If the proposed Atlantic Loop project got off the ground and delivered power to our electrical grid, just how much renewable energy could Hydro-Québec supply Nova Scotia Power and its customers?
Years into discussions involving Ottawa, the provinces, power companies, and First Nations, that’s still an open question. There’s a perception that Hydro-Québec has unlimited supplies of renewable energy cascading through its power dams, which could be transported to the Maritimes via 800 kilometres of new overhead power lines, and possibly, a subsea cable under the St. Lawrence River.
But that perception has been tested recently. Last weekend, during a two-day blast of Arctic air, the utility hit new peaks for energy consumption which triggered power outages in many parts of Quebec. Sound familiar?
As in Nova Scotia, the extreme cold temperatures created demands the Quebec grid simply could not meet. And this happened despite the fact Hydro-Québec took emergency measures to (a) scale back electricity exports to Ontario, (b) give Quebec customers a discount when they agreed to consume less power during those two bitterly cold days, and (c) bought electricity from the state of New York — which is usually a customer.
Renewable (but not unlimited) energy
But weather isn’t the biggest factor that should make Maritime governments wonder how much juice Hydro-Québec may have to sell. Lucrative long-term export contracts and growing demand within its borders could have more impact.
Consider federal and provincial policies that encourage both buying electric vehicles and buses and heating more buildings with electricity. Hydro- Quebec is forecasting demand within Quebec to grow by 25 TWh (terawatt hours) over the next 10 years. To put that in perspective, 1 TWh is roughly the amount of hydroelectricity Nova Scotia Power is receiving from Muskrat Falls over the Maritime Link. That 1 TWh replaces 10% of electricity generated from coal-fired plants in Nova Scotia – facilities targeted to spew their last greenhouse gasses by 2030.
Nova Scotia Power is supposed to receive another 1 TWh from Muskrat Falls once the problems are resolved with the transmission system between Labrador and Newfoundland. In other words, the 25 TWh growth in Quebec’s domestic demand is a significant forecasted increase over a short period — roughly the same amount of time it would take to approve and build a new Atlantic Loop transmission system linking Quebec/Labrador with the Maritimes.
H₂0 = Hydrogen, too? Oh.
That’s not all. Quebec premier François Legault is urging companies developing green hydrogen and battery storage to take advantage of the lowest electricity rates in the country and set up shop in La Belle Province.
According to a report from Radio-Canada, an internal memo from Hydro-Québec to a legislative committee studying a bill to incentivize these new, green industries described just how much electricity they would require: 23,000 MWh. The utility figures that’s roughly the equivalent of building 13 new dams on the Romaine River in northern Quebec, where four huge complexes generate 1,550 MWh. Such an idea is “unrealistic” says the utility. “Technical, economic, and social constraints would make it impossible to meet a fraction of these demands.”
Please get in line
Quebec already has some very large customers to supply. Ontario gets 2 TWh a year, but that’s a mere 5-watt bulb compared to the 20-year contract Hydro-Québec signed to supply an annual 9.45 TWh to utilities in Massachusetts.
Electricity was supposed to begin to flow to Massachusetts last year, but the project has been delayed due to repeated court challenges in Maine over the routing of the power line.
According to the New York Times, local groups opposing the line have “found deep-pocketed supporters in three energy companies that operate natural gas and nuclear plants in the region, and which stood to lose money if cheaper hydropower entered the New England grid.”
Most recently, Maine’s Supreme Judicial Court ruled that the project can proceed, but yet another day in court is scheduled for August 2023.
The public utility’s 2021 annual report shows the amount of hydro being exported prior to that mega-sale to the northeastern U.S.
Hydro-Québec Annual Report 2021
Net export volume: 35.6 TWh
Exports’ contribution to net income (profit): $865 million
Sales volume on the Québec market: 175.2 terawatthours (TWh)
Contribution to the Québec government’s revenue: $4.9 billion
Major investments throughout Québec: $4.2 billion
Looping the Loop
Hydro-Québec is currently in the process of doing a feasibility study on the “social, environmental, and technical aspects” of the potential Atlantic Loop project.
“HQ’s priority is to provide for Québec’s electricity needs, but we are also committed to helping our neighbours develop decarbonization as well as reliability solutions,” said Lynn St-Laurent, Hydro-Québec spokesperson for external projects.
“Current discussions with utilities in the Maritimes, as well as the different levels of government including the federal government, are aimed at finding a solution to help decarbonize the Maritimes to support the phase-out of coal-fired generation and to reach the federal government’s goal for electricity generation in Canada to reach zero emissions by 2035.”
That’s essentially the same answer provided by another HQ public relations person to the Telegraph-Journal in New Brunswick last December.
The article in the New Brunswick newspaper was based on a description of the Atlantic Loop provided to the Canada Infrastructure Bank (which could help finance the estimated $5.5 billion project) by the Loop’s planning committee.
The proposal includes 800 kilometres of overhead power lines (mostly through New Brunswick) with capacity to carry 1,150 MWh. Getting power from New Brunswick to Nova Scotia would require the construction of a new power line near the Sackville-Amherst border because the current one (called an inter-tie) has been at capacity for many years.
According to the Telegraph-Journal article from December, NB Power is studying the transmission of up to 800 MWh to Nova Scotia Power. But a call to NB Power spokesperson Dominique Couture confirms that since then, the amount of renewable electricity that could flow to Nova Scotia through a new tie-line has been scaled back.
“The NB/NS portion is currently envisioned to allow 550 MW of electricity to flow from New Brunswick to Nova Scotia. Engineering technical assessments have challenged the feasibility of the initial 800 MW and hence we are now analyzing the 550 MW solution,” wrote Couture in a follow-up email to the Examiner.
The 550 MWh represents 100 MWh more energy than the 450 MWh carried by the existing Maritime Link that connects Nova Scotia with energy from Muskrat Falls. So is that volume of enough benefit to make the Atlantic Loop worth the cost?
The Halifax Examiner emailed Nova Scotia Power asking for comment on the supply issue: How much electricity might Nova Scotia receive if the Atlantic Loop proceeds? The answer neatly side-stepped the elephant in the room.
“As the operator of the province’s energy grid, we have an important role to play in Nova Scotia’s energy transition given Government’s ambitious climate goals of moving off coal and reaching 80% renewables by 2030,” wrote Mina Atia, spokesperson for Nova Scotia Power.
“We continue to believe the Atlantic Loop is the most effective way to progress carbon reduction initiatives in the region and we hope the federal government will support this project, so we remain engaged in the discussions. Supply volumes, costs and investment options are part of those discussions,” concluded Atia.
No new information there.
Hydro-Québec’s spokesperson for external projects, Lynn St-Laurent, also refused to answer the question about how much energy is being discussed. “Respectfully,” replied St-Laurent in an email to the Examiner, “we cannot get into the commercially sensitive matter you are asking about but if we are at the table, it’s because we have options to provide for a commercial agreement.”
So for the time being, and for a variety of reasons, the utilities are keeping the light on this question rather dim.
Where do we go from here?
Emera president Scott Balfour has repeatedly said Nova Scotia will not be able to meet the federal 2030 deadline to close four coal-fired generating stations without importing reliable, renewable power to replace that fossil fuel. The Nova Scotia government and environmental groups such as the Ecology Action Centre (EAC) agree with him.
“Imports clearly act as a firm power back-up to the intermittent renewables that partially fill the gap left from the coal decrease,” says a report the EAC commissioned from consultants EnviroEconomics and Nautilus Research. “However,” acknowledges the report, “many uncertainties could de-rail the Atlantic Loop project.”
Here are a few examples of “uncertainties” from the consultants’ report published last spring:
COST: “The cost of Atlantic Loop scenarios, which could be underestimated, as is typically the case, while renewable costs might continue a trend of falling faster than anticipated.”
SUPPLY: “Future supply out of Quebec and Newfoundland and Labrador to feed into the Atlantic Loop may be a question given competition for such low emitting generation in the United States and Ontario.”
TECHNOLOGY: “Our analysis suggests renewable generation paired with storage could be a total game changer.”
The report prepared for the EAC concludes:
…a portfolio approach that includes developing more domestic renewable generation while exploring Atlantic Loop opportunities is a prudent approach to meeting future electricity needs under a net-zero, and fossil free future.
So no “silver bullet.”
The Atlantic Loop might be the fastest way to close down coal plants in Nova Scotia but even that project wouldn’t be enough to get Nova Scotia to net-zero emissions by 2050, says the report titled “Assessing Net-Zero Electricity Supply and Demand Models in the Atlantic Loop.”
Rather than putting all their eggs in the Atlantic Loop basket, Nova Scotia and New Brunswick governments and utilities appear to be following the “portfolio approach.”
New Brunswick is exploring more wind and nuclear power options.
Nova Scotia has awarded contracts for 350 MWh of wind projects, and is ramping up the use of natural gas and biomass to generate more firm electricity.
Natural gas and biomass are a long way from truly “green” but may lower GHG emissions and offer firm replacement energy. Battery storage, more solar installations, offshore wind, and Bay of Fundy tidal projects are still somewhere down the road.
But these can’t come soon enough if the oft-stated goal of shuttering coal plants is going to be achieved.
Jennifer:
What an excellent article!
As you may know, Hydro-Quebec’s CEO, Sophie Brochu, announced her resignation a month ago. The primary reason for her exit was Premier Legault’s plan to dramatically expand the province’s hydroelectric generation along the North Coast at the Magpie and Petit Mecatina rivers.
These are expensive projects. The 2022 HQ strategic plan indicated that new generation would cost C$11/MWh. The actual cost may well be considerably higher since hydroelectric development pursues the most cost effective projects first. The current hydroelectric projects in Canada have proved very expensive indeed — in large part because they are the “high hanging fruit” after a hundred years of hydroelectric development.
And, of course, the perennial Canadian conflict between the first nations who own the plant sites and the state owned utilities who would like to develop them is likely to add years of conflict to the development time line.
Please keep up the good work.
Robert McCullough
robert@mresearch.com
WHOOPS – Churchill Falls deal ends in 2042:
1. Globe & Mail – Newfoundland finally has a strong hand to play as it seeks a new deal on Churchill Falls contract with Quebec
2. Montreal Gazette – Newfoundland and Labrador prepare for end of Churchill Falls agreement
https://montrealgazette.com/news/quebec/newfoundland-and-labrador-prepare-for-end-of-churchill-falls-agreement
https://www.theglobeandmail.com/business/commentary/article-newfoundland-finally-has-a-strong-hand-to-play-as-it-seeks-a-new-deal/
Excellent reporting once again. The Atlantic Loop has always seemed to me to be more of a political project than anything else, sort of like the 21st century version of the Guysborough railway. Time to focus on Plan B.
Interesting to compare this report with the Feb 2022 report on Emera profits. Wouldn’t it be nice if Emera were to set out its development plans in NS for comparison with priorities and investments in Florida and whichever other US state in which it now sells electricity. And BTW just what sort of regulatory regime governs its prices south of the border.