Decarbonization: how will Nova Scotia Power get to “net zero” greenhouse gas emissions?

“Powering a Green Nova Scotia, Together.” That’s the title of a long-awaited, long-term strategy filed by Nova Scotia Power to the regulator describing how the company proposes to reduce our carbon footprint over the next 25 years. 

“The need for deep greenhouse gas (GHG) emissions reduction is recognized across the globe” says the Integrated Resource Plan (IRP) document, which is a response to targets legislated in the Sustainable Development Goals Act (SDGA) last October. It replaced an earlier law passed by the Dexter government in 2007. 

What are the goals?

The SDGA calls for decarbonization of at least 53% (relative to 2005) by 2030 and attainment of “net-zero” carbon emissions by 2050. The McNeil government has yet to draft regulations to map out how these targets will be achieved; consultation planned for the fall was derailed by COVID and no firm date in 2021 has yet been set. 

So Nova Scotia Power’s Integrated Resource Plan (IRP) — developed with input from various environmental groups and business interests — provides the first tangible glimpse of a road map for how the province might get to a low-carbon future. It’s a preliminary guide expected to change as events unfold, but it’s a guide, nevertheless.

While renewable sources of energy have increased to make up about 27% of the fuel mix, the province still generates about 56% of its electricity from coal — exactly the same percentage as five years ago. 

The report says NS Power evaluated a broad range of future scenarios that ”reflect key uncertainties over the coming decades.” But whatever scenario unfolds, here are the key drivers the utility will use to “de-carbonize” the province over the next few decades.

Click here to read the Integrated Resource Plan.

1. Switching more buildings to electric heat and more vehicles to run on electricity

Combined with the import of hydro from Muskrat Falls to meet 10-20% of the grid’s requirements, “electrification” will reduce GHG emissions (carbon) to an estimated 87-95% of 2005 levels by 2045 — close to the net-zero goal by 2050. As examples, the report states homes that switch from oil to a heat pump reduce GHG emissions by 35%. (Of course, on a personal level that requires having the financial means to convert from oil to electricity in the first place, a constraint that will have to be addressed in order to reach lower carbon levels). About 28% of Nova Scotia’s GHG emissions result from heating buildings. 

Switching from driving vehicles with an internal combustion engine to a vehicle powered by electricity decreases emissions by 60 percent. There are still barriers to making that change, including battery life and lack of recharging stations. For example, over the next year, Nova Scotia Power plans to switch only nine company vehicles in its fleet for electric ones . As electric vehicle technology improves, it expects to eventually replace the pickup trucks. 

Interestingly — and without doubt controversially — a key finding in the report is that keeping electricity prices affordable is linked with growing the demand for the expanded use and sale of electricity. NS Power hopes to reap what it plans to sow. This assumes that electricity in the future will be produced from renewable sources rather than fossil fuels.

2. Closing down the coal-fired power plants

The coal plants generate about 56% of the province’s electricity today, the same percentage as in 2015. They contribute a large percentage of the province’s GHG’s emissions and although Ottawa has given the power company special dispensation to allow them to operate until 2040, the IRP models one scenario where the plants in Cape Breton and Trenton phase out by 2040 and another where they shutter by 2030. The earlier deadline is dependent on having the capability to replace the steady electricity the coal-fired plants generate without too much “rate shock” for consumers.

Coal is by far the cheapest fuel source today. The report envisions several replacement strategies but the primary one is adding combustion turbines. Engineering studies will look at converting coal to gas at Trenton and Point Tupper power plants. Another 350 MW from new wind farms is projected to be added by 2030 and 500 MW by 2045. Solar power is another renewable resource but NS Power doesn’t expect it to contribute much prior to 2043. It says unless there are major improvements in storage capability, solar is most available in the summer but most needed during the winter.

3. More regional integration

This used to be called “regional energy cooperation” — upgrading existing transmission lines through New Brunswick to import renewable hydro from Quebec and seeking financing and regulatory approval from various governments to build new overhead transmission lines to interconnect the region in an “Atlantic Loop.” This would include hydro from Quebec as well as hydro from Labrador via a subsea cable to Nova Scotia. Interconnection is a key component in every scenario to get the province off coal by 2040 or possibly, 2030. 

“The replacement of reliable, firm capacity, as can be provided by Regional Integration, is critical to the next phase of system transformation,” notes the report. During a conference call a couple of weeks ago, Scott Balfour, the CEO of Emera, Nova Scotia Power’s parent company, bluntly informed shareholders that whether coal plants can be phased out before 2040 hinges on whether new power lines get built to bring in more imports of renewable energy. 

“This Atlantic Loop project is really about whether we an accelerate that timing,” said Balfour, from Muskrat Falls. “Can we find a path that would see us to retire those coal plants earlier and ideally by 2030, which would align with the federal government’s objective’s around coal generation in the country broadly?”

Such a project has been a topic of discussion among Atlantic premiers for at least 20 years. Nothing concrete has resulted. But the now visible rate at which climate change is proceeding and some firm legislated targets around carbon may finally get negotiations underway. Ottawa is willing to offer some seed money. 

In this province, the need for more green energy is on top of what was already contracted to arrive from Muskrat Falls two years ago. It will be at least another year before that shows up but that’s not considered significant or “material” with respect to long-term planning. In the meantime, NS Power is literally beating the bushes to find temporary alternative sources that won’t increase power rates.

“Muskrat Falls Generating Station energy, which was forecast to be available in 2020, is replaced with a combination of existing fossil fuel-based resources which are mostly natural gas-based generation, additional renewable energy which is mostly biomass-based generation, and additional power imports,” said Jacqueline Foster, senior communications advisor for NS Power.

Below is the monthly MWh of NS Power electricity production from biomass, the majority being from waste bark, since October 2019:

Source: Nova Scotia Power

In Nova Scotia, woody biomass derived from both sawmills and clearcuts is classified as a “renewable” form of energy. That’s despite the fact when you cut down a tree, it can take 40-60 years to replace the carbon that escapes. 

In May, when it was obvious hydro from Muskrat Falls was going to be delayed, the McNeil government moved the goal posts from 2020 to 2022 for complying with a requirement to use renewables to produce 40% of electricity.

4. Re-invest in existing hydro facilities

These include Tusket, Mersey, and Wreck Cove in Cape Breton. The dam at Wreck Cove was built for use only during times of peak demand. Nova Scotia Power’s Annual Capital Expenditure report has budgeted $42 million for upgrades this year and more than $80 million next year to complete the multi-year projects.

5. Energy Conservation or Demand Side Management

Working closely with the electrification strategy and the provincial crown corporation Efficiency One, the report says a strategy will be developed to save or conserve an additional 75 MW of electricity by 2025. It’s cliché but true to say the cheapest electricity is what you avoid having to produce through efforts to reduce consumption. Some $120 million over three years has been allocated to Efficiency One to carry out deep refits on public housing and in Mi’kmaq communities. 

What Does the Fuel Mix of the Future Look Like? 

“With the delivery of Nova Scotia Power’s contracted hydro blocks and energy imports via the Maritime Link, imported energy displaces coal, resulting in a significant decline in coal generation relative to recent historical production,” reads the report. “The decline in coal generation continues through the rest of the planning horizon following the GHG emissions curves, gradually reducing to the model-imposed retirement dates. Wind generation and low-carbon imports (both firm and non-firm) increase to replace retiring coal and meet increasing energy requirements, making up a larger share of the generation mix. Existing renewable resources like biomass and domestic hydro maintain consistent output through the planning horizon.”

Next Steps

The just-filed “document is a starting point for discussion. Among many other things, Nova Scotia Power promises to “continue to track the installed costs of wind, solar, and energy storage to look for variations from the trajectories established in the IRP. It promises to track the ongoing development of the Nova Scotia Cap-and-Trade Program for GHG emissions, including auction results and developing regulations. So far, two years into the program, NS Power has exceeded the cap by 2-4% but the utility has until the end of 2022 to reduce emissions and states that it will be in full compliance. 

So the Cap-and-Trade program looks like a wild card in terms of system planning.

The report makes it clear the power company does not intend to participate in buying credits from other emitters once the free allowances are used up:

Under the GHG Cap-and-Trade program, Nova Scotia Power is permitted to purchase a maximum of 5 percent of the GHG allowances available for sale in any auction. Nova Scotia Power forecasts that the GHG allowances available for it to purchase will be approximately 0.1 MT annually. Although bilateral GHG trades among participants are permitted, Nova Scotia Power does not anticipate being able to trade significant amounts of GHG allowances with other participants. Due to limited GHG allowance purchase opportunities, GHG credit purchases will not be the primary means of the utility’s GHG compliance and they are not modeled in the IRP. The primary means of meeting the caps will be a reduction in generation from the existing coal-fired generating units by replacement with low-emitting sources of energy.

The report notes that because NS Power is such as large emitter of carbon, how it succeeds or fails in managing its emissions is a key variable in the pace with which the province can proceed toward a low-carbon environment.