Canadian provinces eye massive hydro power project

The $6 billion Conawapa power project would be located on Manitoba's Nelson River, 800 km north of Winnipeg, and include a high-voltage transmission line east to Ontario, which has been hit by growing worries over electricity shortages.

At 1,250 megawatts, enough to power 1.25 million average homes, Conawapa would be water-rich Manitoba's biggest hydro project. Government-owned Manitoba Hydro now runs 16 generating stations, 14 of them hydroelectric plants.

Manitoba Premier Gary Doer and Ontario Premier Ernie Eves signed a memorandum of understanding on Friday, kicking off the C$2-million study into the development, to be carried out by Manitoba Hydro and Hydro One, Ontario's main transmission grid.

The study, expected to be completed by the end of the year, will examine costs, estimated in-service dates and environmental and regulatory requirements, the provinces said.

The current estimated cost of the hydro station is $5 billion and construction is expected to take about five years.

The transmission line to Ontario could be worth $1 billion. It would supply as much as 5 percent of Ontario's peak demand.

Ontario, home to more than 11 million people, has been hit by rising electricity rates following a botched attempt at privatization. It is now fearing shortages and struggling to bring nuclear units back on line to meet peak summer demand.

Meanwhile, its coal-fired stations are slated to be retired by 2015.

Manitoba said the Conawapa project would require "minimal" flooding of 3 square km because of the region's geography.