Your Questions Answered
Our reports to our regulator contain thousands of pages of technical information. Below you will find answers to some of the questions you may have about our plan to power the province.
Why do we need more electricity?
Several factors impact the need for electricity with demand and reliability being the main drivers. Public policy is rapidly shifting the energy sector at a velocity that hasn’t been seen since the 50s and the 60s. This accelerating shift has driven industrial and commercial growth, electrification of vehicles, and a switch from oil to electric home heating.
Changing consumer behavior, industry changes and opportunities, as well as the evolving climate change policies have all accelerated demand for electricity compared to what has been seen in recent years and decades. We must also consider reliability of the system for all our customers.
As a result, we can no longer plan for a relatively stable and predictable electricity future. As all utilities, we must now manage the impacts of this acceleration and the uncertainty it brings for our system operators.
We must also ensure we deliver on the reliability our customers expect—and deserve. Reliability of the electricity grid is impacted by many factors including the type and age of the assets.
How much electricity does the Island need?
The island needs both capacity to meet the demand at the highest point of each day and energy to ensure enough power is generated throughout the year.
The total energy use on the island was almost 8 terrawatt hours (TWh) in 2023. By 2034, it’s expected to grow to 9.2 TWh. That’s a 16 per cent increase for the island alone.
Based on the minimum investment required, we need at least 385 megawatts of additional capacity and 1.4 TWh of new energy by 2034 to address load growth and reliability needs.
This growth forecast is conservative. It doesn’t include significant industrial growth such as from hydrogen facilities or other major mining opportunities. As these opportunities progress, Hydro may need even more supply.
How do you decide which electricity sources to build?
To manage uncertainty, we developed and forecasted for a variety of scenarios, ranging from slow to fast growth and speed of decarbonization.
As all utilities do, we apply statistical modelling to determine how much electricity is needed and which resources are available to best meet the expected demand across the scenarios.
Our analysis takes into account many factors influencing reliability, cost, and environmental impact of options. The models consider historical forecasts, fuel price and availability, weather and climate, current asset status and performance, resource options, and timelines to approve, build, and connect new resources.
Hydro’s analyses are reviewed by an external consultant.
What happens if you don’t build more sources?
Without action, there will come a time that lack of power will impede economic development. Not only will electricity be an economic bottleneck, but at some point reliability could also be compromised as load grows.
How are you going to meet expected growth in Labrador?
Hydro is accountable to deliver electricity throughout Labrador. We serve the most remote communities on the Labrador coast, as well as the Labrador Interconnected System.
Significant work is ongoing to address the incredible energy opportunities throughout Labrador. Hydro is working closely with Indigenous peoples, customers and partners to understand their needs. This will allow us to develop plans and to determine the infrastructure and investment needed to power our largest geographical service region.
How does customers concern about the cost of living affect our next decisions?
In our thinking and planning in the last year, we also engaged our customers. We undertook a digital engagement process where we reached out to customers across the province to get their opinions on our next big decisions.
Customers have been very clear. The cost of living, including electricity rates, is a concern. And that is why the recommendations presented in the 2024 Resource Plan are based on the minimum investment required—on what we absolutely and urgently must do to support reliability and begin to prepare for load growth.
If you overbuild, it costs more than necessary. To ensure we are not overbuilding for scenarios that do not materialize we are moving forward with the minimum investment required—which reflects the slowest decarbonization trend, and therefore, the least investment, and least impact on cost. Additional investment may be required, but we are carefully analyzing our needs to ensure we make the right investments at the right time.
I thought Muskrat Falls was the answer?
The Muskrat Falls Project is now online, and while we recognize there were many challenges, we are seeing value from the project. At the time of the decision to build Muskrat Falls, it was a solution to meet the forecasted demand for the coming period. That decision time was more than a decade ago. Today, electrification has changed everything and new solutions are needed. We are again looking to the near future to determine what will be needed for the next ten years and beyond.
How can we be sure this won’t be another Muskrat Falls?
One of the key lessons learned from the Muskrat Falls Inquiry was to ensure that more of the upfront planning and supporting evidence was gathered and made available for external examination prior to moving forward with construction. That is exactly what Hydro is now doing—we have explored many potential solutions for what is viable and we will continue to fully vet these options before submitting applications for the right solutions to our regulator.
Informed by the Inquiry, and to prepare to bring these new sources of supply online, we have formed a Major Projects Team comprised of experienced subject matter experts from across our organization, and across a variety of professional trades and corporate services. This team will be supplemented by experts as necessary, with oversight of Hydro’s Executive and Board of Directors.
Is the Labrador Island Link reliable?
The Labrador Island Link is online and delivering great value.
Our analysis has factored in a range of potential performance scenarios for the Labrador Island Link for the longer term. Our plan also reflects careful consideration of appropriate backup generation in the event of an outage on the Labrador Island Link.
“Forced outage rate” is the industry’s standard metric to qualify an assets reliability—how often an asset was unexpectedly offline. The Labrador Island Link had an equivalent forced outage rate of 4 per cent in 2023, essentially available 96 per cent of the time (not accounting for planned maintenance outages). As expected with any new asset, there are items to address early in its operation.
Together with external experts, we have been studying the Labrador Island Link’s reliability and are working to better understand the impact of climate change, with a focus on various icing events and conditions. As more events are possible in a climate changing world, we have been taking action to implement recommendations such as improved monitoring, including the installation of additional weather stations, as well as structural reinforcements in specific areas.
What about Churchill Falls?
The Churchill Falls facility is an incredible and unique asset and it will continue to play a very important role in this Province’s energy future. We are incredibly proud to be at the table to discuss its future.
Why are we exporting power if we don’t have enough to power our own province?
Hydro has contractual commitments to deliver electricity to Quebec and to Nova Scotia. In addition, there are times when customer demand for electricity is low here at home, and our system has capacity to produce more energy than our own customers need. During those times we have an opportunity to sell it to other provinces and states for their use. At other times, we may need to purchase more electricity for ourselves.
The sale of electricity is a source of revenue that helps to offset of the cost of our power system. To make all of this happen, Hydro’s Energy Marketing team works 24 hours a day, 7 days a week, monitoring our system’s supply, local electricity use, and demand for electricity in other markets. It’s a complex and delicate balance to ensure our customers have all the energy they need, or are benefiting from the sale of energy we don’t need in Newfoundland and Labrador.
Will the new rate mitigation plan cover the costs of this new plan? Will this increase my rates?
While the new rate mitigation plan provides certainty for our customers through 2030, Government, along with Hydro, have stated a commitment for future mitigation. What that might look like beyond 2030 will be reviewed closer to that time. Recovering costs for these new builds will depend on a number of factors including system costs and electricity supply and demand requirements to provide reliable service for customers in the decade ahead. With increased growth and demand on the system, there is naturally an increase in the customer base which helps share these costs across the system.
Why is Hydro considering a Combustion Turbine?
We made a commitment that we would examine all potential new sources of electricity, especially since we know customers are concerned about how this potential project impacts rates. So we must consider how a combustion turbine could be integrated into our system and provide added reliability. A combustion turbine(s) on the Avalon is critical for ensuring reliable backup generation and meeting demand during peak. This solution has the ability to use renewable fuels, once they are reliably available in our region. We have been advancing the Front-End Planning and Engineering, as well as the Environmental Assessment process to ensure we have all the evidence needed to support our application to build.
Are you looking at wind or getting electricity from Green Hydrogen?
We consider all potential sources of supply to meet demand for electricity. Source selection is based on delivering electricity at the lowest possible cost, in an environmentally responsible manner, consistent with reliable service. There is currently limited wind on the Island and Hydrogen projects are still in the planning and feasibility stages. As wind and hydrogen energy become available, those sources will be considered in our energy mix. We expect to issue an Expression of Interest for new sources of energy in 2025.
Can I generate my own electricity for my own use?
Yes. The provincial net metering policy allows customers to generate their own electricity for their own needs up to 100 kilowatts. There is a five megawatt cap on net metering in the province that has been in place since the program began in 2017. At the end of 2023, more than 80 per cent of the provincial cap remains available.
Have you considered time-of-use rates?
Peak demand management is a priority and the use of dynamic rates such as time of use or critical peak pricing is being studied jointly by Hydro and Newfoundland Power. A move to dynamic rates will require a significant investment in smart metering infrastructure in the province. Hydro will continue to work closely with Newfoundland Power on conservation and demand management initiatives through the takeCHARGE partnership.