MONTREAL - Quebec will spend nearly $2 billion to maintain its bit-part in the nuclear industry by sprucing up a power plant some charge is too old, too small and too dangerous to merit a new lease on life on life.

The province's energy utility announced on Tuesday that Gentilly-2, Quebec's only nuclear power plant, will get a major retrofit aimed at increasing its lifespan to 2040.

"It's a good project that will allow us to continue to operate for many more years a plant that is safe . . . a plant that will produce electricity at a competitive price," Hydro-Quebec president Thierry Vandal told a news conference in Becancour, Que.

Located on the shores of the St-Lawrence River, about halfway between Montreal and Quebec City, Gentilly-2 only produces three per cent of the province's energy output.

Most of province's electricity needs are met by hydroelectric power production. Hydro-Quebec claims the nuclear plant plays an important stabilizing role for the province's power grid.

However with nearby Trois-Rivieres hit hard by slowdowns in the manufacturing and forestry sector, economic benefits were also a deciding factor.

The renovations will result in about $600 million in spinoffs for Quebec and will create about 800 jobs over a 20-month period, in addition to the station's current staff.

Engineering and procurement are slated to begin this year, with construction to start in 2011 and wrap by 2013.

"It's a good business decision for the regional economy as well as for the rest of Quebec," said provincial Transportation Minister Julie Boulet, who also represents the central Quebec region.

The $1.9 billion price tag cited Tuesday is $400 million higher than estimates made earlier this year. Original estimates had been as low as $800 million.

The Point Lepreau nuclear power plant in New Brunswick - considered Gentilly-2's twin as both use CANDU-6 reactors - is currently being refurbished at a cost of $1.4 billion to add another 25 years of operating life.

Dismantling Gentilly-2 was pegged at $1.6 billion.

Vandal stressed the utility is working to ensure there will be no cost overruns, including fixing prices with some suppliers.

"Our estimate derives from eight years of feasibility studies, evaluation, preparatory work and inspections," he said.

But environmental groups question whether Hydro-Quebec has been seduced by the so-called "nuclear renaissance" and its characterization of nuclear energy as safe and green.

"Generally in the nuclear world, a lot of it doesn't have to do with economics and more to with the prestige of having a nuclear facility," said Greenpeace energy campaigner Shawn-Patrick Stensil.