Churchill Falls: clean energy at what cost?

The Churchill Falls Generating Station is at the center of Canada’s largest clean energy investment

The Churchill Falls Generating Station (CFGS) is an underground hydroelectric power station in Newfoundland and Labrador. According to Newfoundland and Labrador Hydro, the hydroelectric station is one of the largest in the world, producing 5,428 megawatts of electricity and supplying multiple provinces, primarily Quebec. On their website, Natural Resources Canada said that, “these combined construction projects – valued at nearly $70 billion – represent the largest clean energy investment in North American history. They will create thousands of jobs and economic prosperity for the region, including the Innu Nation of Labrador.”

The CFGS is one of the world’s most advanced and productive underground hydroelectric stations. In an announcement on Aug. 17, Prime Minister Mark Carney said, “[the generating capacity of CFGS] is more than the entire generating capacity of BC Hydro. It’s more than double the output of Bruce Power, the largest nuclear plant on this continent. It is the equivalent of 18 Hoover Dams in America, at its current operating capacity.” 

While it produces more energy than most hydroelectric power stations, the CFGS also provides clean energy, helping shift Canada’s energy reliance away from fossil fuels. According to the Canadian Climate Institute (CCI), the station is part of Carney’s commitment to doubling the size of Canada’s electricity grids. Rick Smith, the president of the CCI, said the CFGS “will also improve energy security and affordability in a time of volatile energy price swings while driving down emissions.” According to Natural Resources Canada, the recent Definitive Cooperation and Implementation Agreement signed between Hydro-Québec and Newfoundland and Labrador Hydro enables a series of energy projects which include investment in the CFGS. 

While the clean energy project has several benefits for Canada, there is a decades-long legal debate surrounding Hydro-Québec’s predatory long-term fixed-rate energy purchasing from the CFGS. According to Canadian Lawyer, in 1969, Hydro-Québec entered into a contract that “set a fixed price for the power that was to decrease in stages over time, with no price adjustment clause.” This means that as energy prices rose, Hydro-Québec continued to buy the energy from Churchill Falls at an extremely low rate, and this contract will continue until 2041. 

In 2010, Churchill Falls Labrador Corp. brought a case against Hydro-Québec, claiming the profits that Hydro-Québec made from the 1969 deal were “causing an injustice.” The Québec Superior Court dismissed this action. In the August deal, Hydro-Québec committed to pay for energy from the CFGS at an increased rate of 1.8 cents per kilowatt-hour from the previous 0.2 cents per kilowatt-hour, and that rate is set to increase to 11.5 cents per kilowatt-hour by 2041.

The CFGS raises concerns about its impact on local species. A scientific evaluation by Fisheries and Oceans Canada, focusing on the CFGS’s environmental impact, identified several issues resulting from the power station. The evaluation determined a large area of “altered fish habitat,” as well as smaller areas of complete loss of fish habitat. The evaluation also cited concerns about increases in mercury levels in the surrounding environment, which affect fish species. The evaluation notes uncertainty in the findings, particularly regarding the areas of complete loss of fish habitat and mercury levels, and encourages further monitoring to ensure no large-scale damage occurs.

The August deal includes $10 billion in investment from Ottawa, which will help ensure the CFGS has as little negative impact as possible while maximizing the benefits for all Canadians and the surrounding environment. The power station has the potential to be extremely beneficial for Newfoundland and Labrador, and minimizing the environmental impacts will help ensure the station remains productive and positive in the eyes of Canadians.