renewable electricity plan - ns energy and...

Renewable Electricity PlanA path to good jobs, stable prices, and a cleaner environment.

April 2010

© Crown copyright, Province of Nova Scotia, 2010

This document is available on the Internet at: www.gov.ns.ca/energy. For further information about Nova Scotia’s Renewable Electricity Plan, please contact Nova Scotia Department of Energy, 400-5151 George Street, PO Box 2664, Halifax, Nova Scotia B3J 3P7. Tel: (902) 424-4575

Table of Contents

Executive Summary 2

1.0 Where We Are Now 4

2.0 Where We Need to Go 6

3.0 Underlying Principles 8

4.0 Meeting the 2015 Commitment 9

•MediumandLarge-ScaleProjects

•Community-BasedFeed-InTariff

•EnhancedNetMetering

•ForestProductsAssociatedBiomass

•MarketStructureandGovernance

5.0 Achieving the 2020 Goal 16

•RenewableResourceMixAfter2015

•TheRoleofTidalEnergy

•TheRoleofNaturalGas

6.0 New Roles and Responsibilities 20

•RenewableElectricityAdministrator

•NovaScotiaPowerInc.

•UtilityandReviewBoard

•ProvinceofNovaScotia

7.0 The Role of Government 21

•Facilitation

•Financing

•CoordinatingApprovals

•EmissionsManagement

•LocalGovernment

•FederalGovernment

•FirstNations

•LegislationandRegulation

•SupplyChainDevelopment

8.0 Building a Secure, Reliable Network 23

•TransmissionandDistribution

•RoleofImportsandExports

•SmartTechnologies

9.0 Things This Plan Does Not Do 25

10.0 Costs and Benefits 26

11.0 Implementation 28

2 Renewable Electricity Plan

Executive Summary

ThisRenewableElectricityPlansetsoutadetailed

programtomoveNovaScotiaawayfromcarbon-

basedelectricitytowardsgreener,morelocalsources.

Themotivationforthisplanissimple:nearly90

percentoftheprovince’selectricitysupplycomesfrom

fossilfuels—mostofitcoal.Coalmademoresensewhen

itwasminedhereinNovaScotia,butnowwebuyitfrom

others.Thisover-relianceonasinglefuelsourceweakens

ourenergysecurity,bindsustothevolatileandupward

trendofinternationalprices,anddrainswealthaway

fromtheprovince.Equallyimportant,ithasanegative

impactonbothourhealthandourenvironment.

Theprovinceiscommittedtomakingachange—

andtokeepingitscommitmenttomakelifebetterfor

NovaScotiafamilies.

The Commitment: 25% Renewable Electricity by 2015.

Thisplancommitsthe2015targetof25percent

renewableelectricitytolaw.Bythatdate,NovaScotia’s

totalrenewableelectricitycontentwillhavemore

thandoubledfrom2009levels—andtheequivalentof

morethan300,000homeswillbepoweredbyclean,

localsources.

The New Goal: 40% Renewable Electricity by 2020.

The2020goalplacesNovaScotiainapositionofglobal

leadership.Itmayrequireexpandedgridconnections

withourneighbours,andmayincludeagreatlyexpanded

rolefortidalenergyaswelearnmore.By2020,thisgoal

meansNovaScotiawillhavetheequivalentofmorethan

500,000homesrunningonrenewablepower—more

thanenoughenergyforeveryresidentialcustomerin

theprovince.

The PlanInadditiontoenergyconservationandefficiency

programs,theprovincewillmakeanorderlytransition

tonew,local,renewableenergysources.Thisplanuses

severaldifferentmechanismstoachievethattransition.

ItcreatesaroleforeveryonefromNovaScotiaPower

(whowillcontinuetheirregulatedobligations)andlarge

independentproducers,tocommunityorganizations

andcommittedcitizens.

Larger Projects: Regulation + Competition

Largeandmedium-sizedrenewableelectricityprojects

willbesplitevenlybetweenNovaScotiaPower(NSPI)

andIndependentPowerProducers(IPPs).TheUtility

andReviewBoard(UARB)willevaluateandapprove

NSPI-sponsoredprojectsinthetraditionalway.

Independentproducerswillcompeteforprojectsin

abiddingprocessmanagedbyanewauthority,the

Renewable Electricity Administrator.

Community Projects: Fixed Price

Toencouragearangeofprojectswidelydispersed

throughouttheprovince,thisplanestablishesa

community-basedfeed-intariff(COMFIT)foran

expected100megawattsofrenewableelectricityprojects

connectedtothegridatthedistributionlevel.Theplan

alsointroducesavarietyofprogramstoassistcommunity

groupsinthetechnical,financial,andregulatorywork

neededtodeveloptheseprojects.

Individuals: Enhanced Net Metering

Togiveindividualsandsmallbusinessestheopportunity

toparticipateingreenenergyprojects,theplanexpands

andenhancesthecurrentnetmeteringprogram

availabletoconsumersthroughNSPI.Projectsuptoone

megawatt,andconnectedtomultiplemeterswithina

Renewable Electricity

Plan

3

Executive Summary

Renewable Electricity Plan

singledistributionzone,willbeeligibletousetwo-way

meters,andparticipantswillreceivepaymentatretail

ratesforanyexcesspowertheyproduceoverayear.

Biomass: Proceed with Caution

Governmentwillapproachthedevelopmentofbiomass

forelectricityproductionwithcaution.Electricity

producedfromco-firingbiomasswillplayarolein

meetingthe2015target,butwillundergoreviewfor

post-2015use.Toensuresustainability,pendingrelease

oftheNaturalResourcesStrategy,thisplancapsnew

electricitygenerationfromforestbiomassat500,000dry

tonnes(~600-700GWh)abovecurrentuses.Co-firing

inthermalplantsiscappedat150,000drytonnes

(150GWh).

Tidal: Safe Development

Theprovincewillcontinuetoinvestintidalenergy

researchanddevelopmentinthehopesthatour

uniquetidalresourcecaneventuallymakeasignificant

contributiontoourenergyneeds.Toencouragethis

development,thisplanestablishesacommunity-based

feed-intariff(COMFIT)fordistributionconnected

tidalprojects,aswellasaspecialFITcoveringdirect

incrementalcostsrelatedtodevicedeploymentfor

developmentaltidalarraysconnectedtothegridatthe

transmissionlevel.

Solar: Heat + Water Focus

Solarwillqualifyasarenewableresourceunderthe

enhancednetmeteringprogram.Today,solarisused

moreeconomicallyforairandwaterheatingratherthan

electricitygeneration.Itsrolemayexpandasthecostof

solartechnologychangesinthefuture.

Grid: Cleaner and Stronger

Toincreasethegrid’scapacitytoabsorbintermittent

energyfromwindandtidalsources,theprovincewill

continuetoencouragetheuseoflocally-produced

naturalgas—acleaner,quick-respondingfuelthatisideal

forbalancingintermittentsupplies.Newstudieswilllay

thegroundworkforupgradingourowngrid,andour

modestinterconnectiontotheNorthAmericangrid.

Benefits + Costs

Intheprocessoftransitioningtoasystemthatis

cleaner,morediverse,moredomestic,andmore

secure,thisplanwillsupportasmuchas$1.5billion

ingreeninvestment—creatinggoodjobsandgrowing

theeconomy.Specifically,theplanwillcreatejobsin

construction,supply,manufacturingandmaintenance,

generatinganestimated5,000to7,500person-years

insidetheprovince,withopportunitiesinbothurban

andruralareas.Therearecostsassociatedwithmoving

inthisdirection—especiallyupfront.Addingrenewables

mayaddanaverageofonetotwopercentperyearon

electricitybillsintheshortterm.

ButinthelongrunNovaScotiawillbefarbetter

off.Renewableelectricitypricesdon’tgoupovertimein

thesamewaythatcarbon-basedfuelswill.Controlling

ourownsuppliesofenergygivesussignificantenergy

security.Movingtowardslocalrenewablesourceswill

helpstabilizefuelpricesinthefuture—protecting

consumersfromboththevolatilityoffossilfuelpricing

andthefuturecostsofcarbon.

Thisplantakesabalancedapproachtothe

challengingtaskoftransformingourelectricity

system—adirectioncriticaltotheprovince’seconomic

andenvironmentalfuture—withopportunitiesforall

NovaScotianstoparticipate.


Where We Are Now

A generationago,NovaScotiamadeadeliberate

decisiontoproduceelectricityfromcoal.Theprice

waslowandstable,andthesupplywassecure.Itwas

minedrighthere—soinvestingincoal-firedgeneration

seemedlikeasmartwaytoensurejobsandaffordable

electricityforNovaScotians.

Thatrealityischanging.Risingcostsandincreasing

internationalcompetitionforcedourminestoclose.

Today,thecoalburnedinNovaScotiacomesfromdistant

shores.

Today,almost80percentoftheelectricityconsumed

herecomesfromimportedcoal,petroleum-coke,orfuel

oil.Therestcomesfromnaturalgas—acleaner,locally

producedfuel—andfromrenewablesourceslikehydro,

wind,andtidal.

Everytimeyouturnonalightswitch,moneyflows

fromyourpocketoutofthecountrytoplaceswherethe

coalweburnoriginates.Notonlydoesthisdrainwealth

fromtheprovince,itputsNovaScotiansatthemercyof

politicalturmoilandnaturaldisastersinfarawaylands.

$250.00

$200.00

$150.00

$100.00

$50.00

02003 2004 2005 2006 20082007

Please note that prices are based on blended prices from multiple suppliers dependent on BTU value, world price, sulphur contents, FX rates.

Source: NSPI

mill

ions

of

do

llars

Estimated Cost of Imported Coal Used to Produce Electricity in Nova Scotia

1

Although coal prices fluctuate, the general trend continues to climb upward.

5Renewable Electricity Plan

RelianceonimportedcoalalsoshacklesNovaScotia

totheupwardmarchofinternationalfuelprices,driven

bythedevelopingworld’sinsatiableappetiteforenergy.

Eachtimepricescareenupwardandstarttocomeback

down,theyalwaysseemtosettleataleveljustabithigher

thanwheretheystarted.

Coalisalsoamajorsourceofpollution.Burning

itproducesnitrogenoxides,sulphurdioxide,mercury,

andparticulatesrequiringevermoreexpensiveemission

controlsandcleanermixesoffuelstoprotectpublic

healthandtheenvironment.

Burningcoalandoilgeneratesgreenhousegases

thatcontributetoclimatechange—aproblemwehavea

responsibilitytoaddressasglobalcitizens.

Inshort,NovaScotia’seconomyhasbeenexposed

toinsecureoverseassuppliesofanincreasinglyexpensive,

unhealthy,environmentallyunfriendlyfuel.Weneedto

beginchangingthat,andthisistheplanfordoingso.

TheRenewableElectricityPlanisfocusedon

helpingNovaScotiaaddressthechallengesoftherapidly

changingworldenergyenvironment—andmakinglife

moreaffordableinthelongrun.Itincorporatesthe

strategicdirectionofpreviousenergypolicy,andexpands

onitinanumberofkeyareas.

Thisplanispartofalargerstrategyoncleanenergy

productionandusetobereleasedinthecomingyear.The

strategywillencompassmorethanelectricitygeneration.

Itwillcoverseveralaspectsofenergypolicy,including:

• Allsourcesofrenewableenergy(forelectricity,space

andwaterheating,andtransportation),

• Energyefficiency(includingconservation,efficiency,

andmanagingdemand),

• Locally-produced,cleanerfuels(encompassingnatural

gassuppliesandmarkets),and

• Economicandenvironmentalopportunitiesthat

emergeasNovaScotiamovestoacleaner,moresecure

andsustainableenergyfuture.

AspartofthepreparationforthisRenewable

ElectricityPlan,aconsultingteamfromDalhousie

University,ledbyDr.DavidWheeler,facilitatedextensive

public,multi-disciplinaryconsultationsinthesummer

andfallof2009.Thoseconsultationsconfirmedthat

NovaScotiansarepassionateaboutdevelopingour

renewableenergyresources.Thefinalreport,dubbed

the“WheelerReport”includedrecommendationsfor

implementingrenewableenergyintheshort,medium,

andlong-term(beyond2020).Thisplandrawson

theadviceofDr.Wheeler,aswellasarangeofother

informationsources,tobuildapracticalplanforournear

andmid-termenergyfuture.

Where We Are Now

Coal-firedelectricityneedstobegraduallyreplaced

withfuelsuppliesthatarelocal,cleaner,more

secure,andmoresustainable.Itcan’tbedoneovernight.

Forone,becauseNovaScotia’selectricalutilityhasahuge

investmentinthermalgeneratingstationsthatareonlypart

waythroughtheirusefullife.Butwemustbegintheprocess

ofweaningourselvesoffcoal.Thismeanspracticingenergy

conservationtoforestallgrowthindemandforelectricity,

andbroadeningtheenergysupplybasetoincludea

significantlylargerlocal,renewablecomponent.

Transforming our current electricity mix to one that is more local and green is important to our future energy security.

TheGovernmentofNovaScotiahassetambitious

targetsforgeneratingmoreelectricityfromrenewable

sources,aswellassettingthefirstandonlyhardcapson

greenhousegasemissionsinNorthAmerica,insupport

oftheEnvironmental Goals and Sustainable Prosperity

Act (EGSPA).Theprovinceiswellonitswaytomeeting

thetargetsfor2011and2013establishedunderthe

RenewableEnergyStandard.ThisRenewableElectricity

Planfocusesonwheretogofromthere.

LastJuly,theprovince’snewgovernmentmadea

commitmentthat25percentofourelectricitywouldcome

fromrenewablesourcesby2015.ThisRenewableElectricity

Plandetailsthestepsbywhichwewillmeetthattarget.

Italsoestablishesanevenmoreambitiousgoal

for2020:bythatdate,theplanistohave40percentof

electricityproducedfromrenewablesources.Achieving

thatgoalwillcuttheprovince’scoalconsumptioninhalf

injust10years.

Wemeasuretherateatwhichelectricityis

generatedorusedinwatts.A25-wattbulbuses

25wattsofpower.

Wemeasuretheamountofelectricitygenerated

orusedinwatt-hours.A25wattbulbthatburns

foranhouruses25watt-hoursofelectricity.

Becausethisplanoftendiscusseslargeamounts

ofelectricity,weuseaseriesofprefixestodescribe

verylargeamounts.

1,000 watts = 1 kilowatt (kW),thepowerused

byatypicalhome.

1000 kW = 1 megawatt (MW),thepowerusedby

about1,000homes.

1000 MW = 1 gigawatt (GW),thepowerused

byaboutamillionhomes.

1 gigawatt-hour (GWh) = 1 million kilowatt-hours.

NovaScotiacurrentlygeneratesandconsumes

about12,000GWhofelectricityperyear.

6

Where We Need to Go 2


A Quick Guide to Electricity Units


NovaScotiacurrentlyconsumesjustover12,000GWh

ofelectricityperyear.Thattotalneedstobekeptfrom

growing,orthepercentage-basedtargetsforrenewable

electricitywillbethatmuchhardertoachieve.Energy

conservationandefficiency,therefore,arecriticalnotonly

tokeepingenergybillsundercontrol,butforachieving

renewableenergytargetstoo.Infact,conservationisby

farthesinglebiggeststepthatcanbetaken—eitherasa

societyorasindividuals—tosafeguardourenergyfuture.

Inthefallof2009,theprovincecreatedEfficiency

NovaScotia,anarms-lengthnon-profitcorporation,to

bettermanageuseofelectricity.EfficiencyNovaScotia

willindependentlyoverseetheelectricitydemandside

management(DSM)programnowoperatedbyNova

ScotiaPower(NSPI)andcontractwithgovernment

todeliverprogramsthatwillreducedemandfor

non-electricenergyuse.DSMisanindustrytermfor

programsthatencourageutilitycustomerstouseless

electricity,especiallyattimesofpeakuse,whensupplies

arestrainedandgeneratingcostssoar.

Beyondconservation,theclearestpathtostable,

secure,sustainableelectricitysupplieslieswith

maximizingtheuseofrenewableenergy.

Renewableenergyissustainablebecauseitcomes

fromsourcesthatnaturereplenishes:rivers,tides,wind,

sunshine,plants,andforests.NovaScotiaisblessedwith

abundantsuppliesoftheseresourcestohelpusmeetour

2015commitmentandour2020goal.Wehavesubstantial

windsupplies.Theenergyunleashedeverysixhoursinthe

BayofFundyrepresentsoneofthegreatesttidalresources

ontheplanet.Wehaveaplentifulsourceofbiomass.Solar

technologiesforelectricityareemergingandwilllikelyplay

alargerroleaspricesdecline,andthetechnologyforusing

energyfromthesunforheatingisbecomingestablishedin

NovaScotiaandmaybeevenmorepromisingpost-2015.

Ofthe12,000GWhofelectricitytheprovince

consumeseachyear,onlyabout11percentcomesfrom

renewablesources.Assumingconservationprograms

anddemandmanagementkeepoverallelectricity

consumptionfromrising,another1,700GWhof

renewableelectricity(neworunderconstruction)is

neededby2015tomeetthecommitment.Section4of

thisplandetailsthepoliciesandprogramsgovernment

willusetoachievethat2015commitment.

Thenewgoalof40percentrenewableelectricity

suppliesby2020doesnotyethavetheforceofregulation.

However,itshowsthedirectionandpacegovernment

wantstomaintaininthequestforasecure,sustainable

energysupply.Toachievethatgoal,afurther1800GWh

peryearofrenewableenergyneedstobeharnessedby

2020—tenshortyearsfromnow.Section5ofthisplan

laysoutthepathforreachingthisgoal.

Pre-2001 End 2009 2011 2013 2015 2020

1100GWh/yr 1300GWh/yr 1700GWh/yr 2300GWh/yr 3000GWh/yr 4800GWh/yr

9% 11% 14% 19% 25% 40%

Total Amount of Renewable Electricity Supply

Where We Need to Go

Between 2009 and 2015, Nova Scotia will more than double its renewable electricity supply, growing nearly 8 times faster than the period between 2001 and 2009.

*2011 and future amounts forecast based on 12,000 GWh/yr of total provincial electricity sales.


Underlying Principles 3Severalprinciplesguidedthedevelopmentofthis

RenewableElectricityPlan:

Managing Costs for RatepayersThecurrentelectricitypathleavesNovaScotiadependent

onrisinginternationalcoalandoilprices.Thisplanseeks

tomakelifemoreaffordablebystabilizingelectricityrates

overthemediumandlong-terms.Itestablishesapathto

manageableandpredictableenergybillsforNovaScotia

familiesandbusinesses.

Strengthening Security Through DiversityBasingalmost80percentofourelectricityonimported

coalandoilputsNovaScotiaatthemercyofinternational

marketsoverwhichwehavenoinfluence.Thisplanseeks

toensureamoresecure,stable,reliablesupplyofenergy.

Akeytoachievingthatgoalistodiversifyintomore

localizedenergysources,spreadmorewidelyaround

theprovince.

Building Economic Opportunities in Rural Nova ScotiaByfocusingonrenewableenergysourceslikewindand

tidal,whicharenaturallyabundantinNovaScotia,this

planenhancesopportunitiestocreategoodjobsandgrow

theeconomyineveryregionofNovaScotia.Traditional

ruralindustrieslikeforestryandagriculturecanbuild

wealthandaddjobsbydevelopingthesustainable

renewableenergysourcestheymanagealready.And

capitalizingonNovaScotia’sunparalleledtidalpotential

canbuildanindustryhereathomewithopportunities

aroundtheworld.

Protecting Our Environment and Ensuring Sustainability NovaScotiaistheonlyjurisdictioninNorthAmerica

withabsolutecapsongreenhousegas(GHG)emissions

fromtheelectricitysector.Therearealsoincreasingly

stringentlimitsonharmfulairpollutants.Thisplan

buildsonthatleadershiproleandwillensureacleaner,

moresustainablefuture—keepingtheprovince’s

commitmenttomakelifebetterforallNovaScotians.

Maximizing Community Involvement and Social BenefitsTheplanoffersopportunitiesforeveryone–from

communitygroupstoFirstNations,localnot-for-profit

organizations,businessesandindividualstoactively

participateinthedevelopmentofrenewableenergy

resources.Workingtogether,wecanallshareinthe

benefits.

Holding Ourselves AccountableThisplanestablishessomeofthestrongestrenewable

electricitygoalsinNorthAmerica,andsetsoutapath

formeetingthosegoals.Thisplanisabouttaking

leadership—andensuringthatwelivemorewithinour

ownenergymeans.


Meeting the 2015 Commitment 4Meetingthe2015commitmentfor25%renewable

electricitysupply,willbechallenging,butit

isachievable.Wewillusethefollowingtoolsand

mechanismstogetusthere:

• Large-scale,community-based,andsmall-scale

renewableelectricityprojects

• Changestoelectricityregulation

• Requirementsforbiomass.

Becauselargeprojectsproducethelowest-cost

renewableelectricity,NSPIwillundertakesomeofits

ownlargerenewableenergyprojectssubjecttoapproval

bytheUtilityandReviewBoard(UARB).Independent

powerproducerswillhaveanequalallocationofthese

projects,subjecttocompetitivebids.

Costcontrolisnottheonlyprincipleunderlyingthe

transitiontorenewableenergy.Toensureevenbroader

participation,smallcommunity-basedpowerprojects

willbeeligibleforaFeed-InTariff(FIT).

The FIT guarantees qualified participants a fixed price for the renewable electricity they produce over a fixed period of time. The price typically reflects the cost of generating the electricity, plus a reasonable return for the producer.

Finally,businessesandhomeownerswhoproduce

renewableelectricitywillbeeligibletoparticipateinan

enhancednetmeteringprogram(tentimesthelimitof

thecurrentnetmeteringprogram)thatcreditsthemfor

excesspowertheyfeedintothegridagainstthecostof

anypowertheyconsume.

Inshort,there’saroleandopportunityforeveryone:

homeowners,FirstNations,municipalities,community

groups,farmers,businesses,developers,andNSPI.

Here’showthethreenewmechanismsforbuying

renewableelectricitywillwork.

1. Medium and Large-Scale Projects

Mostofthenewrenewableenergyneededto

meet2015and2020goalswillcomefrom

industrial-scaleprojects.TheRenewableElectricityPlan

callsforaminimumof600GWhofnewmediumto

large-scalerenewableelectricity,producedinequalparts

byNSPIandindependentpowerproducers.

TheUARBwillevaluate,approve,andregulate

projectsproposedbyNSPIinthetraditionalmanner.

Independentproducerswillcompeteforprojects

undertheirallocation.Topromotefairnessandefficiency,

projectswillbesecuredthroughcompetitivebiddingin

responsetorequestsforproposals(RFPs).

Mostofthenewrenewableenergyprojectsnow

underdevelopmentorinoperationresultedfrom

competitiveRFPsissuedin2007.Financingproblems

stalledseveraloftheseprojects,butit’sclearthatsome

ofthetroublesstemmedfromtheworldfinancialcrisis

ratherthanashortcomingoftheRFPmodelitself.

10

Meeting the 2015 Commitment


Usingthetwomethods—UARBregulationand

competitivebidding—inparallelwillhelpdetermine

whichmodelgivesthebestvalueforratepayersforfuture

policydevelopment.

Theprocessfordevelopingthesemediumandlarge

projectswillincludethefollowingfeatures:

• NSPIwillcontinuetofollowthecurrentprocessfor

developingitsshareofrenewableenergyprojects,

seekingapprovalfromtheUARBtorecovercosts

fromratepayers.

• Acompetitivebiddingprocessforindependentpower

producerswillbeopentoallqualifiedproducers

exceptNSPI.

• Anewindependentauthority,theRenewable

ElectricityAdministrator(REA),willmanagethe

competitivebiddingprocessesandselectwinning

projects.(TheroleoftheRenewableElectricity

AdministratorisdescribedmorefullyinSection7

oftheplan.)

• Independentpowerproducerscanformpartnerships

withNSPI,butNSPIcanhavenomorethan49%

ownershiporoperatingauthorityofsuchprojects.

• Governmentretainsthediscretiontocallforbids

forrenewableelectricityprojects,includingspecific

technologiessuchastidal.

• Thebiddingprocessforrenewableelectricityprojects

involvingforestproductsmustensurethatthe

managementanduseoftheresourceconformsto

sustainabilitystandardsandregulations.

2. Community-Based Feed-In Tariff

Small-scaleproducerstypicallycannotcompete

successfullyagainstmuchlargerdevelopersina

competitivebiddingprocess.Morethan45jurisdictions

aroundtheworld,includingSpain,Germany,Ontario,and

Vermont,haveestablishedfeed-intariffs(FITs)thatsupport

andencouragesmall-scaleandcommunityownership.

Theseprogramsletnewcomersparticipateintherenewable

electricityindustry,andencouragethedevelopmentof

multipleprojectsoverwidely-dispersedruralareas.

ThisplanintroducesaCommunity-BasedFeed-

InTariff(COMFIT)toencouragethedevelopmentof

localrenewableenergyprojectsbymunicipalities,First

Nations,co-operatives,andnon-profitgroups.Most

communitiesarenotdirectlytransmissionconnected,

butareservedthroughlocaldistributionsubstations

thataredesignedtoaccommodatetheelectricityneeds

ofthespecificcommunity.Projectswillbeconnectedto

thegridatthedistributionlevel.Duetodistributionlevel

capacity,projectswilltypicallybelessthan2MW,but

potentiallyupto5or6MWdependingonlocation.The

sizeoftheprojectsthataredistribution-connectedwill

requiretechnicalstudyonacasebycasebasis,andwillbe

limitedbyareaoperatingconstraints.

Thisapproachmanagescostsandgivesusexperience

withtheintroductionofintermittentpowersourcesat

thedistributionlevel.Renewableelectricityfromlarge-

scalecommercialprojectswillcontinuetobeprocured

throughthecompetitivebiddingprocess,becausethis

offersthebestvalueforratepayers.Atthistime,aFIT

forlarge-scaleprojectswouldlikelyhaveasignificant

impactonelectricityrates.Governmentwillreview,and

ifappropriateadjust,theCOMFITprogramin2012,to

ensurethatwelearnfromourexperienceandensurethat

theobjectiveofsupplying100MWthroughcommunity/

small-scalerenewableelectricityprojectsismet.

11



Governmentisproceedinginthismannerbecause

NovaScotia’selectricitysystemdoesn’treadilylenditself

tointermittentenergyconnectedatthedistributionlevel.

Thechallengesaresimilartothoseinvolvedinplanninga

highwaysystem.Thetransmissionsystemfunctionslike

amajor100-serieshighway,whilethedistributionsystem

operatesmorelikeanetworkofsmall,localroads.Just

asasuddeninfluxofunexpectedtrafficontolocalroads

canproducegridlock,theintroductionofintermittent

electricityatmanydifferentpointsaroundtheprovince

couldoverwhelmthedistributionsystem.Anychanges

intheoverallsystemrequirecarefulplanning,justlike

changestoroadsandhighways.

NovaScotia’sCOMFITwillincludethe

followingfeatures:

• Municipalities,FirstNations,co-operatives,local

non-profits,aswellassmallbusinessesoperating

throughCommunityEconomicDevelopment

InvestmentFunds(CEDIFs),willbeeligibletoreceive

theCOMFIT.

• Thepurposeoflimitingaccesstocommunity-based

participantsistoensurethatprojectsarerootedin

thecommunityandinvestmentreturnsremainthere.

Regulationswillestablishtheprecisedefinitionof

communityfollowingconsultation.

• Electricityproducedfromwind,biomass,tidal,wave,

in-streamhydroaswellascombinedheatandpower

projectswillbeeligibleforCOMFITratesthatreflect

basiccost-recovery,includingthecostofcapital.

• COMFIT-eligibleprojectswillconnecttothegrid

atthedistributionlevel(i.e.belowasubstation).

(Note:seetidalsection,p.18,regardingaspecialFIT

fortidalarraysatthetransmissionlevel.)

• TheUARBwillsettheCOMFITrateaccordingto

government-setcriteria.

• In2012,governmentwillreviewtheprogramand,if

appropriate,adjusttheCOMFITprogramtoensure

thatwelearnfromourexperienceandensurethat

theobjectiveofsupportingcommunity/small-scale

renewableelectricityprojectsismet.

Thecommunity-basedFITwillincrease

geographicaldistributionofrenewableelectricitysources,

therebycontributingtoourenergydiversityandsecurity.

Itshouldalsopromotegreaterpublicunderstandingand

acceptanceofrenewableresources.Anditwillprovide

ruraleconomicactivityassociatedwiththeconstruction

andoperationofrenewableenergyprojects—helping

creategoodjobsandgrowtheeconomy.

(Section 7 contains more detail on tools to support

community-based renewable energy projects.)

12



3. Enhanced Net Metering

Netmeteringisaprogramthatletsaconsumer

connectasmallrenewableelectricitysourcetothe

gridthroughaspecialmeterthatmeasureselectricity

flowsintwodirections.Foranyelectricityfedintothe

grid,theconsumergetsacredittooffsetthecostof

electricitydrawnfromthegrid.Thismechanismhelps

homeownersandbusinessesoffsetthecostoftheir

commitmenttosustainability.

NSPI’scurrentnetmeteringprogramwillbe

enhancedunderthisplan.Intheexistingprogram,the

amountofpowergeneratedcannotexceed100kW.

Projectsarelimitedtoasinglemeter.Thereisno

paymentforanyoverallsurplusfedintothegrid,only

acredituptothevalueofpowerconsumed.Thenew,

enhancedprogramintroducedbythisplaneasesthose

restrictions.Itwill:

• Beavailabletoeveryone

• Coverallrenewableresources

• Increasepowerlimitsfrom100kWto1MW

• Letcustomerssupplyelectricitytomultiplemeters

underoneaccountwithinasingledistributionzone

uptoanoveralllimitof1MW,and

• Providepaymenttocustomersattheirretailclassrate

foranyoverallsurpluselectricityproducedonan

annualbasis.

NSPIwillworkwiththeDepartmentofEnergyto

createanewon-lineenhancednetmeteringguideand

applicationformtomaketheprocesseasier.

4. Forest Products Associated Biomass

Governmentwillapproachthedevelopmentof

biomassforelectricityproductionwithcaution.

Electricityproducedfromco-firingbiomasswillplaya

roleinmeetingthe2015commitment,butwillundergo

reviewforpost-2015use.

Forestharvestingpracticesareacontentiousissue

inNovaScotia,subjecttowidedebate.Governmentis

currentlydevelopingaNaturalResourcesStrategy1that

willlikelyrecommendenhancedornewguidelinesand

regulationsforallusesofbiomass.Long-termplanning

forgeneratingelectricityfromforestbiomasswillhaveto

awaitthatstrategy.Prudentinterimdecisionsarepossible

nowhowever.

Althoughforestbiomassisaplentifulresource

here,usingwoodsolelyforthepurposeofgenerating

electricitythroughco-firingisinefficient.Farmore

energyisextractedfrombiomassusedtoheatwateror

livingspaces.Along-termstrategyforcleanerenergy

supplieswillrecognizewood’sgreatervalueasaheat

source,orasacombinedsourceofheatandelectricity.

However,usingbiomasstogenerateelectricityinthe

shortandmedium-termcanhelpdevelopthesupply

chainthatwilleventuallyservethesemoreefficientand

valuableuses.

1TheDepartmentofNaturalResourcescommissionedapanel

chairedbyformerChiefJusticeConstanceGlubetoprepareareport

andrecommendationsthatisfocusedonfourelements—forests,parks,

minerals,andbiodiversity—thatwillinformthedevelopmentofa

NaturalResourcesStrategy.Itwilllikelyrecommendenhancedornew

rules,regulations,andguidelinesfortheharvestingofwood.The

strategywillalsoconsidertheuseofbiomassforenergy.

13



Managedandregulatedresponsibly,forestbiomass

harvestingissustainable,andcancontributetothe

province’sshort-termrenewableelectricitytargets.

BiomassuseinNovaScotiaisalreadyareality,

includingfirewoodinover100,000homes,a22MW

biomasselectricalco-generationfacilityinBrooklyn,

asawmillproducingheatandpower,pulpandpaper

plants,twopelletmanufacturingplants,numerous

greenhouseoperations,sawmilllumberdryingkilns

andwood-relatedindustriesthatpowertheirfacilities

withproductionwaste.Institutionalusersincludethe

NovaScotiaAgriculturalCollegeandSouthShoreand

AnnapolisValleyRegionalHospitals.

Fieldinventoriesandsupplymodelsconstructed

bytheDepartmentofNaturalResourcesfoundthat

750,000drytonnesofnewforestbiomasscouldbe

sustainablyharvestedandusedtogenerateelectricityfor

the2015commitment.Dr.DavidWheeler’sstakeholder

advisoryprocessarrivedatacomparable,ifslightlylarger,

number.However,thenumbercouldbereducedifthe

forthcomingNaturalResourcesStrategyintroduces

changestocurrentharvestmanagementpractices.

Assessmentoftheimmediatedemandforforest

biomassgenerationsuggeststhatanamountbelow

750,000drytonnescouldbeprudentlyadopted.Theuse

offorestbiomassforelectricityproductionhelpsdiversify

ourelectricitysupply,makescost-effectiveuseofexisting

infrastructure,andhelpssupporttheforestsector.But

inthelongerterm,forestbiomassiscertaintofindmore

valuableusesthanasasimplesubstituteforcoalinNova

Scotiathermalpowerplants(whereheatenergymay

belost).Therefore,theplanimplementsthefollowing

interimrequirementsandplansforbiomass,pending

releaseoftheNaturalResourcesStrategy:

• Toensuresustainability,pendingreleaseofthe

NaturalResourcesStrategy,thisplancapsnew

generationfromforestbiomassataconservative

500,000drytonnes(600-700GWh)abovecurrentuses

forelectricitygeneration.Thiscapwillaccommodate

foreseeablebiomassprojects,includingmodest

amountsofco-firinginNSPIthermalplants,projects

developedbyforestproductscompanies,andalimited

amountofcommunityforestbiomassgeneration.

• Co-firinginthermalplantswillbecappedat150,000

drytonnes(150GWh)andwillcounttowardthe

renewableenergyneedsfor2015.However,co-firing

willbeconsideredabalancingfuelsourcethathelps

NSPImaintaincompliance.Projectsapprovedunder

theCOMFITwilltakeprecedence,andifthereisno

roomunderthecap,co-firingwillyield.

• Operatingapprovalsforthermalpowerstations

co-firedwithbiomasswillneedtoberevisedto

controlemissions.

• Theprovincewillalsoreviewtheuseofbiomassfor

co-firingoncetheNaturalResourcesStrategyisreleased.

After2015,governmentwillassessthecontinued

applicabilityofco-firingtomeetthe2020goal.

• Inordertoqualifyasrenewableenergy,forestbiomass

mustbeharvestedusingsustainablepractices,in

amannerconsistentwithlicenserequirements

forCrownLandestablishedforNewPagePort

Hawkesbury.

(See following page for Forest Biomass used for

Renewable Electricity Procurement Requirements.)

• Otherbio-energyresources,suchasagricultural

biomass,mayhavepotentialforelectricitygeneration

andheating,butfurtheranalysisisneededto

determinewhethertheycanplayasustainablerole.

AsoutlinedintheClimateChangeActionPlan,

governmentwilldevelopabio-resourcesstrategy

in2011todeterminethebestpotentialusesfor

bio-energybasedfuelsandthebestpoliciesto

encouragetheiruse.Thestrategywilltakeintoaccount

greenhousegasesandotherairemissionsproduced

throughthelifecycleofvariousbio-fuels.

• Large-scalebiomassprojectsestablishedby,or

connectedwith,existingforestproductsmanufacturers

maybeoperatedbytheforestproductscompany,an

independentnon-utilitypartner,orbyNSPI.

• NSPImaycallforbidsonlarge-scalebiomassprojects

andtheRenewableElectricityAdministratorwill

evaluatethemeritsofthebidsandselectthewinning

bidder.

Forest biomass used to generate renewable energy must comply with the following requirements:1.Vendor(i.e.thepowerproducer)mustmakemaximumuseofwoodwastesavailablefromother

manufacturingprocesses.

2.Totalregionalharvestmaynotexceedprovince’sestimateofthesustainableharvest.

3.Vendormustmaintain/obtainForestStewardshipCouncil’sMaritimeStandardforestcertificationonlands

theyownorcontrol.

4.VendorshallhelpandencourageprivatewoodlotownersinitssupplyareatoobtainFSCcertification.

5.VendormustbearegisteredbuyerundertheForests Act.

6.Allfuelfromforestharvestingandsilviculturemustcomeonlyfromstemboles.Vendorsshallnotharvestor

acquirefuelfromcoarseorfinewoodydebris,treecrowns,tops,orstumpsfromforestryoperations.Vendors

mayusefuelmadefromothertreepartsonlyifitoriginatesinanon-forestryoperation,suchasagricultural

landclearing,highwayrightofwayclearing,orcommercialorresidentialconstruction.

7.Forestbiomassusedasfuelmustcomefromlowqualitylogs.Vendorsmustapplythebestutilizationpractices

toensurediversionofhigherqualitystemstoproductionofothermanufacturedwoodproducts.

8.VendorsmustseekNovaScotiabuyersabletousebetterqualitylogsandpulpwood.

9.TheprovinceencouragesvendorstoseekopportunitiesformembersofFirstNationscommunitiesinNova

Scotiatoparticipateinthesenewactivitiesinamutuallyacceptablemanner.

Forest Biomass Used for Renewable Electricity Procurement Requirements



5. Market Structure and Governance

NovaScotia’selectricitymarketconsistsofa

verticallyintegratedutility—NSPI—andsixsmaller

municipalelectricutilities.Asanintegratedutility,NSPI

hasresponsibilityforelectricityprocurement,system

operation,gridaccess,maintenanceofthetransmission

anddistributionsystems,andmeetingitsrenewable

energytargets.

TheRenewableElectricityPlanrecognizesthe

cost-effectivenessofhavinganintegratedutility,aswell

astheneedforacentralbodythatcontinuestohavethe

followingresponsibilities:

• AmandatetoserveNovaScotians

• Systemplanningandoperations,including

schedulingofmedium-andlarge-scalerenewable

electricitysupplies

• AccountabilityformeetingoverallRenewableEnergy

Standard(RES)targets

• Systemreliabilityandcompliancewithinternational

standards,includingoversightoftechnicalcompliance

forthetransmissionanddistributionsystems.

However,thisplanintroducesseveralchangestothe

wayNSPIbuysrenewableelectricity,asdetailedinthe

sectionsabove.Theresultwillbeasystemofrenewable

energydevelopmentthatensuresNovaScotiansbenefit

fromastableandreliablesupplyofcleanelectricity.

Changesestablishedbythisplanaremeantto

encourageproductionofrenewableenergyfromvaried

sourcesatlocationswidelydistributedacrosstheprovince.

Thiswillprovidegreaterenergysecurityanddiversity.

Thedetailscanbeadjustedasexperiencewithrenewable

technologyincreases,andastechnologiesbecomemore

affordable.Insomecases,aslightlyhigheramountwillbe

paidforrenewableenergysupplies.Butthiswillactasa

hedgeagainstthecertaintyofmuchhighercoalprices

andmuchhigherenvironmentalcompliancecostsinthe

yearstocome—ultimatelymakinglifemoreaffordablefor

NovaScotians.



Achieving the 2020 Goal 5The25percentcommitmentestablishedfor2015will

havetheforceoflaw,withpenaltiesforanyfailureto

meetit.The40percenttargetfor2020isagoalweaspire

to.Itdoesnotyethavetheforceoflaw,butitrepresents

government’sconsideredjudgmentaboutwherewe

shouldbebythatdate.Rapidtransitiontorenewable

energysourcesandcleanerlocalfuelsrepresentsabig

undertakingforallparticipantsinourenergyeconomy.

Weexpecttolearnaswegoalong,andthecurrent

approachmaybeadjustedasyoungtechnologies

matureandnewtechnologiesemerge.Nooneshould

underestimategovernment’sdeterminationtosecurea

stable,sustainable,cleaner,andmoresecureenergyfuture

forNovaScotia.

Meetingtherenewableelectricitygoalsfor2020will

requiredevelopmentofourmostabundantrenewable

energyresources,windandtidal,andacomplementary

expansioninuseofourlocal,cleanerfuelalternative,

naturalgas.

The Renewable Resource Mix After 2015

W indwillbethemainstayofoureffortstoreach

the2015renewableenergycommitment,with

supportfromlimitedamountsofbiomass.Naturalgas

willservemainlytobalancewindpower,andtohelp

ensurecompliancewithgreenhousegasregulationsand

emissionstandards.

Beyond2015,theprovincewillconsiderseveral

optionstoachievea40%renewableelectricitysupply

by2020:

• Moreintermittentrenewableenergysources,suchas

windandtidal,backedbynaturalgas

• Morestablerenewableenergysourcessuchasbiomass

• Morecleanenergyimportedfromneighbouring

provinces.

Itseemslikelythatthelargestportionofnew

renewableenergyin2020willcomefromwind,withthe

restcomingfrombiomassandtidal,balancedbyeither

naturalgasorcleanimports.Therearemanypossible

combinations,buteachonerepresentsasignificantmove

awayfromwherewearetoday.


Other Fossil* 75.3%

Natural Gas 13.3%

Renewables** 11.3%

Achieving the 2020 Goal

Energy Mix 2001

Potential Energy Mix 2015

Energy Mix 2009

Possible Energy Mix 2020: No Hydro Imports

Other Fossil* 82%

Other Fossil* 60%

Other Fossil* 40%

Natural Gas 10%

Renewables** 8%

Natural Gas 15%

Renewables** 25%

Natural Gas 20%

Renewables** 40%

Potential Energy Mix 2020


Past

Future

In the first decade, fossil fuels dominate but cleaner-burning natural gas begins to play a larger role.

Coal and oil give way to increasing amounts of renewables (domestic and/or imported) and natural gas.

* includes coal, pet coke, oil, diesel, non-renewable imports

** includes hydro, wind, biomass, tidal







18



The Role of Tidal Energy

ThesleepinggiantamongstNovaScotia’srenewable

energysourcesistidalpower.Lookup“tide”on

Wikipedia,andyou’llfindapictureoftheBayofFundy.

Twiceeachday,115billiontonnesofwatersurgein

andoutoftheBay.Thedailytotalexceedsallthewater

flowingdownalltheriversintheworld.

TheUS-basedElectricPowerResearchInstitute

(EPRI)estimatesthatunderwaterturbinescould

safelyextract300megawatts(MW)ofenergyfromthe

MinasChannelalone.Someestimatesplacethetotal

extractableenergypotentialoftheBayofFundyashigh

as2,000MW.

Butthesearestillearlydays.Manytechnicaland

economicchallengesliealongthepathtosuchan

achievement.In-streamtidaltechnologiesareintheir

infancy.TurbinesoperatingintheBayofFundymust

withstandcurrentsmovingatspeedsupto5metresper

second,ornearly10knots.Thecostofinstallingthem

remainshigh.Manyoperationalandenvironmental

issuesmustbesettledbeforecommercialdevelopment

canoccur.

However,thefactthattidaltechnologyisjust

emergingandcostsmaydropsignificantly,combined

withNovaScotia’suniquetidalresourceandtheresearch

alreadyunderwayhere,givestheprovinceachanceto

leadthedevelopmentofwhatcouldsomedaybeamajor

world-wideenergyindustry.

Governmenthassupportedtidalenergythrough

FORCE(FundyOceanResearchCentreforEnergy),a

non-profittestcentrethatencouragespublicandprivate

researchontidalenergy.TheRenewableElectricityPlan

expandsthatsupportwiththefollowingcommitments:

• AMarineRenewableEnergyTaskForce:

Aninterdepartmentaltaskforcewillbeestablished,

assistedbytheprivatesector,todevelopstrategies

forcommercializingmarinerenewableenergy(tidal,

offshorewind,andwaveresources),andthehuman

resourcesneededtosupportthem.

• ATidalFeed-InTariff:

Tidaldevicesarestillinthedemonstrationphase.

Theelectricitytheyproducecostsmorethanelectricity

frommaturerenewablesources.Tosupporttidal

development,theprovincewillsetacommunity-

basedfeed-intariff(COMFIT)fordistribution

connectedtidalprojects.Inaddition—giventhat

researchcurrentlyunderwayprovestidaltobeboth

safeandfeasible—theprovincewillauthorizeaspecial

FITfordevelopmentaltidalarraysconnectedatthe

transmissionlevelthatreflectsthecostoftheturbines

andtheirdeployment.

19



• IdentifyingPotentialTidalSites:

In2005,theElectricPowerResearchInstitute(EPRI)

identifiedeightsitesinNovaScotiawithtidalcurrent

velocitiesaveragingatleast1.5meters/second:

CumberlandBasin,MinasChannel,MinasPassage,

CobequidBay,DigbyGut,PetitPassage,Grand

Passage,andGreatBrasd’OrChannel.Thesesites

havepotentialfortidalpowerdevelopment.There

areprobablymanyotherplacesintheprovincewith

potentialforsmall-scaletidalprojects.Aspartofthis

plan,theprovincewillidentifyandassessadditional

sitesthathavepotentialfortheseprojects.

Inresponsetothe2008BayofFundyStrategic

EnvironmentalAssessment,theprovincecommitted

todevelopmarinerenewableenergylegislation.This

legislationwillensurethatmarinerenewableenergy

projectshaveappropriatelicensingprocedures,

environmentalprotection,workerandpublicsafety,and

resourceconservation,builtaroundrecognitionforother

usersanduses.Consultationonthemarinerenewable

legislationwilltakeplaceoverspringandsummer2010

withtheexpectationoftablingnewlegislationinthe

legislatureforthefallsitting.

The Role of Natural Gas

A keyobstacletothedevelopmentofrenewable

energyisthefactthatourbestrenewable

sources—windandtidal—arebytheirnature

intermittent.Becausetheydependonnaturalforces

thatcomeandgo,intermittentsourcescannotprovide

aconstantstreamofelectricity.Inutilityjargon,they

arenotdispatchable.Theycannotbeturnedon(oroff)

wheneverthepowergridoperatorneedsthem.Inorder

forthemtoplaymorethanaminorroleinourelectrical

system,intermittentsuppliesneedtobebalancedwith

other,fast-respondingenergysources—preferablyones

thatarealsocleanandlocal.

Naturalgasfitsthebillnicely.Althoughitisafossil

fuel,naturalgasburnsfarcleanerthancoaloroil.It

releaseslesscarbon,muchlesssulphurdioxide,fewer

nitrogenoxides,andvirtuallynoashorparticulate

matter.Unlikecoalfiredplants,gasturbinescanstart

upandshutdownquicklytomatchchangesinthewind

andtides.NovaScotiahassubstantialdepositsofnatural

gasbothoffshoreandonshore;itsusealsobenefitsour

economy.

Naturalgaswillplayalargerroleinourelectricity

generationaswemoveawayfromcoal.Thegovernment

willoutlineitsplansfornaturalgasdevelopmentasone

partofthestrategyoncleanenergyproductiontobe

releasedinthecomingyear.

20

New Roles and Responsibilities


TheRenewableElectricityPlanintroducessome

significantchangestotherolesandresponsibilities

ofkeyplayersinourelectricitysystem.

Renewable Electricity Administrator (REA)Thebiggestchangeistheappointmentofanindependent

administrator.GovernmentwillappointtheRenewable

ElectricityAdministrator(REA)ontherecommendation

oftheMinisterofEnergyafterconsultationwith

interestedparties.TheREAwillconductcompetitions

forrenewableelectricityprojects.NSPIwillretain

responsibilityforelectricityplanning,butwillnolonger

takeadirectroleincompetitions.Instead,whenanew

mediumorlarge-scalerenewableelectricityproject

isneeded,NSPIwillrequestissuanceofanRFP.The

REAwilloverseethecompetition,evaluatethebids,

anddeterminethewinner.Governmenthasmadethis

changetoensurethattheelectricitysystemisfairand

transparent.TheREAwillalsoensurethatsuccessful

biddersareaccountablefordeliveringprojectstoward

theachievementofprovincialtargets.

Nova Scotia Power Inc. (NSPI)NSPIwillcontinuetofunctionasanintegratedutility

withanobligationtoserve,legalresponsibilitytomeet

renewableenergytargets,responsibilityforsystem

reliabilitycompliance,andauthorityoverprojects

connectingtotheelectricalgrid.Inasituationwhere

NSPIneedstosecureadditionalrenewableelectricity,the

companywillhavetheabilitytomakeequityinvestments

orpurchaseimportedrenewableenergyasrequired,and

atthelowestpossiblecosttocustomers.

Utility and Review Board (UARB)TheUARBalreadyhasresponsibilityforapproving

costrecoveryforrenewableenergyprojectsthrough

thesettingofelectricityrates.UndertheRenewable

ElectricityPlan,itwilltakeonresponsibilityforsetting

andperiodicallyreviewingFITrates,basedoncriteria

establishedbygovernment.

Province of Nova ScotiaTheProvincewillcontinuetoleadthedevelopment

ofrenewableenergypolicy.Itwillconsidercriteriafor

settingFITratesandtherulesforawardingFITcontracts

andcompetitivemediumandlarge-scaleprojects.Under

aone-windowcommittee,theProvincewillcoordinate

thevariousapprovalsandpermitsadevelopermayneed

underprovincialandfederallegislation(seeSection7for

moredetailonone-windowcommittee).TheProvince

willalsoprovidetechnical,planning,andfinancial

adviceandtrainingtofacilitaterenewableenergy

projects,especiallyforcommunity-basedparticipants

andnon-profitgroupssupportingcommunityenergy

development.

6

21

The Role of Government 7


TheGovernmentofNovaScotiarecognizesthatit

hasalargeroletoplayintransformingNovaScotia’s

electricitysectortoonethatissecureandsustainable.

Governmentwillprovideguidanceinprojectdevelopment,

approvalsandpermitting,andaccesstofinancing.

Facilitation WeexpecttheCommunity-BasedFeed-inTariff

(COMFIT)toattractparticipantswhoneedsupport

developingrenewableenergyprojects.Asustainableenergy

planninggroupwillbeestablishedbygovernmenttohelp

developcommunity-basedprojects.Theplanninggroupwill

co-ordinateandsupporttheeffortsofvariousdepartments,

regionaldevelopmentauthorities,municipalities,regional

sustainabilityoffices,andnon-governmentalorganizations.

Thegroupwillassistwithbusinessplans,technicalfeasibility

studies,grantapplications,publicoutreach,regulatory

approvals,andfinancingguidance.

FinancingRenewableenergyprojectsusuallyrequirealargeinfusion

ofupfrontcapital,withtheexpectationoflong-term,stable

returns.ManyoftheorganizationseligibleforCOMFITs

lackexperienceacquiringthiskindoffinancing.The

provincewillworkwithotherorganizationstodevelop

financingtoolstosupportcommunity-basedrenewable

energyprojects.CommunityEconomicDevelopment

InvestmentFunds(CEDIFs)maybeonesuchtool.

Coordinating ApprovalsRenewableenergyprojects,whetherlargeorsmall,

requirepermitsandapprovalsfromvariousgovernment

departmentsandNSPI.Asingleentrypointwillassist

citizensanddevelopers.Governmenthassuccessfully

usedaone-windowsteeringcommitteetomanagethe

responsibilitiesofseveraldepartmentsinvolvedintidal

energydevelopment.AspartoftheRenewableElectricity

Plan,governmentwillimplementasingle,publicportal

tohelpdevelopersofotherrenewableenergyprojects,

startingwithapprovalsandpermits.

Emissions ManagementSomerenewablefuels,suchasbiomass,releaseair

pollutantswhenburned.Governmentwilldeterminethe

stepsneededtoensurethatrenewableenergycontributes

toimprovedairquality.Biomasscomeswithitsownsuite

ofemissions.Biomassburnedinthermalelectricityplants

caninteractwithpollutioncontrolequipmentdesignedfor

coal.Governmentwillconductananalysistodetermine

whetheroperatingapprovalsmustbeamendedtoreflect

thecharacteristicsofbiomassco-firing.

Local GovernmentMunicipalgovernmentswillbeonthefrontlinesofthe

transformationtorenewableelectricity.Manyrenewable

energyprojectswillbesubjecttomunicipalregulatory

authority.Forexample,theMunicipal Government Act

givesmunicipalitiesauthoritytosetminimumdistances

betweenwindturbinesandresidentialbuildings,

businesses,andpublicbuildings.Theprovinceandthe

UnionofNovaScotiaMunicipalitieshaveworkedtogether

todevelopmodelwindturbinebylaws.Theprovince

willcontinuetoworkwithmunicipalitiestoensurethat

renewableenergyprojectsdonotnegativelyimpactthe

public,andmunicipalbylawsdonotpresentunnecessary

barrierstocleanerenergydevelopment.

22

The Role of Government


Federal GovernmentInsomecases,theprovincialandfederalgovernments

haveoverlappingregulatoryauthorityinrenewableenergy

development.Thiscropsupmostofteninrenewableenergy

projectsinthemarineenvironment—thoseinvolvingtidal,

wave,andoffshorewindenergy.Theprovincewillcontinue

toworkwithfederalauthoritiestoensuretimelypermitting

thatprotectsthepublicinterest.

First NationsTheMi’kmaqhaveexpressedinterestincollaborating

onthedevelopmentofNovaScotia’srenewableenergy

sector.Continuingtobuildapositiverelationshipwiththe

Mi’kmaqisakeypriorityfortheprovince.NovaScotia

consultswiththeMi’kmaqonallenergyprojectsthrough

theMi’kmaq-NovaScotia-CanadaConsultationTermsof

Reference.Allthetoolsthisplanprovides—enhancednet

metering,theCOMFIT,thetidalarrayFITandcompetitive

bidding—areavailabletotheMi’kmaq.Inaddition,the

provincehascommittedtoencouragingdevelopersto

engagedirectlywiththeMi’kmaqattheearlystagesof

projectdevelopment.

Legislation and RegulationsMeasureslikethecreationoftheRenewableElectricity

Administratorandtheimplementationoffeed-intariffs

requirenewlegislationoramendmentstoexistinglaws.

• AmendmentstotheElectricity ActwillgivetheUARB

authoritytosetratesforFeed-InTariffs,basedon

governmentpoliciesandobjectives.TheUARBwill

continuetooverseeandregulateNSPI’scostsandrates.

• OtherchangestotheElectricity Actwilldelegateauthority

formanagingcompetitivebidstothenewRenewable

ElectricityAdministrator.Governmentwillretainthe

authoritytorequirereportingandaudits.

NSPIwillcontinuetomanagetechnicalcomplianceand

commercialrelationshipswithsuppliers.

• ChangestotheRenewable Energy Standard Regulations

(toberenamedtheRenewable Electricity Standard

Regulations)willentrenchthe2015commitmentasa

legislatedtarget,anddetailaccountabilitymeasuresto

ensurethatitismetorexceeded.

• Afteranalyzingpolicyoptions,newpoliciesorother

toolsmayneedtobecreatedtoensureairemissionsfrom

biomass-derivedenergyareproperlycontrolled.

• UponpublicationoftheNaturalResourcesStrategy,

andtheestablishmentofaplanforbiomassenergy,

theprovincemaychangerequirementsforsustainable

harvesting.

Supply Chain DevelopmentManyNovaScotiasuppliersandservicecompanieshave

transferredskillsfromotherindustriestorenewableenergy.

NovaScotiahasthelargestconcentrationofcompanies

specializinginoceantechnologiesofanyprovincein

Canada.Ouroffshoreoilandgas,aquaculture,fishing,and

nationaldefenseindustrieshavecreatedaclusterofmore

than300firmswithspecificexpertiseinoceanmapping,

marineengineering,sub-seafabricationandinstallation,

remotemonitoring,andsafetyandsurvivaltrainingin

offshoreenvironments.

NovaScotia’semergingrenewableenergysector,

especiallyintheareasoftidalpowerandwindenergy,will

createopportunitiesforlocalcompaniestoprovidenew

goodsandservices.Potentialbusinessopportunitiesinclude

assessmentandpermitting,civilconstructionandsite

preparation,manufacturingandfabrication,installation,

testing,commissioning,inspection,andmaintenance.

Theprovincerecentlyawardedacontracttoidentify

andquantifyrenewableenergyopportunitiesforfabricators

andsuppliers,withresultsexpectedlaterthisspring.


Electricity Transmission and Distribution in Nova ScotiaAddingmorerenewableelectricitytothetransmission

anddistributionsystemsrequirescarefulplanningto

maintainsystemreliability.Thisisparticularlytrue

becausemostofthenewrenewablesourcesavailable

tousproducepowerintermittently.Meetingthe2013

RenewableEnergyStandardmayrequireadditional

loadmanagementtechniquesandmodestinvestmentin

transmissioninfrastructure.Movingbeyondthe2013

standardwillrequirelargertransmissioninvestmentsin

NovaScotia’selectricalgrid.Newlineswillbeneeded

toserveremotelocations,increasedcapacitytodeliver

newrenewableelectricitygenerationandasystemthat

candealwiththeintermittentnatureofmuchofour

renewableenergy.

Furtheranalysiswilldeterminewhetherthere

arestrategicopportunitiesinpartsoftheprovince

toexpandthetransmissionsystem.Thiscouldcreate

opportunitiesformorerenewableenergydevelopment

inruralNovaScotia.Anupgradedtransmissionsystem

couldalsomaximizeopportunitiesforlarge-scalewind

projects.NSPIwillcarryoutthisanalysisunderreliability

compliancestandardssetbytheNorthAmerican

ElectricReliabilityCorporationandtheFederalEnergy

RegulatoryCommission.Theanalysiswillbeopenfor

commentandfeedbackfromstakeholders.

The Role of Imports and ExportsNovaScotiadoesnothaveabundantsuppliesof

untappedhydropower,butnearbyprovincesdo.One

waytoincreasetherenewableportionofourenergy

supplywouldbetoimportcleanelectricityfrom

NewfoundlandandLabrador,NewBrunswick,or

Quebec.Whilenotquitelocal,suchimportswouldbe

farcleanerandmoresecurethanthecoalandoilwe

currentlyuse.

Althoughonlyenoughrenewableelectricityis

currentlyproducedtomeetNovaScotia’sneeds,there

maybepotentialtoexportelectricityinthefuture.

ElectricitydemandinNovaScotiaishighlyseasonal.

Inlatesummer,demanddropsaslowas850MW

(comparedtoapeakof2,300MWinwinter).Without

theabilitytoexportexcesspowerinperiodsofslacklocal

demand,asignificantamountofrenewableenergymay

bewasted.Asproductionofrenewableelectricitygrows,

theneedforaninterconnectedregionaltransmission

systemtobalancethesupplyanddemandwillbecome

moreurgent.

Unfortunately,atthemoment,NovaScotiaisalmost

anislandintermsofelectricity.Asingle345kilovolt

transmissionline,plustwomuchsmallerlines,connect

NovaScotiawiththeNorthAmericanelectricalgrid.

That’senoughtoensuresystemreliabilityattimesof

highdemand,butwellshortofwhatwouldbeneeded

toimportamajorpartofNovaScotia’selectricityneeds.

Bycontrast,NewBrunswickhasaboutfivetimesthat

capacityinitsinterconnectionswithNewEnglandand

centralCanada.Inthefuture,itwillbenecessaryto

expandourinterconnectionwithNewBrunswick.

Building a Secure, Reliable Network 8

24

Building a Secure, Reliable Network


ArecentstudybySNCLavalinconcludedthat

enhancingNovaScotia’stransmissiongrid,andadding

asecondinterconnectionwithNewBrunswick,would

greatlyimproveNovaScotia’sopportunitiestoimport

andexportrenewableenergy.Itcouldalsohelpsolve

theproblemofhowtobackupintermittentenergy

sourceslikewindandtidalpower.Expandingour

interconnectionwithNewBrunswickwouldrequire

expensiveupgradesonbothsidesoftheborder.Recent

loadgrowthintheMonctonareahasfurtherconstrained

NovaScotia’sinterconnectionwithNewBrunswick

duringsystempeaks.

TheSNCLavalinstudyidentifiedapotential

interconnectionwithNewEnglandviaasubmarinecable.

Atthistime,thishassignificantcostimplicationsand

wouldrequirefurtherfeasibilitystudiesandcooperation

betweenNovaScotiaandNewEngland.

Intheotherdirection,thedevelopmentofLower

ChurchillHydroinLabradorhasthepotentialtoprovide

clean,low-impactrenewableenergyimportstoNova

Scotia—butthatdevelopmentisatleastsixyearsoff.

Itwouldrequirenewtransmissionlines,including

underseaconnections.

Governmentwillcontinuetoexploreopportunities

toexpandandintegratetheregionalenergygridinorder

tosharelargehydroandenhancedrenewableenergy

developmentwithourneighbours.

Smart TechnologiesAsmartgriddeliverselectricityusingdigitaltechnology

tomanageacustomer’senergyuse.Forexample,asmart

gridcouldturnondomestichotwaterheatersonlyat

night,whendemandisslackandthecostofproducing

electricityislow.Smartmeterscanencourageconsumers

toadjustthetimetheyheatwateroruseenergy-gobbling

homeappliances—especiallyifdoingsowillsavethem

money.Thesesystemscansaveenergy,reducecosts,and

increasereliability.Experiencefromotherjurisdictions

hasshownthatsmartmetersaremosteffectivewhen

accompaniedbytimeofuserates(priceofelectricity

dependsonthetimeitisused).Bettermanagementof

theelectricitysystembecomesevenmoreimportantas

moregenerationcomesfromintermittentsources.

NSPIwilluseitsshareofamulti-milliondollargrant

fromthefederalCleanEnergyFundtoinstallsoftware

andmanagementsystemstostarttestingsmartgrid

technologiesinNovaScotia.Theprojectwillfocusonthe

integrationbetweensmartgridtechnologies,customer

loads,andintermittentrenewableresources.Theproject

willhelpthecompanybetterunderstandtheeffectof

smartgridsoncustomerbehavior,andthetypeofloads

thatcanbecontrolledbyreal-timedemand.


Things This Plan Does Not Do 9P lanninginvolveschoices,andindevelopingthis

RenewableElectricityPlan,thegovernmenthas

chosennottodoseveralthings.

Theprovincehasdecidedtomaintainaregulated

electricitymarketplaceandnotopenittocompetition.

Openingthesystemtoprivatesaleswouldposemajor

challengesforanelectricalsystemthatisnotwell-

connectedtotheNorthAmericangrid.Openingthe

marketwouldraisedifficultquestionsforthosewhostay

behind:Whowillcarryoutplanning?Whowillsupply

powerwhenthewindspeeddrops?EvenOntario—a

provincewithmoreenergyoptionsthanNovaScotiaand

accesstolotsofenergybeyonditsborders—haslargely

reversedderegulation.IfNovaScotiaeventuallymoves

toregionalcooperationandregionalsystemoperation,

thesechoicescanberevisited.

Governmenthasdecidednottoletindependent

powerproducersbuildallthemediumandlarge-scale

renewableenergyprojects.Inessence,therearetwo

competingmodelsforselectingnewpowerprojects:

UARBregulationofanintegratedutility,andcompetitive

bidsbyindependentproducers.However,NovaScotia’s

lackofarobustconnectiontotheNorthAmericangrid

limitscompetition.Withoutthatelement,competitive

bidsmaynotbethebestmodel—thatwasthejudgment

in2001.Thisplanallowsthetwomodelstooperatein

parallel.Theresultswillallowgovernmenttodetermine

thebestwaytobalancethedevelopmentprojectsinthe

future.

GovernmenthaschosennottoextendtheCOMFIT

tolargerprojects.Justasacommercialfarmcanproduce

vegetablescheaperthanagardenpatch,anindustrial-

scalewindfarmcanproduceelectricitycheaperthana

backyardturbine.Therearemanyeconomiesofscalein

renewablepowerproduction.Nevertheless,aconscious

decisionhasbeenmadetoencouragesmallaswellas

largerrenewableelectricityprojects.Thisispartlyto

ensurewidelydispersedenergysources,andpartlyto

encourageruralcommunityeconomicdevelopment.

AFITwillresultinsomewhatmoreexpensiveelectricity

thanopencompetitivebidding,butitgivesthesesmaller

projectsadegreeofmarketcertainty.

Atthistime,thereisnosolarCOMFIT.Although

solartechnologiesaretechnicallyfeasible,theystill

comeatahighcostthatcouldsignificantlyaffect

electricityratesifsupportedbyafeed-intariff.However,

Governmentrecognizesthecurrentvalueandpotential

ofsolarenergyandhasincludeditasaqualifying

renewableresourceundertheenhancednetmetering

program.Inseveralyears,thecostofsolartechnology

willchangeandsolarwilllikelyhavealargerroleinthe

renewableenergymix.

Renewableelectricityproducedfromsmalllocal

projectswillbeslightlyhigherpricedthanelectricity

fromlarge-scaleprojects.Butsincethetotalamountof

powerfromCOMFITprojectswillstartoutsmall,the

overallimpactonratesislow—estimatedatlessthan

onepercentonatypicalconsumer’sbill.Ofcourseuntil

theUARBsetstheCOMFITrate,andweseehowfullyit

istakenup,thepreciseimpactcan’tbecalculated

withcertainty.


Thetransitionfromimportedfuelstorenewable

electricityandcleanerlocalfuelswillincreasepower

billsintheshortterm,butofferlowerandmorestable

ratesinthelongrun.Notmakingthistransitionwould

shackleratepayerstothewildpriceswingsandtherelentless

upwardmarchofinternationalenergymarkets.

Andinthelongrun,thisplanisaboutmakinglife

moreaffordable—doingnothingwouldcostmore.The

shareofNSPI’soverallcoststhatgotofuelhasbeen

increasing.Sohasthecostofexpensiveequipmentand

suppliesneededtocontrolharmfulemissionsfromcoal-

firedpowerplants.Wecankeepgoingdownthatpathand

doomconsumerstoanunsustainablefuture,orwecanbite

thebulletandmakethenecessaryinvestmentstohavea

secure,safe,affordable,andsustainableenergyeconomy.

Howhardisthatbullet?Governmentestimatesthat

measuresinthisplanwillresultina1-2%increaseannually

onelectricitybills.Toreach2015,thiswouldaddanaverage

ofapproximately$10-$20annuallytotheaveragesingle

familyhomeelectricitybill(closerto$20-$40ifelectricityis

usedforheating).

NSPI’s2009IntegratedResourcePlan(IRP)also

estimatedthecostofaddingmorerenewableelectricity

tothesystemtobeabouttwopercentperyearover2009

electricityrates.Boththe2007and2009IRPstudiesconfirm

thatenergyefficiencyandconservation,incombination

withrenewableenergy,aretheleastcostoptionstomeet

energydemandandenvironmentalobjectivesoverthe

longertermforNovaScotians.

Inaddition,costincreasesareanticipatedtobe

partiallyoffsetbyreducedconsumptionasaresultofthe

demand-sidemanagement(DSM)programcurrently

operatedbyNSPI,andinfuturebyEfficiencyNovaScotia.

Costs and Benefits 10

$0.70

$0.60

$0.50

$0.40

$0.30

$0.20

$0.10

$0.0

$/kW

h

Electricity Prices for Selected Locations

References All prices are for residential consumers in 2007. Prices for Canadian cities are from Hydro Quebec, Comparison of Electricity Prices in Major North American Cities. Rates in effect April 1 of each referenced year. Residential electricity prices for consumers using 1,000 kWh of electricity. Prices for International Cities are from International Energy Agency, Key World Energy Statistics 2009.

Irel

and

Hal

ifax

Toro

nto

Cha

rlo

ttet

ow

n

Mo

ntre

al

Uni

ted

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om

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land

Den

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n

$0.30

$0.25

$0.20

$0.15

$0.10

$0.05

$0.0

Cost of Energy In North America

$/kW

h

ReferenceHydro Quebec, Comparison of Electricity Prices in Major North American Cities. Rates in effect April 1 of each referenced year. Residential electricity prices for consumers using 1,000 kWh of electricity. All prices are measured in $/kWh.

2005 2006 2007 2008 2009

HalifaxMonctonMontrealToronto

VancouverSan FranciscoNew YorkBoston

Nova Scotia’s electricity rates compare with neighbouring jurisdictions, but are far more vulnerable to market volatility and future carbon regulation because of high coal content. Areas with high green content (e.g. large hydro: Montreal and Vancouver, at right) are likely to have greater price stability.

27

Costs and Benefits


Creating Jobs and Investment in the Industries of the FutureOnegoaloftheRenewableElectricityPlanistomaximize

theeconomicbenefitsofincreasedrenewableenergy

generation—tocreategoodjobsandgrowtheeconomy.

Theinvestmentneededtomeetthe2015commitment

of25percentrenewableelectricitycouldbeasmuchas

$1.5billion.Muchofthisinvestmentwillbespentin

NovaScotia,creatingjobsinconstruction,supply,and

manufacturing—mainlyinvolvingwindenergyprojects.

Moreoftheinvestmentwillstayintheprovinceifturbine

bladesandtowersarealsomanufacturedhere.DSME’s

recentdecisiontomanufacturewindtowersandblades

attheformerTrentonWorksplantincreasesourcapacity

forsuchmanufacturing.

Dependingupontheamountofworkcarriedout

locally,investmentinrenewableelectricitytomeetthe2015

commitmentwillproduceestimatedprovincialgovernment

revenuesof$30-45million(throughdirectandspinoff

effects),andemploymentof5,000to7,500person-years.

Competitive Advantage of a Cleaner Energy MixNovaScotia’sdependenceoncarbonfuels,especiallycoaland

oil,threatenstobecomeasignificantimpedimenttotradeand

competitivenessascarbontariffsandtraderulesproliferate.

ByreachingandexceedingGHGreductionstargets,and

achievingacleaner,morediversifiedsupplyofenergyacross

allsectors,theprovincewillbeintheoptimumpositionto

maintainstable,competitiveenergycosts.ThatwillhelpNova

Scotiabusinessescompeteinworldmarkets.AndNovaScotia

goodsandserviceswillremainattractiveforpurchasersand

consumerswantingtoreducetheircarbonfootprint.

Reduced Greenhouse Gas Emissions and Improved Air QualityCurrentmethodsofelectricitygenerationproduce50

percentofNovaScotia’sgreenhousegasemissions,andthe

vastmajorityofourairpollutantemissions.

The2008NovaScotiaWindIntegrationStudy

estimatedthattheadditionof311MWofinstalledwind

powercapacitymightavoid$8to$9millioninGHG

emissioncosts.Withanincreaseto581MWofinstalled

windcapacity,avoidedGHGcostshavethepotentialto

impactelectricityratesby2-3%.2

ThisRenewableElectricityPlandisplacesfuelslike

coalandoilwithreduced-emissionrenewablesandcleaner,

locally-producednaturalgas.Theresult:cleaner,healthier

air,andreducedcostsforeveryone.

2EstimatesarebasedontheassumptionsmadeinNovaScotiaPower’s

2007IntegratedResourcePlanthatcarbonwouldbesubjecttoan

additionalprice.


Implementation 11TheRenewableElectricityPlanintroducespolicies

thatarenewtoNovaScotia.Somestepscanbe

takenrightaway.Otherswilltaketimetoimplement.

Newprogramsandrulesalsorequireperiodicreviewto

ensuretheymeetpolicyobjectives.

Stepstoimplementandmonitorthisplaninclude:

• TheMinisterofEnergywillintroducelegislation

duringthespring2010sessionofthelegislature.

• Cabinetwillimplementregulationsthissummer,after

consultation.

• TheUARBwillholdpublichearingstosetvarious

FITrates.

• AfterpublicationoftheNaturalResourcesStrategy,the

provincewillreviewthebiomassstandardsestablished

bythisplan.

• Governmentwilldevelopastrategytomaximize

economicandenvironmentalbenefitsfromthe

transitiontocleaner,morerenewableandsecure

energysupplies.Thestrategywillprovideaframework

forplansinvolvingenergyconservation,efficiency,

anddemandmanagement;spaceheatingandwater;

transportationenergyuse;andnaturalgas.

• GovernmentwillreviewtheCOMFITprogramin2012.

Renewable Electricity

PlanA path to good jobs,

stable prices, and a cleaner environment.

renewable electricity plan - ns energy and...

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