Energy Plan - Government of Newfoundland and Labrador

Transmission and Distribution
Newfoundland and Labrador is blessed with abundant, environmentally
attractive hydro and wind generation potential. To realize the full economic and
environmental value of this potential to the people of the province, transmission
access to both domestic and export markets is essential.
Labrador-Island Transmission Link
Connecting the Labrador and Island electricity systems is the most effective way
to address many of the major issues affecting the Island system.
The cost of oil used at the Holyrood facility is forecast to increase significantly
over the long-term. This increase in the fuel cost, combined with expected
growth in the Island load requirements, is anticipated to result in significant
rate increases on the Island over the long-term.
Constructing the transmission link, and delivering Lower Churchill power to the
Island, is a more cost effective alternative to an isolated Island grid increasingly
dependent upon oil-fired thermal power resources. It is also consistent with
the goal of energy security in the province, as the cost of electricity from the
Lower Churchill through the link would not be subject to external factors such
as world oil market pressures.
POLICY
ACTIONS
Labrador-Island
Transmission Link
The Government of
Newfoundland and Labrador will:
• Build a transmission link
between Labrador and the
Island in conjunction with the
Lower Churchill development
and seek Federal Government
financial assistance in the
context of GHG emission
reduction initiatives.
Although the transmission link from Labrador has a significant initial capital cost,
the annual cost will be essentially fixed, resulting in long-term rate stability and
certainty on the Island. While there could be an initial increase in rates as the
transmission link is phased-in, the long-term lower rates and rate stability more
than offset any short-term phase-in rate impact.
The lower rates are expected to be very competitive when compared with other
jurisdictions that will be reliant on higher costs sources of electricity. This cost
advantage will be an important tool in attracting new industry to the province.
The link also provides a tremendous opportunity to increase the amount of
electricity generated by clean, renewable hydropower, reduce fossil fuel reliance
on the Island and provide rate certainty.
This transmission link will also allow two-way transmission of power, which
depending on available transmission routes, could assist large-scale wind
generation on the Island or facilitate the use of natural gas to generate electricity.
This will enable us to achieve greater benefits by adding Island resources to the
overall electricity supply for our use and for export.
Therefore, we will build new transmission infrastructure to link our electricity
systems in Labrador and on the Island. The Labrador-Island link will enable
us to meet almost all our electricity demand with clean, renewable electricity,
essentially with no emissions.
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