Energy and Mines Minister Derek Mombourquette announced last week the province intends to “eventually retrieve” the abandoned 1,000-tonne, five-storey turbine abandoned at the bottom of the Bay of Fundy near Parrsboro.
“Eventually” is the key word in that sentence since there is no timeline and no obvious financial means to pay a salvage bill estimated to cost at least five or six million dollars based on two previous deployments of the same turbine design.
The turbine is owned by Cape Sharp Tidal, a joint venture between OpenHydro (80% interest) and Emera Inc. (20% interest).
Emera Inc. withdrew from the partnership after the parent company of OpenHydro, Naval Energies, pulled its financial support three days after the turbine began operating last July. Naval Energies was owed approximately $260 million. The turbine is not working and Minister Mombourquette says FORCE, the Fundy Ocean Research Centre for Energy funded by the province to manage the tidal demonstration site at Minas Passage, continues to do environmental monitoring at the site.
Atlantic Canadian companies hired to assist with the storage, maintenance, towing and deployment of the massive, doughnut-shaped turbine are owed close to $6 million.
A decision by OpenHydro lawyers to give up seeking protection from its creditors and to file for bankruptcy in Nova Scotia Supreme Court was the trigger for the Energy Minister’s declaration that the Province is revoking Cape Sharp’s licence to the berth it occupies at the Minas Passage demonstration site. According to Minister Mombourquette, this gives the government access to the $1.02 million bond or damage deposit Cape Sharp put up when it leased the berth.
The Energy Minister acknowledges that amount won’t go very far toward the retrieval of the orphaned turbine. He says the decision to revoke Cape Sharp’s licence allows the province to lease the berth to a new tidal developer.
Of course the OpenHydro turbine would have to be removed if that was successful. Mombourquette says while a new player would “not necessarily” have to contribute financially to the salvage operation, the province’s “eventual” plan to lift the OpenHydro turbine consists of “looking for a solution that would involve the private sector.”
There are currently four other tidal developers leasing four other berths from FORCE in hopes of one day being ready to test their turbines in the harsh environment of the Bay of Fundy. None of the four have scheduled deployment dates at this time.
The berths are held by companies from around the world who partner to share the risk and costs which generally run into the tens of millions of dollars to design and develop different technologies. Some of these prototypes are currently being tested off the British Isles. DP Energy holds two berths, the Minas Tidal Limited Partnership holds a third, and Sustainable Marine Energy headquartered in Edinburgh is paying for a fourth berth at the demonstration site. The fifth remains occupied by Cape Sharp.
This winter, Sustainable Marine Energy (SME) Canada has been testing its tidal technology in the calmer waters of Grand Passage outside the town of Digby. Its “eventual” plan is to test at the demo site in Parrsboro. SME managing director Jason Hayman compares the company’s incremental approach to tidal development “to climbing the foothills before scaling Mount Everest.”
Schottel Hydro of Germany is SME’s main shareholder. The technology operating in Digby is very different from OpenHydro’s. Instead of a large turbine resting on the ocean floor, SME uses a floating platform equipped with four SIT250 tidal turbines supplied by Schottel.
The Halifax Examiner emailed Sustainable Marine Energy to ask if the company would be interested in contributing to a private sector solution to help the provincial government retrieve the turbine abandoned by the insolvent Cape Sharp Tidal Venture.
“We would not consider contributing to the costs of removing the OpenHydro turbine,” replied Jason Hayman, managing director of SME. “This is the responsibility of the entities that put it there. Asking pre-revenue, R&D companies, such as ourselves who are developing solutions in a technically, socially and environmentally responsible manner to shoulder the cost of mistakes made by large industrial companies who are trying to avoid paying for them is not very logical.”
Hayman went on to say that the failure of the OpenHydro/Emera joint venture is likely to have a financial impact on the four other berth holders at the Fundy demonstration site.
“You should also be aware that besides paying a decommissioning bond to the Province prior to deploying tidal devices, berth holders are also required make a substantial capital contribution to FORCE (Fundy Ocean Research Centre for Energy) upon securing a berth. In our case this was $1million, and the berth holders also share the ongoing operating costs of FORCE. Therefore it is quite likely that we will be impacted financially as there will be one less berth holder to share these costs until a new entrant is found.”
Sounds as if FORCE could be forced to trim its operating budget if it wants to retain existing tenants. And it appears that Berth 5 will remain occupied by a broken turbine unless and until a new tidal developer volunteers to pay toward its retrieval.