New source of electricity needed, says minister

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Jerome Kennedy (left), minister of Natural Resources and Gilbert Bennett, Nalcor's vice-president of the Lower Churchill Project, speak to reporters at Confederation Building. — Photo by Keith Gosse/The Telegram

A report on electricity demand concludes that Newfoundland and Labrador needs a new source of electricity generation because demand for electricity on the Island will exceed supply in the near future.

The report, "Electricity Demand Forecast: Do We Need the Power?," released today by the Department of Natural Resources, identifies key influencers in demand growth and supports Manitoba Hydro International’s (MHI) discussion on electricity demand forecasts in its report released on Oct. 30.

 “Electricity demand is strongly linked to economic growth and since 2002, Newfoundland and Labrador has experienced significant economic growth as a result of mining and petroleum developments,” said Natural Resources Minister Jerome Kennedy. “GDP has doubled, personal disposable income per person has increased by 62 per cent, and housing starts in the past decade have been, on average, 56 per cent higher than in the previous decade.”

 From 2002 to 2011, about 28,800 new homes were constructed with 86 per cent of them using electric heat. In 2011, there were approximately 18,600 more residential customers on the Island than in 2006. While industrial demand has fluctuated, growth in residential and commercial demand has sustained electricity demand.

 “We are experiencing a time of unprecedented development and opportunity in Newfoundland and Labrador,” said Kennedy. “Forecasted demand clearly indicates that future growth will lead to further increases in the number of households in the province and new developments in the commercial and industrial sectors.”

Other highlights from today's news release:

 • The current economic forecast prepared by the Department of Finance indicates GDP growth of 1.6 per cent annually for the next 20 years. The province says the forecast shows continued growth in the economy driven by major investments in natural resource projects. It also shows that the number of households in the province and new developments in the commercial and industrial sectors are expected to increase.

 • Newfoundland and Labrador Hydro’s (NLH) Planning Load Forecast indicates that by 2015 the province will be challenged to reliably meet peak demand in winter months and, post-2019, there will not be sufficient energy supply to reliably meet demand through the year. NLH’s electricity demand forecast points to continued residential and commercial growth. Industrial demand will be led by the Long Harbour processing facility which will require approximately 85MW of new supply.

 • In addition to Island demand, an estimated $10-15 billion of investment in Labrador mining projects may be realized over the next decade. Based on projects already in construction or near sanction, existing generating capacity to meet winter peak demand in Labrador will be exhausted by 2015-17.

 "Nalcor has a mandate to meet the province’s growing electricity needs. Through long-term load forecasting and prudent generation planning, we can ensure we continue to meet consumers’ electricity needs today and long into the future," said Gilbert Bennett, Nalcor's vice-president of the Lower Churchill Project. "Our load forecast clearly shows the need for a new source of power for island electricity consumers and Muskrat Falls and the Labrador-Island Link is the lowest-cost option to meet this need."

 • MHI validated the methodology and data behind NLH’s electricity demand forecasting process. MHI found that residential demand was higher in the 2012 forecast and that it was an improvement over the 2010 forecast. MHI noted that the Island demand forecast was well-founded and appropriate as input into the Decision Gate 3 process, but that the overall forecast was conservative which suggests there is potential for even greater commercial and industrial demand in the province compared to the forecast.

  “The historical trends, present demands, economic indicators and proven forecasting experience of Newfoundland and Labrador Hydro clearly establish that new generation is essential to address demand needs,” said Kennedy. “The Muskrat Falls project is the least-cost solution to this supply challenge. It is critical that sufficient generation supply exist to ensure that homes and residences have access to reliable least-cost electricity for heating and other household requirements and that business and industry have the power they need to grow.”  

 To view the discussion paper, please visit: www.powerinourhands.ca.

Organizations: Newfoundland and Labrador Hydro, Department of Natural Resources, Department of Finance

Geographic location: Newfoundland and Labrador, Iceland, Long Harbour Decision Gate

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Recent comments

  • Starr
    November 08, 2012 - 05:57

    Well then why not hand out grants for alternative heating sources, more sustainable heating sources such as geothermal heating, wind power and solar power?? Much more sustainable than our current electricity source - and more environmental friendly. Would leave a much smaller "footprint".

  • Cyril Rogers
    November 07, 2012 - 22:58

    They have become so arrogant and certain of the rightness of their position that they don't need independent analysis. They know what is best for us whether we want it or not. We will get no say! Are we that apathetic that we will simply allow this to go ahead with no objection? If we do, shame on us! These figures were concocted to justify their grandiose scheme; as long as it justifies it in their own minds, who cares if it could be fatal to our economy down the road!

  • H JEFFORD
    November 07, 2012 - 21:08

    The Holyrood generating plant burns Millions of Dollars worth of oil per month. So much oil that the smoke pouring out of its stacks has it listed as one of the top 10 air polluters in the world, How much dirt or smoke is coming out of its stacks to have it listed as in the top 10 air polluters in the world? And how much oil have it got to burn or waste ? Because if it is pumping out that much smoke half of the oil burned is wasted?or not burning clean,if your car is pouring out black smoke its wasting fuel or gas, So is a oil fired generator. The cleanest, cheapest to operate, and most reliable and cleanest source of power in the world, when built is HYDRO POWERED GENERATING PLANT LIKE THE UPPER CHURCHILL, OR THE MUSKRAT FALLS, THE CHURCHILL RIVER RAN FOR MILLIONS OF YEARS AND WILL RUN For MILLIONS MORE AT NO COST TURNING THE GENERATING TURBINES. THE CHEAPEST MOST RELIABLE SOURCE OF POWER IN THE WORLD WHEN BUILT, NO SMOKE OR SHIP loads of oil, Powered By the Churchill River That Ran For Millions Of Years And Will Run For Millions Of Years MORE Turning The Generating Turbines Of Muskrat , And CHURCHILL FALLS AT NO OR LITTLE COST, THE CHEAPEST,CLEANEST,MOST DEPENDABLE SOURCE OF Power IN THE WORLD. " HYDRO POWER"

  • Tim Jamison
    November 07, 2012 - 16:45

    All you antis went on and on and on for monthes (if you don't remember): "Just wait 'til the report. Just you wait." Well, here it is. I hope you've been enjoying it

  • John Smith
    November 07, 2012 - 15:49

    Yes Scott b'y...it's all a well planned conspiracy...they are all in on it...you are right...they Nalcor and the government are all out to get us by saving us 20 bucks a month on our power bill/... LOL get a life...

  • Reporttsss
    November 07, 2012 - 15:20

    How many more self-serving reports is Nalcor and this guy Martin going to release. Martin has taken over the Premier position on this issue. Dunderdale is lost in the paper and Kennedy is busy shuffling it for Martin – Supreme Ruler on Muskrat Falls. Isn’t NL part of a democratic country? What was that we tried before Confederation – some kind of Commission – Who was on that Commission? Well this got to be the reincarnation – Supreme Ruler (Martin) asks Dunderdale, Kennedy and the underlings to sanction Martin’s multi-billion dollar deal . Without any input from the people or its public review processes, no say other than the blog! Well I guess we changed our governance to the blog – well that all happened a kind a quick a guess I missed the referendum on that one! I only wonder now who bails er out after this one.

  • Maurice E. Adams
    November 07, 2012 - 15:14

    If electricity growth were so strongly linked to GDP how come since 2004 demand dropped by 15 %? If residential energy use were so strongly linked to the number of homes how come SINCE 1990 the number of homes went up 19% and RESIDENTIAL energy use went down 17%. There is no justification for a 50 year average increase in demand of 0.8% compounded annually, and that is what MF needs to be viable --- not a 10 year forecast increase.

  • Robert
    November 07, 2012 - 14:56

    Hey as an alternative we could use all the hot air coming from the NDP and Liberals. But I'm sure that won't last long..........soon they'll be saying it was our idea in the 1st place!

  • Winston Adams
    November 07, 2012 - 14:35

    Obviously Bennett is not considering efficient heating potential in their forecasting, which can substancially reduce demand and lower electricity costs to consumers.

  • Graham
    November 07, 2012 - 14:28

    Old Jerome really has a way with words dosent he now. The man can babble off for ever and say almost nothing of any real substance. No wonder hes Dunderdales mouth piece. lady cant even properly read whats prepared for her most of the time. I am not sure who I will vote for next election but it sure as hell wont be for anyone associated with the PC Party.

  • Cold Future
    November 07, 2012 - 14:24

    The economic viability of Muskrat is a challenge because of the $4 billion premium to go around Quebec. So called most cost options like isolated island and build it as you need it are so much cheaper so much less a burden on the consumer ans so so much less risk they should be given much more study. We should not put so many eggs in a single basket. It is diifficult to make a case for taking on so much risk and potential for so much downside consequence, high power rates, subsidy for exported power, making ourselves uncompetitive, not to mention the extremely high risk with the capital cost. It seems that the number of studies to try to convince the public of this project is directly proportional to its high risk and its poorly prepared justification.

  • Scott Free
    November 07, 2012 - 14:01

    Whomever pays for the report, owns the report; and, as such, can dictate the contents and findings to support government position. The report was "released" by government, but who reseached and wrote it? A Tory supporter, no doubt; paid handsomely to spew out exactly what government wanted in the report.

    • skipper
      November 07, 2012 - 15:41

      They also need more home care and more housing and better health care but all that is not addressed. any schools closeing this week?