Thermal generation creates electricity by burning fuel to convert water into high-pressure steam. This steam turns a turbine that produces electricity. Water is used, and recycled, to help cool the steam and burn the fuel.

The Holyrood Thermal Generating Station is a three-unit, heavy-oil fired, steam cycle generating plant located Holyrood, Conception Bay North. It is a major source of electrical energy, generating between 15 and 25 per cent of the Island's annual needs (with the potential to generate upwards of 40 per cent, if needed).

The Holyrood Plant has a net rated capacity of 465.5 megawatts (MW) after allowance for station service loads and a firm energy capability of 2,996 gigawatt hours (GWh) per year. At peak production, the plant produces three billion kilowatt hours (kWh) and burns approximately 18,000 barrels of oil per day.

The plant was constructed in two stages. In 1969, Stage I, consisting of two generating units (Units 1 and 2) each capable of producing 150 MW, was started and placed in service in April 1971. In December 1979, Stage II, consisting of one generating unit (Unit 3) capable of producing 150 MW, was completed.

The Unit 3 generator is capable of synchronous condenser operation to assist in grid voltage control during the off peak season. In 1988 and 1989, Units I and 2 were modified to increase their output to 175 MW respectively.