The Canadian province of Nova Scotia is aiming to be a leader in renewable energy by committing to generate 25% of its electricity from renewable sources by 2015 from a current level of 13%. Among the first steps to meeting this ambitious target is a new Community Feed-in Tariff (COMFIT) program to support community-owned projects using a variety of technologies and a competitive bidding program for medium- to large-scale projects. Both programs open up exciting opportunities for renewable energy developers and suppliers to participate in the greening of this Atlantic province, which currently relies heavily on coal to meet its electricity needs.
The COMFIT combines local ownership with a traditional feed-in tariff market design, offering fixed rates for big wind (projects greater than 50 kW), small wind, biomass, tidal and hydro technologies. Projects must be 51% owned by community groups including municipalities, universities, First Nations, co-ops and Community Economic Development Investment Funds (CEDIFs).
The Nova Scotia Utility and Review Board (UARB) held a hearing to discuss draft rates in early April and final rates are expected soon. Prices range depending on the perceived level of risk associated with the technology. In-stream tidal, a relatively new technology, has a high proposed rate at $0.652/kWh compared to big wind, a more established technology, at $0.452/kWh.
Big wind is expected to play a leading role in Nova Scotia’s new renewable energy mix. Under COMFIT, there are opportunities for partnering with community groups and First Nations who will be looking for expertise. The local Mi’kmaq community is currently in the process of developing its very first renewable energy strategy and is looking at potential areas of collaboration with developers and technology providers on these projects. It will be important to draw lessons from other markets including Germany, Denmark and Ontario where developers have built successful community power partnerships that have led to additional benefits for communities including job creation.
Nova Scotia’s new competitive bidding process also paves the way for more medium to large wind projects in the province. In its initial phase, 600 GWh is reserved for larger projects to be split evenly between the province’s main utility, Nova Scotia Power (NSPI), and Independent Power Producers (IPPs). The province will be appointing a Renewable Electricity Administrator (REA) to oversee the request for proposal (RFP) process. It will be interesting to see how the new RFP differs from previous tenders considering many of the projects contracted were never built because developers underestimated costs to win contracts and were unable to find investors.
Financing is expected to be a challenge but more so for the smaller-scale COMFIT projects, which may have trouble finding early-stage investment. There is a possibility the province may allow for contract bundling for these smaller projects that would allow developers to reach economies of scale and create more finance options. Canadian banks aren't interested in providing equity for smaller projects at the moment. But hopefully some Canadian banks will draw lessons from European banks that have developed tools for financing small, community-owned renewable energy projects.
Other large-scale infrastructure developments in the Atlantic region are working to support more wind energy over the long-term. The Maritime Link, a planned 500 MW transmission interconnection between Newfoundland and Nova Scotia, is expected to enhance the province’s technical capability for balancing wind and foster greater cooperation between Maritime provinces. There are also plans for a transmission line linking northern Maine to Maritime Canada called the Northeast Energy Link that is expected to provide opportunities for exporting wind power to New England states. These developments are essential for the wind industry to realize its full potential in this region that has excellent wind resources but limited domestic demand.
The opportunities for developers and suppliers in Nova Scotia will become clear over summer 2011. Clarity on the timing and details on the new RFP are imminent following the appointment of the new Renewable Electricity Administrator (REA). The Department of Energy will also open the application process for COMFIT projects following the rates announcement. Renewable energy proponents want to see these programs succeed as this will help secure the future of renewable energy in the province and potentially lead to expanding the COMFIT and RFP.
Adrienne Baker is a Director of Canadian Clean Energy Conferences which is organizing the Nova Scotia Feed-in Tariff Forum on September 21-22 in Halifax.
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