The Churchill River in Labrador is a significant source of renewable, clean electrical energy; however, the potential of this river has yet to be fully developed. The existing 5,428 megawatt (MW) Churchill Falls Generating Station, which began producing power in 1971, harnesses about 65% of the potential generating capacity of the river. The remaining 35% is located at two sites on the lower Churchill River, known as the Lower Churchill Project.

The proposed Lower Churchill hydroelectric project will consist of two of the best undeveloped hydroelectric sites in North America: Gull Island, located 225 kilometres downstream from the existing Churchill Falls Generating Station; and Muskrat Falls, located 60 kilometres downstream from Gull Island. Together these two plants are able to produce energy for up to 1.5 million homes annually and contribute significantly to the reduction of air emissions from thermal, coal and fossil fuel power generating. In particular the projects would displace an estimated 16 mega tonnes of carbon dioxide emissions annually from comparable production from coal thermal generation.

A nine year construction period is scheduled to begin at Gull Island in 2009 followed by Muskrat Falls in 2012. First commercial power is scheduled for 2015