Lowest-cost Option for Electricity Consumers
Nalcor examined a broad range of generation supply options to meet the island’s growing and long-term electricity needs, including natural gas, small hydro, wind power, biomass, solar, enhanced conservation efforts, continued oil-fired generation at the Holyrood plant, and other thermal-based options.
After examining all available options to determine which ones were viable, two alternatives were confirmed:
- an oil-dependent alternative with continued use of Holyrood and the addition of more thermal generation, wind power and small hydro (Isolated Island); and
- Muskrat Falls with a transmission link to the island (Interconnected Island).
Building Muskrat Falls is the lowest-cost option for meeting the province's growing electricity needs.
Remaining isolated would mean a future that is dependent on thermal generation, burning millions of barrels of oil at the aging Holyrood plant. It would also include development of a series of smaller hydro, thermal and wind generating facilities around the island. The combined cost of building and operating the Isolated Island option exceeds the cost of building and operating the Interconnected Island option by more than $2.4 billion in 2012 (present day) dollars.
“MHI has found Nalcor’s work to be skilled, well-founded and in accordance with industry practices. The result of the CPW analysis indicates a preference for the Interconnected Island option of $2.4 billion over the Isolated Island option … MHI therefore supports Nalcor’s finding that the Interconnected Island is the least cost option of the two.”
The development of Muskrat Falls would mean the island would no longer operate as an isolated system, and would have the ability to import or export power.
With Muskrat Falls, the province will own a revenue-generating asset and have an interconnected system, with transmission links from the island to Labrador and to the mainland.