We Need the Power

Newfoundland and Labrador requires new sources of power to meet the province's future electricity needs. Our economy is growing and demand for residential and business electricity continues to rise steadily. Forecasts prepared by Newfoundland and Labrador Hydro show that without a new source of power for the island by 2015, demand will begin to exceed firm supply.

Demand is being driven by:

  • A strong economy and new business development
  • Growth in the number of residential customers
  • Higher than average new home construction
  • Growing electricity use in homes
  • Increased use of electric heat (86% of all new homes use electric heat)
  • Increased industrial demand, primarily driven by the nickel processing facility in Long Harbour

“The load forecast for the Interconnected Island option showed an increase in domestic load for the period to 2029, which was expected due to higher economic forecasts for personal disposable income and population. … The industrial load does not include any new accounts for the entire time-span, which is very likely conservative. MHI finds that the Load Forecast for the Interconnected Island option is well founded and appropriate as an input into the Decision Gate 3 process.”

MHI Review, October 2012, page 5

Overall, the island's electricity demand is expected to rise an average of 1.4% per year between 2011 and 2030. This assumes no new large energy intensive industrial customers in the province over this period.

How much has our demand for electricity changed?

Since 2002, residential demand has increased by 16% and commercial demand is up 10% on the island. The number of residential customers has increased by 12.6% and the average electricity use per household has increased by 3.4%. Over the same period 28,800 homes were constructed.

How much of the power from Muskrat Falls do we need?

Muskrat Falls is being built to meet the island's growing electricity needs. Right away, the island will need 40% of the energy from Muskrat Falls to displace the Holyrood plant, with that need growing over time. For 20% of the project cost, Emera Inc. will purchase 20% of the power for use in Nova Scotia, with Newfoundland and Labrador securing electricity transmission rights to flow surplus electricity to export markets.

The remaining 40% may be exported into Atlantic Canadian and New England markets or retained for our own use as needed, including potential mining developments in Labrador. The province is projected to need 80% of Muskrat Falls’ power by 2036, or even earlier as additional industrial growth occurs in the province.

What is the demand forecast based on? What if demand doesn’t increase as expected?

Newfoundland and Labrador Hydro has been responsible for meeting the province’s electricity needs for over 40 years. Their forecast is based on historical data and trends in electricity usage as well as on the province’s economic projections.

We have a pressing need to move away from our dependence on oil and replace the aging Holyrood thermal generating facility to cleaner sources. If we continue the current scenario, ratepayers will pay higher rates for their electricity.