Hydro planning $1B investment for Bay d'Espoir and new turbine to build power grid

Newfoundland and Labrador Hydro is planning to invest more than $1 billion to add an eighth unit at the Bay d'Espoir hydroelectric dam on Newfoundland's south coast and a new 150-megawatt combustion turbine — with the aim of boosting the energy grid.

CEO Jennifer Williams, who made the announcement Thursday at Energy N.L.'s annual conference in St. John's, said an increase in power demand is expected in the next decade, driven partly by population growth and electrification.

"There's a lot of electrification that has started. It's not stopping. So we have to take action," she told reporters.

"We have to start building because the extra capacity and the extra energy that we have now is going to run out. So we don't want to be in a situation where you run out of electricity."

The Crown corporation wants to build an eighth unit at the Bay d'Espoir hydroelectric dam — which Hydro has considered in the past — to add 150 megawatts to the grid. A new combustion turbine capable of using renewable fuels installed on the Avalon Peninsula would add another 150 megawatts.

The additional power is expected to come online by 2034, Williams said, who the province will need 380 more megawatts of power.

Williams also announced plans to buy 80 megawatts of wind power, which is not included in the $1-billion price tag.

There are five companies with wind energy proposals before the provincial government. The power could come from a mix of suppliers, she said, depending on which company has energy available for sale and for how much, among other factors.

The Crown corporation's hydroelectric megaproject Muskrat Falls is behind schedule and its construction cost totals$13.5 billion, almost double the expected cost. This time around, Williams said, Hydro is being more cautious, a lesson that came out of the Muskrat Falls inquiry.

Hydro is carrying out Class 3 estimates — an estimate based on preliminary design work — on the project, she said.

"Those are the things that are going to help us not have similar issues going forward," said Williams.

The plans will also go before the Public Utilities Board for review, she said.

Much of the planned work will be done through Hydro personnel, she said, but they will have to bring in experts from outside the Crown corporation. But there is an "owner's team" that will report to Williams.

It will be well into the 2030s before the $1-billion costs are seen, said Williams, so the Crown utility has more time to plan to mitigate how costs will be felt by consumers. It will require Hydro to work with the provincial government, she said.