11/16/2012 02:04 EST | Updated 01/16/2013 05:12 EST

Report touts Muskrat Falls project as best alternative to oil-burning plant

ST. JOHN'S, N.L. - The Newfoundland and Labrador government has released another report that paints the Muskrat Falls hydroelectric project as the best alternative to refurbishing an aging oil-burning plant southwest of St. John's.

The Department of Natural Resources released a discussion paper today that concludes replacing the Holyrood thermal generating station will have a significant environmental benefit.

It's the latest in a series of reports released by the government as it tries to persuade the public of the merits of Muskrat Falls.

Environment Minister Tom Hedderson says closing the 40-year-old plant would be equivalent to taking 300,000 cars off the road.

The government says the facility is beyond its expected life expectancy and would need costly upgrades in order to keep operating, including the installation of emissions control equipment.

The government says it would cost between $600 million and $800 million to install the equipment, plus $12 million to $15 million a year to operate.

Critics say the government has not proven that Muskrat Falls is a viable project and have called for more thorough debate before sanctioning the development, which is estimated to cost at least $7.4 billion.