Energy Minister Charlie Parker said the project would account for eight to 10 per cent of Nova Scotia's total power needs, starting in 2017.
"This will be a significant contributor to us meeting the 2020 goal and it gives us confidence to make that goal a regulated target," he said.
Brennan Vogel, with the Ecology Action Centre, doubts the province can meet its goals without Lower Churchill.
"Certainly we praise the high level of ambition here in Nova Scotia with respect to renewable energy targets. However, we have reservations and concerns with regards to how we're going to meet those targets," Vogel said.
The Lower Churchill project is an 824 megawatt MW hydroelectric dam on Muskrat Falls, in central Labrador. The project is a partnership between Nalcor, Newfoundland and Labrador's Crown-owned energy corporation, and Halifax-based Emera Inc.-the parent company of Nova Scotia Power.
The proposal is currently under environmental review.
The deal involves the construction of 1,100 kilometres of high-voltage transmission lines, including two underwater cables. The first would be used to send power from Labrador to the island of Newfoundland, and the second to transfer electricity to Nova Scotia.
Parker said if the Lower Churchill project doesn't go ahead, Nova Scotia Power could still meet the target using power generated by wind or tidal sources.
But Vogel said he hasn't seen any plans to show how that could happen.