Energy

Hydro-Electricity

The presence of hydro-electricity can be considered one of the foundation stones of the current and potential success of Labrador West. As much as iron ore mining affects the region, hydro-electricity does as well. A sufficient and reasonably-priced power supply to the mining operations has been critical to the past and existing success of the region.

The hydro-electric availability in Labrador West comes from Churchill Falls. The Churchill Falls generating station, the second largest underground power station in the world, generates 5428 MW of power. By comparison, all other sources of power in the province including gas turbine, diesel, and oil - 45 sites in all - generate 1847 MW of power. The proposed Lower Churchill hydro-electric development, which includes Muskrat Falls and Gull Island projects, will produce a further 2800 MW of power. Both of these projects are currently under active consideration by the Government of Newfoundland and Labrador.

Labrador West has the lowest average cost for power in the province. Clearly, this is a cost benefit for Labrador-based users. Access to sufficient industrial power is the issue. Effective and collective lobbying will continue to be necessary for re-direction of the available 127 MW of power to the Labrador West region for current mining needs and future investment opportunities once they have been identified. It is a critical tool for growth and industrial development.

SUMMARY OF OPPORTUNITY - HYDRO RESOURCES

Market Availability	The market demand for power of any kind has grown tremendously in recent decades. This growth is now realizing a new unprecedented growth which is being fuelled by developing countries, notably China.

Resource Availability	The Churchill River in Labrador is recognized as a significant supply of renewable energy that has yet to be fully developed. The current facility, completed in 1974, produces 5428 MW with the majority of the energy being sold to Hydro-Quebec under a long-term contract that expires in 2041. Two additional potential sites, Gull Island and Muskrat Falls, are located downstream from the existing facility at Churchill Falls. A 2000 MW Full Island project has the potential to produce an average 11.9 TWh of energy annually; the 824 MW Muskrat Falls development would produce 4.8 TWh annually. Two possible routings exist: one through Quebec connecting to the Quebec transmission line at Montagnais and the second through Newfoundland via submarine transmission cables.

Competitive Advantage	Resource is world renown; is compatible with the Kyoto Accord; replaces other finite energy resources (i.e. coal, diesel)

Competing Jurisdictions	Developed countries, in response to their need for power, are investing in other developing countries to assist them in developing their resources. These countries can provide cheap labour for resource development and enter into long term agreements at favorable rates.

Competitive Disadvantage	The power from a new development in Labrador is not comparatively "cheap" in terms of investment attraction.

Transportation Requirements

Capital Investment	Unknown

Power Requirements	A second transmission line to service Labrador West is on the "high priority" list of requirements for the region.

Training	Skilled Trades People are available.

Labour Requirements Available labour Kill requirements Other support infrastructure	Labour is relatively high priced.

Infrastructure Requirements Land Buildings Other support infrastructure	Labour is relatively high priced.

Risks (low/med/high)	Unknown

Cluster presence	Yes

Seasonality	Not relevant

Regulatory Environment and Permits	Subject to the normal environmental requirements. Question of whether NAFTA will dictate the price of power needs to be answered.

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