Announcement of the deal – which complements a partnership already in place between Nalcor and the Innu Nation – was made in St. John’s yesterday by the Honourable Danny Williams, Premier of Newfoundland and Labrador, the Honourable Darrell Dexter, Premier of Nova Scotia, the Honourable Kathy Dunderdale, Minister of Natural Resources, Ed Martin, President and CEO of Nalcor Energy, Chris Huskilson, Chair and CEO, Emera Inc., Joseph Riche, Grand Chief of the Innu Nation and Sebastian Benuen, Chief, Sheshatshiu Innu First Nation.
“This is a day of great historic significance to Newfoundland and Labrador as we move forward with development of the Lower Churchill project, on our own terms and free of the geographic stranglehold of Quebec which has for too long determined the fate of the most attractive clean energy project in North America,” said Premier Williams. “The benefits of this project for our province will be enormous including thousands of jobs and billions of dollars of economic activity.
“From day one, our government has taken a long-term, strategic approach to developing this project. Our priorities have remained steadfast; that is to achieve maximum benefits for our people, and to secure stable rates and markets with a good return for the people of this province. This agreement achieves these goals and also solidifies a mutually beneficial partnership with Emera Inc. and the province of Nova Scotia. Today marks the beginning of a new era of Atlantic Canadian cooperation and together we are telling the marketplace both in Canada and the United States that badly needed competition in the hydroelectric marketplace is on the way.”
The Lower Churchill River system is comprised of Muskrat Falls with 824MW of power and Gull Island with 2250MW. Phase two of the project will be the development of Gull Island for which construction is expected to start several years after Muskrat Falls.
The Muskrat Falls development will see power being transmitted from Labrador across the Strait of Belle Isle for use on the island of Newfoundland. Power will be available for recall use for industrial development in Labrador. Nalcor will then transmit surplus power from the island to Nova Scotia Power, a subsidiary of Emera, across the Cabot Strait into Lingan, Nova Scotia
“This is a historic day for Nova Scotia, and all of Atlantic Canada,” said Premier Darrell Dexter. “Through this partnership, Nova Scotia is taking a major step forward as an international leader in renewable energy. Today’s agreement will create thousands of new jobs; it will stabilize energy prices for Nova Scotia families and businesses well into the future; and it lifts the idea of Atlantic cooperation off the page and turns it into fundamental action, building a more prosperous nation.”
“This configuration is the most economic and reliable option to meet Newfoundland and Labrador’s needs over the coming years and opens the doors for the province to begin reaping the export benefits of our wealth of clean, renewable resources,” added Ed Martin, President and CEO, Nalcor Energy. “This strategic partnership with Emera creates significant opportunity today and well into the future as it will assist in building stronger interconnections among the four Atlantic Provinces and the northeastern U.S. enabling all to benefit from the wealth of environmentally friendly, affordable and sustainable power Newfoundland and Labrador and the rest of the region has to offer.”
Newfoundland and Labrador Hydro (NLH), a subsidiary of Nalcor Energy, is mandated to forecast electricity requirements in the Canadian province and bring forward the least cost, long-term option for meeting these requirements. As a result of growing provincial demand for electricity, NLH evaluated alternatives to develop new generation sources. It assessed alternatives and found the Muskrat Falls project with a transmission link to the Island to be the least cost alternative. The Muskrat Falls option is also more environmentally acceptable than maintaining an ‘isolated’ island power system. Once the Muskrat Falls development is operational, the energy price structure in the province will be stable and lower cost for consumers over the long-term and the province will avoid the volatility associated with the price of oil.
Before the project is sanctioned for construction however, a number of issues still need to be concluded, including: the release of the generation and transmission projects and the transmission project from environmental assessment processes; final ratification of the Lower Churchill IBA and Churchill Falls Redress Agreement; conversion of the Nalcor/Emera term sheet into formal legal agreements; finalization of financing; and completion of pre-front end engineering work.
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