Nova Scotia’s green power failure

Oh, those were giddy times back on March 17, 2007, when the legislature unanimously passed the Environmental Goals and Sustainable Prosperity Act, and officials made a bold announcement: Not only would Nova Scotia be the world leader in environmental stewardship, but by including the word “prosperity” right in the title, they told us we’d get rich doing it.

To policy wonks the Act is EGSPA, pronounced “eggs-puh,” the bible of provincial environmental law. And it’s proof that Nova Scotia found environmental religion.

EGSPA lays out a boatload of targets—19 of them—tying measurable environmental standards to specific deadlines. They’re all important, but one stands out as the holy grail: our climate change goals. We, all million of us Nova Scotians, would reduce our collective greenhouse gas emissions some 10 percent below 1990 levels by 2020. But now, in 2011, we’re about 18 percent above 1990 levels, so to achieve that in just nine short years will be a monumental challenge.

Generating electricity accounts for about half of our GHG emissions—and most of that comes from four humongous coal-fired power plants in the northern reaches of the province—so reducing our electrical carbon footprint is a good place to start. And to its credit, Darrell Dexter’s NDP government has set up an ambitious schedule. Right now, 16 percent of our electricity comes from renewable sources that don’t burn fossil fuels (mostly hydro, some wind); that number is supposed to increase to 25 percent by 2015 and then to a whopping 40 percent by 2020.

So for getting us off fossil fuels, the Dexter government is singing from the EGSPA psalmbook. The devil, alas, is in the details.

The problem is that in Nova Scotia, we’ve been going after renewable power by using an old-fashioned tendering process. Nova Scotia Power puts out a tender for X amount of renewable energy, and awards the contract to the lowest bidder. But as this is a race to the bottom—each firm is trying to come up with lower costs than competing firms—the winner of the bid has often made unrealistic assumptions about reducing costs. This in turn makes it difficult for them to get financing—the banks take one look at the proposal and see it as extremely risky, so decline to loan money. The project dies. So far, only about half the renewable projects that have been awarded have actually gotten built. (An NSP report pegs the failure rate at 51 percent.) This doesn’t bode well for us meeting our renewable goals.

But in other places in the world, Germany, Vermont, Ontario and others, renewable power goals are being met by creating what are known as “feed in tariffs,” or FITs. It works like this: anyone at all—any person, any business, any organization—can prop up a windmill or a solar farm, and the power company must buy the electricity generated at a set price—the FIT.

FIT prices are based on the cost of generating the renewable power, plus a “reasonable” profit, and are higher than the cost of making electricity with fossil fuels. So right now it costs Nova Scotia Power about 11 cents per kilowatt hour to make electricity with coal plants, and power rates are set with that cost in mind; but if Nova Scotia Power is required to buy more expensive green power—tidal power could cost around 60 cents—rates will have to go up to reflect the higher costs.

Enter politics. Every politician in Nova Scotia knows their own party voted for EGSPA, and every politician knows it is simply impossible to meet EGSPA’s GHG goals without switching over to renewables, and every politician knows that for the foreseeable future, clean renewable power will cost more than dirty coal power. But all the same, when the government mandates that Nova Scotia Power relies more on renewable, every politician in opposition parties damns the government for increasing power rates.

This is more than unfair—our power rates go up now almost entirely because the price of coal and natural gas (which is burned at Dartmouth’s Tuft’s Cove power plant) goes up. The cost of renewable power is only a small part of the rate increase to customers, but that won’t stop opposition politicians from singling out the government’s renewable policy as the cause of rate increases. “[Will] the premier and his government admit that the price of electricity is going up and will continue to climb, and admit this has a negative impact on economic development and affordability?” Liberal energy critic Andrew Younger asked during a recent question period at the legislature. “With all this talk about renewable energy projects… will the minister admit that increasing power rates hurts competitiveness in Nova Scotia businesses?”

Still, paying more for power is rightly a huge concern for regular people. Meeting their household budgets and properly feeding their kids is a more immediate concern than is, well, saving the planet, which requires billions of other people all over the world to co-operate.

But maybe people can see that the actual price of electricity isn’t the only thing that matters. There are potentially other, immediate benefits that could come along with paying higher prices for power. Take Ontario, for example: While opposition parties will test the people’s belief in the FIT in a coming election, the FIT has caused a boom in the Ontarian wind turbine industry, as former auto plants retool to make turbines, resulting in good-paying manufacturing jobs and all sorts of related economic activity. Thanks to its FIT, Germany has a thriving solar industry, likewise becoming an important part of the German economy. That’s why in both Ontario and Germany there are broad political coalitions supporting FITs. Turns out, when people realize that higher electric rates translate into better jobs and a healthier economy, they’re not so opposed to them.

But how do we make the higher costs of renewable power translate into extra economic benefits in Nova Scotia? How do we keep the “prosperity” in EGSPA? The government has invested $60 million into a joint venture with the Korean firm Daewoo to transform the abandoned TrentonWorks rail car plant into a factory making wind turbines, and hopefully (the jury’s still out) this will be a successful venture with high-paying jobs and export profits coming into the province. But this plant is not directly related to our own price of electricity.

So to get a more broad popular buy-in for renewable power goals, the government is in the process of developing something like a FIT, a hybrid creation called a Community Feed In Tariff. In the COMFIT system, prices will be set for renewable power generation, but only for facilities where the majority owners are community organizations: municipalities, universities, First Nations, co-ops and Community Economic Development Investment Funds. There’s a lot of hokum about this: We’re supposedly following and celebrating our co-operative history, with the co-op stores and credit unions—and maybe we are—but the point is to spread the benefits of generating renewable power around, so that regular people can start receiving the “prosperity” part of EGSPA.

But will true community organizations be able to take advantage of the COMFIT program? There’s no doubt that universities and cities—with multi-million dollar budgets that can leverage the loans needed to build power plants, and with well-paid bureaucrats on staff who can jump through the hoops and do the needed research—will benefit under COMFIT. But will regular people see university and city COMFIT programs benefitting them personally? Not unless those universities and cities figure out ways to make those benefits concrete, and perhaps more important, help people understand the value of them.

The bottom line is this: If people don’t see themselves benefitting with investment return and jobs in their community in manufacturing facilities, then all they will see is higher power rates, and they’ll be politically opposed to COMFIT. Hold that thought.

The other concern is what COMFIT covers. The government is setting prices for five forms of renewable energy: “big” wind (more than 50 kilowatts); “little” wind; hydro; tidal and biomass. Noticeably absent from the list is solar.

That’s not because Nova Scotia is a dreary, overcast place with little potential for solar power. In fact, we have about the same potential for solar power as Germany, which has a booming solar industry, and of Canadian provinces’ solar potential, Nova Scotia is second only to Ontario.

Rather, solar is not on the list partly because COMFIT’s goals are really modest. At best, only 100 megawatts will be produced through COMFIT, which is just half the minimum power requirements of what’s known as the distribution grid—the wires that go from substations to houses and businesses. That’s only about six percent of our total power needs. In practice, the bulk of the renewable power will still come through the old tendering process, with the power going to the transmission grid—the big wires that connect power plants to substations.

And while under COMFIT lots of small communities might throw up a few wind turbines nearby, farmers might form a co- operative to burn agricultural waste in a biomass facility, and some newly energized CEDIFs might install some tidal generators along the Annapolis River, there’s one very large community that won’t have such opportunities: people living here in the city.

Windmills are illegal in the urban areas of HRM, although city hall is looking to erect some out in the Pockwock watershed. Otherwise, the only kind of electricity-generating renewable power option available to, say, homeowners on the peninsula, is photovoltaic panels on the roof. You can install those now, and even sell a bit back to Nova Scotia Power, but only at the same rate Nova Scotia Power charges you for coal-generated power.

Put simply, urbanites won’t directly benefit from COMFIT. And unless they can be brought into the system as it evolves, they might become a political force in opposition to renewable power.

This survey of our renewable power options can’t be complete without mentioning the two prospective game-changers: massive tidal power plants on the Bay of Fundy and the gigantic Lower Churchill Falls hydro project in Labrador.

It’s unlikely that large tidal projects will provide any of the electricity needed to meet EGSPA’s 2015 renewable goal, and probably not much for the 2020 goal either; that kind of tidal power is at best decades away, if even then. But recently, the province signed an agreement with Atlantis, an Australian firm, to build a demonstration plant in the Minas Basin. Under the agreement, should Atlantis in the future produce electricity, Nova Scotia Power will be obligated to buy it—at rates to be determined.

Lower Churchill is a different animal altogether. The Nova Scotia government recently entered into an agreement with the government of Newfoundland and Labrador to bring an electrical transmission line from Churchill Falls through Nova Scotia and then south to New England, where Newfoundland hopes to sell lots of “green power” (see Editorial, page 7). Nova Scotia, meanwhile, hopes to buy a lot of the power as well. The details haven’t been spelled out, but the goal is to jump from 2015’s 25 percent renewable goal to 2020’s 40 percent renewable goal mostly by using power from Churchill Falls.

We don’t yet know how much electricity from Churchill Falls will cost, but it will likely cost less than power generated through the COMFIT. Conceivably, Churchill Falls’ hydro power could provide a reliable back-up to the intermittent wind power generated through COMFIT, in which case the two kinds of renewable power would supplement each other nicely.

But it’s also possible that, facing political opposition from residents paying ever- increasing power bills, the government of the day decides to buy relatively cheap Churchill power instead of higher cost power generated by the COMFIT. One could envision a scenario where the entire system crumbles: The government cuts COMFIT organizations out, and whatever community support had been created through COMFIT disappears, resulting in no support at all for renewable power of any sort.

That’s why COMFIT has to be done right to begin with, and it has to grow. Hopefully, when the UARB issues a ruling on COMFIT rates April 4, it’s just the start of a years-long process of bureaucratic fine-tuning and not the end of the matter. If the program can grow, if the bugs can be worked out so community groups actually benefit under the plan, if COMFIT can be expanded beyond the distribution grid and onto the transmission grid, if urban residents can be included through rooftop solar, if the benefits of COMFIT are widely spread, broadly understood and translate into political support for higher-priced renewable power—then maybe the province can meet its renewable power goals. Those are all pretty big ifs.

But recall: Generating electricity is responsible for half of Nova Scotia’s greenhouse gas emissions. And if everything works the way it’s hoped, the COMFIT program, together with Churchill Falls and a host of other, smaller existing and planned renewable power projects, will allow us to meet our EGSPA goals for the source of half of our GHG emissions.

What about the other half?

Half of the other half—25 percent of our total GHG emissions—comes from transportation. On that front, the government has been worse than ineffective; in fact, both the Dexter government and the Rodney MacDonald government before it have completely ignored their EGSPA responsibilities and have acted to increase, not decrease, GHG emissions. Each government has spent hundreds of millions of dollars building new highways, twinning existing highways and planning new highways like the Burnside-Sackville connector and the 113 cutoff between Bedford and Tantallon. While new highways may reduce the GHG emissions from any existing traveller, it’s been shown time and again that new roads attract new traffic and therefore increase total GHG emissions.

Moreover, the government still doesn’t provide significant funding for mass transit, at least not in the amounts that would translate into real reductions in car travel. And the EGSPA-required goal of imposing California-style car emission standards for GHG by 2010 was completely abandoned.

Collectively, these transportation policies do nothing at all to meet EGSPA goals. Additionally, they will serve to impoverish Nova Scotians as the price of imported oil increases.

The other half of the other half of greenhouse gas emissions—the last 25 percent—comes from a variety of sources, but besides a few fits and starts in programs for renovating houses for heating efficiency, nothing much has been done on those fronts either.

In the end, it’s looking like the COMFIT system is too small, too restrictive and doesn’t cover enough kinds of renewable power. Moreover, because the Dexter government’s greenhouse gas emission reduction efforts are focused on tinkering with regulatory requirements for Nova Scotia Power to buy renewable power while completely ignoring tough political choices that would affect how people travel (in buses and trains rather than in cars), COMFIT might be seen as a touchy-feely greenwash for what is otherwise business as usual.

The promised land of EGSPA prosperity remains an elusive dream.

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Amid global COP28 discussions, focus remains on the province’s plans for an 80% renewable grid by 2030. But there are other options to explore, policy analysts say.

This article appears in Mar 10-16, 2011.