January 15, 2008 / 1:02 AM / in 10 years

Newfoundland and Labrador may develop hydro project

LOS ANGELES (Reuters) - Canadian Atlantic province Newfoundland and Labrador and a Nova Scotia utility on Monday announced signing an agreement to study a joint project to bring electricity to New England markets from the Lower Churchill Project in the Maritimes.

The Lower Churchill is one of the last big underdeveloped hydropower projects in North America, and has a capacity to make 2,800 megawatts of electricity, enough to power 1.5 million homes, said Emera Inc, parent company of one of the two utilities involved.

Newfoundland and Labrador Hydro, Emera and its unit Nova Scotia Power Inc want to determine if the project has merit.

Province-owned Newfoundland and Labrador Hydro is based in St. John‘s, Newfoundland, and is lead developer of the Lower Churchill project.

“We are looking forward to working with both Emera and Nova Scotia Power in an effort to identify mutually beneficial opportunities for this renewable, predictably priced, clean energy,” said Ed Martin, president and chief executive officer of Newfoundland and Labrador Hydro.

The specific destination of the power remains under consideration, the utilities said.

The Lower Churchill has two installations, at Gull Island -- capable of making 2,000 MW of electricity -- and Muskrat Falls, capable of making 824 MW of electricity.

Gull Island is about 225 kilometers (140 miles) downstream from the existing Churchill Falls Generating Station and Muskrat Falls is downstream another 60 kilometers (37 miles).

The existing Churchill Project can make about 5,400 megawatts of power on the Churchill River in Labrador, which Newfoundland and Labrador Hydro says is 65 percent of the generating potential of the river. The first hydro plant there began producing power in 1971.

“Potential routing options being explored by Hydro include the Maritimes submarine route and transmission through Hydro-Quebec’s transmission system,” the utilities said.

The project may also benefit from the eventual sale of carbon emission credits once such a market is in place. The utilities and Emera say the Lower Churchill project could displace more than 16 megatons of carbon dioxide emissions annually.

Newfoundland and Labrador Hydro is the fourth-largest power utility in Canada and has more than 7,200 megawatts of operating capacity. It supplies 80 percent of the electricity used in Newfoundland.

Nova Scotia Power is the principal subsidiary of Emera and has 460,000 power customers in Nova Scotia. Both are based in Halifax, Nova Scotia.

Reporting by Bernie Woodall

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