$5bn of project debt for Nalcor's Muskrat Falls Hydroelectric Generating Station, the Labrador Transmission Assets and the Labrador-Island Transmission Link. An additional $1.3bn of debt for the Maritime Link will also benefit from the loan guarantee when the agreement is finalized for that project.
"The Muskrat Falls hydroelectric development will establish Newfoundland and Labrador as a leader in clean, renewable energy and secure significant economic and employment opportunities that will benefit not only this province, but Atlantic Canada and the rest of the country," said Dunderdale.
The projects will make a major contribution to meeting Atlantic Canada's energy needs while reducing annual CO2 emissions by up to 4.5 megatonnes per year.
"The Maritime Link project will enable competition and the development of our renewable electricity market, and helps us meet the federal requirements to reduce our greenhouse gas emissions," said Younger. "We are pleased that the federal government is supporting this important regional project that will provide a clean and renewable source of electricity for decades to come."
The Lower Churchill River Projects will create approximately 1,500 jobs during each year of construction. The Muskrat Falls station alone will provide approximately 3,100 direct jobs during the peak of construction.
Nalcor, Emera to take part in this series of projects
In June 2011, the government committed to supporting the Lower Churchill projects. In November 2012, Prime Minister Stephen Harper announced that the federal government had reached an agreement with the governments of Newfoundland and Labrador and Nova Scotia, as well as with two companies, Nalcor Energy and Emera Inc., on the terms and conditions for the federal loan guarantee for the Lower Churchill projects.
- Nalcor is developing the 824-MW Muskrat Falls station (located on the Churchill River in Labrador, downstream from the existing Churchill Falls facility). This facility is expected to generate 4.9 million megawatt-hours (MWh) annually.
- The Labrador Transmission Assets will be a 315-kV, high-voltage alternating current transmission interconnection between the proposed Muskrat Falls station and the existing Churchill Falls Hydroelectric Generating Station.
- The Labrador–Island Transmission Link will be an estimated 1,135-kilometer, high-voltage direct current transmission line between the Muskrat Falls Generation Facility in Labrador and the Island of Newfoundland with a transfer capability of 900 MW.
- The Maritime Transmission Link will be a 520-kilometer transmission line consisting of high-voltage direct current line and high-voltage alternating current line to bring power from the Island of Newfoundland to Cape Breton, Nova Scotia, with a transfer capability of 500 MW.
Nalcor Energy and Emera estimate the total projected cost of the Lower Churchill River projects to be about C$7.7bn. Nalcor Energy will construct and own 100% of the Muskrat Falls station and will also build the Labrador–Island Transmission Link through a joint venture with Emera (with Emera having an option to take a stake in this transmission line). Emera will also build, operate and own the Maritime Transmission Link for 35 years, after which the ownership of the Maritime Transmission Link will revert to Nalcor Energy.
The Nalcor website said that Lower Churchill will be built in two phases. Phase one is the 824-MW hydroelectric facility at Muskrat Falls, with construction already underway and expected to take five years to complete. "When the generating facility is operational, approximately 40% of the power generated at Muskrat Falls will be used to meet the island’s electricity needs," said the website. "For 20% of the project cost, Emera Inc. will purchase 20% of the power from Muskrat Falls for use in Nova Scotia. The remaining 40% of the power may be exported into Atlantic Canadian and New England markets or retained for our own use as needed. The province is projected to need 80% of Muskrat Falls’ power by 2036, or earlier as additional industrial growth occurs."
Phase Two of the Lower Churchill Project will consist of the development of the 2,250-MW Gull Island hydro facility and associated transmission to markets.