Premier Iain Rankin has staked his political future (and perhaps that of his Liberal party) on a promise to green the grid. It’s a promise that combines huge expectations and devilish details.
On his first day as premier, and again in the throne speech, Rankin committed to shutter coal-fired generating plants by 2030. He has also stated that all provincial government departments will operate on renewable energy sourced within Nova Scotia by 2025. This mirrors a Memorandum of Understanding Nova Scotia signed with Ottawa in 2019 that would enable all federal departments (think the dockyard, Canadian Forces Bases Shearwater, Stadacona, Greenwood, and Fisheries & Oceans) to switch operations from fossil fuel to renewables by the end of 2022.
These are aggressive timelines aimed at reducing Greenhouse Gas (GHG) emissions by 53% from 2005 levels by the end of this decade and making Nova Scotia the first net-zero province in Canada by 2050.
Of course, “net zero” can be reached with some interesting and questionable accounting. Consider Rankin’s support for the proposed Goldboro LNG plant, which if built, by itself would increase Nova Scotia’s GHG emissions by 18% above 1990 levels. That actual-world increase can be accounted away as a theoretical-world decrease by assuming that the natural gas processed at Goldboro will be used in generating plants in Germany, which would otherwise burn higher-GHG-emitting coal. Therefore, the logic of carbon trading holds, even though there’s a global increase in GHG emissions, Nova Scotia gets to count it as a decrease in emissions. It’s a logic roundly critiqued by energy experts, but Rankin defends it.
But that issue aside, how does Rankin intend to meet even the promise to green the provincial electrical grid? To get from a carbon-dependent Here — with coal, oil, and natural gas generating more than 70% of our electricity — to a green There?
One key answer — besides importing hydro from Labrador and potentially building another transmission line at the New Brunswick border to import hydro from Quebec – is the Green Choice Program.
“The Green Choice Program will enable large energy users in Nova Scotia to enrol and have renewable energy procured on their behalf to meet their energy needs and climate change goals,” states a February 24 news release from Rankin. The release also committed $19.5 million for housing retrofits and rebates for electric cars, and promised, “The Green Choice program will also drive new renewable energy investments in Nova Scotia.” Those expenditures could lead to the installation of new wind farms adding up to 350 MW of electricity to the grid.
But when you so much as whisper about electrical energy in Nova Scotia, the elephant in the room is the province’s privatized, regulated monopoly, Nova Scotia Power.
More than a year ago, the government initiated a sea change by changing the Electricity Act to allow large energy users (governments, municipalities, First Nations, universities, hospitals, and large corporations) to buy renewable, locally generated energy from producers other than Nova Scotia Power. Examples would be independently owned wind farms, perhaps large-scale solar arrays, and small instream tidal projects like the one installed at Grand Passage, Digby County. This tackled Nova Scotia Power’s perpetual conflict-of-interest when negotiating with smaller competitors who threaten to siphon off some of the utility’s best customers and profits to its shareholders.
To change the imbalance in negotiating clout, the province advertised for an independent “renewable Energy Procurement Administrator” to design and manage the process. On December 23, 2020, it announced it had hired CustomerFirst Renewables of Maryland for a three-year term at what is still a yet-to-be determined price (we’ll get to that shortly).
CustomerFirst has a 10-year track record in the US and has helped companies such as Wells Fargo, Corning, and George Washington University Hospital purchase homegrown sources of renewable energy to replace oil and natural gas.
How much interest has the legislative change created? CustomerFirst’s senior director of business development is Susanne Fratzscher, a Canadian who has consulted for a Canadian bank and Dalhousie University. Fratzscher told the Halifax Examiner she was “blown away” last month when nearly 300 potential customers and independent power producers in Nova Scotia attended webinars outlining the Green Choice Program (GCP). You can read more about the program here, under the “resources” section of the link.
The myth of high green energy costs
Fratzscher said “it’s a myth” that electricity generated from renewable sources costs more than coal or fossil fuels. She referenced a 2020 study by Lazard Asset Management that shows the life-cycle costs of wind and large-scale solar arrays now compare favourably with coal, oil, and natural gas in the United States.
“Electricity transition is very much dominated by what the utilities are doing,” noted Fratzscher, “and large corporate and institutional buyers are raising their voices saying, ‘I would like to have green power’ in provinces and states where this is not yet the case. They are a change agent asking for more green energy, and these green tariff programs and the appointment of an administrator are a way to enable this.”
Despite the initial enthusiasm for this brave new world of green power, Fratzscher said the province must limit the Green Choice program to large buyers or it will become “unmanageable.” Subscribers must buy a minimum of 10,000 MWh a year, a purchase slightly larger than what Saint Mary’s University consumes. Some municipalities, large hospitals, and manufacturing plants would qualify for a ingle “subscription.” Others, such as the federal and provincial governments, may consolidate the load from several departments (or buildings) to total a minimum of 10,000 MWh per subscription.
Here’s another example provided by CustomerFirst:
A fictitious “Tom Norton’s” coffee chain has 34 locations in the province with separate meters, each averaging roughly 500 MWh per year. It is eligible if it aggregates all 34 meters to 17,000 MWh and intends to purchase 60% of electricity via Green Choice Program (= 10,200 MWh).
The Green Choice Program assumes that by the end of 2022 (when all that overdue hydro from Muskrat Falls is now slated to arrive), 40% of electricity used in Nova Scotia will already come from renewable sources. Large electricity consumers interested in switching or “subscribing” to renewables must file an Expression of Interest with the administrator outlining how much they want to buy. The cost will show up as a separate line on their power bill.
One of Green Choice’s selling features is subscribers will never pay a carbon tax.
GCP customers will be responsible for paying the full cost of the energy produced by their share of the renewable assets sourced under the GCP program and any integration fees associated with the cost of the new renewable energy projects to the electrical grid. GCP customers may no longer be subject to any non-renewable energy components of their bill or any current or future carbon taxes. The GCP program costs are expected to be competitive with a customer’s current electricity costs.
After CustomerFirst receives subscription orders, it will issue a competitive Request for Proposals to companies interested in building and supplying new sources of “low-impact renewable energy.” Once CustomerFirst approves the suppliers and their prices are authorized by the Utilities and Review Board, Nova Scotia Power will sign purchase agreements to buy green power from small-scale producers. The utility will also sign separate contracts with corporate, institutional, and government subscribers who agree to buy green power from the grid at a fixed cost for a period of five to 25 years.
“With that, the project developer has the ability to finance the project and then to start the construction,” said Fratzscher. “Construction will take some time, but it’s our hope that with this extensive engagement process and hearing everyone’s voice, Nova Scotia will be able to set an exciting example for other Canadian jurisdictions.”
Major installations of renewable power aren’t expected for another couple of years. The Rankin government must also pass regulations this legislative session defining subscriber agreements. Here is the timeline proposed by CustomerFirst:
- Mid-June, 2021: Administrator receives Expressions of Interest from potential subscribers about the volume of energy they want to buy.
- Mid-July, 2021: Administrator issues Requests for Proposals to independent renewable energy producers, looking for quantity and price, to be selected by CustomerFirst and reviewed by the UARB.
- Mid-November, 2021: NS Power signs purchase agreements with independent power producers that have been reviewed by UARB. Subscribers to Green Choice sign agreements with NS Power to purchase locally sourced renewable energy.
- 2022-2025: ETA or target delivery dates for renewable power to Green Choice customers. This is based on the construction and installation of additional wind farms, new larger-scale solar arrays, and potentially new in-stream tidal and biomass projects.
Which shade of green, though?
The Electricity Act currently defines wind, in-stream tidal, hydro, and biomass as “low-impact renewable energy” sources. With the legislature in session, it will be important to see whether Rankin will amend the existing definition to exclude woody biomass. Numerous environmental groups have expressed outrage that trees are being used to generate electricity when they could be storing carbon to slow climate change. Allowing new and additional projects under the Green Choice label to include burning wood would rub salt in that festering wound.
Earlier we noted that the province hired CustomerFirst Renewables for a three-year term that ends in 2023. Asked by the Examiner how much the company is being paid, Fratzscher said the amount would depend on how much work is involved and would be calculated at the end of the contract. She referred the question to the Nova Scotia Department of Energy.
“CustomerFirst Renewables is providing consulting services to government on the program,” replied Michael Noonan, communications director for the Energy Department. “The total value of the contract won’t be known until the work is completed.”
If you’ve already thought, “the more things change, the more they stay the same” in Nova Scotia, you’re not alone. Nobody expects CustomerFirst to do the job for free; nobody expects a dollar figure now; but why the reflexive secrecy about the formula for how it will be paid?
If this procurement follows the pattern of previous Requests For Proposals for wind and tidal power, the administrator will submit their billable hours to the Department of Energy. The UARB will then review the bill and send it to Nova Scotia Power, which will recover the cost from ratepayers.
Nova Scotia needs an umpire like CustomerFirst to set the rules and ensure the process is fair. The fee shouldn’t be the subject of a Freedom of Information request, or an embarrassing saga like the Yarmouth ferry, in which the province spent public money fighting unsuccessful court battles to suppress what should have been public information from the get-go.
From local renewable energy producers to our biggest businesses, many Nova Scotians are hoping Green Choice will be a transformational program to help wean the province off coal and other fossil fuels and create hundreds of new jobs in the process. Just allow it some oxygen.
I have no trust in NSP. When they made IKEA dial back their production of solar energy that was the wake up that they are not invested in anything they can’t make money in..
Great news to have a Premier who says he wants to reduce GHG emissions and shut of coal sooner but how does this mesh with the NSPI plan to build Natural Gas plants as an interim “clean” measure? Or Rankin’s support for the Goldboro LNG plant that wants almost a billion dollars from the feds? (And that would import fracked gas to a province that has a moratorium on fracking.) Or Heritage Gas’s plan for Blue (BS) Hydrogen a child of the fossil fuel industry? What ever happened to something so simple as a feed-in-tarif programme that would allow everyone to participate in the building of renewable energy? A billion dollar revolving fund would go a long way to bank-rolling that.
Addressing climate change is possible but Canada’s hodgepodge of contradictory climate policy has left us in the dust (& air pollution). We are the ONLY G7 country that has increased its GHG emissions instead of meeting targets. Nova Scotia’s equivocating is leading to the same mess. We act like reducing GHGs can be done by having it both ways. Another example? Efficiency NS has done a great job of reducing energy use in buildings but meantime Nova Scotians and Canadians drive the WORST vehicle fleet in the world for fuel efficiency. Perhaps new Scotland can take a lesson from old Scotland which is generating 97.4% of its electricity from renewables almost meeting its goal of 100%with wind and solar, no coal and a single under-utilized gas plant that is slated for closure. I believe Nova Scotians and Canadians really want to and really can do better. What’s up with the political equivocation?
Ugggh, I read so much of the article with hope in my heart. Then I hit that biomass part..
This seems like an overly-complicated way of going about things. Yes, NSP has a conflict-of-interest, but the NS Gov previously got around that by mandating a set percentage of renewables. NSP had to comply. It worked. We got a ton of new wind turbines in the province and we got power from Muskrat Falls. We are going to hit those mandated targets.
Now, instead of just setting new targets we’re going to get into some bureaucratic accounting exercise because of government belief that we need to use “market forces” to make this happen. News flash: a convoluted government program does not a market make. Government should use the one real effective tool it has at its disposal, and that is the ability to set laws.