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Nova Scotia's Neo-Liberal Energy Policies

Blog posts reflect the views of their authors.


Let the wise invisible hand of the free market get us out of the predicament of the triple threat (climate change, peak oil, and natural resource depletion).  This is the premise behind the newly unveiled Renewable Electricity Plan that the Nova Scotia Department of Energy has put forward.

The province declared back in 2001, along with all of the Atlantic Premiers, that we would cut our emissions to 10% below 1990 levels by 2010.  As of 2008, we were 9.9% higher, having increased our emissions related to electricity generation by 38%.  In 2008, 45% of Nova Scotia's emissions came from burning fuels to generate electricity.


The details of the plan

The plan proposes to dramatically increase our use of wind energy, and biomass energy to meet the target of generating 25% of our renewable energy by the year 2015.  This represents more than double the amount of "renewable" electricity that the province currently produces.  In 2009, Nova Scotia already produced 11.3% of its electricity from "renewable" sources (defined by the government as wind, hydro, tidal, biomass), and imported an additional 5.2% of it's electricity from out of province (assuming that the electricity came from New Brunswick, it may have been largely nuclear energy being imported, which is not renewable).

The impetus behind this Renewable Electricity Plan is to phase out our use of coal fired power plants in order to reduce  both greenhouse gas emissions and reliance on imported fossil fuels.  The Nova Scotia plan calls for some of the new "renewable" power to come from energy imports (draining wealth away from the province), 100 MW of new corporately owned generators (the NewPage biomass plant accounts for 60% of this), 100 MW of mainly new wind turbines owned by Nova Scotia Power, about 70 "renewable" projects owned by municipalities, first nations, and non-profits,  a new 60 Megawatt forest-burning (biomass) plant owned by the NewPage corporation, and burning forests (biomass) mixed with coal in existing coal power plants.

We need to be very careful about the term "renewable" energy, as many people assume that "renewable" energy implies low greenhouse gas emissions. sustainable energy.  This, unfortunately, is not the case.  The term "renewable" is being taken to mean any energy source that can be replenished in a short time period.  Under the definitions of the Renewable Electricity Plan, the term "renewable low impact electricity" refers to solar, wind, run of river hydro, ocean, tidal, wave, forest and farm biomass, and landfill gas energy.  Many of these technologies will not be able to contribute to averting climate change, particularly biomass.  Biomass releases roughly twice the greenhouse gas emissions that coal does, yet it is considered to be carbon neutral because the forest slowly re-sequesters the carbon as it regrows after it is mowed down by the NewPage corporation.

According to a recent study commissioned by the Massachusetts Department of Energy, forest biomass will take 21 years to have its carbon emissions re-sequestered by replacement tree stands to the point of being equivalent with coal.  This means that our greenhouse gas emissions will only start decreasing after 21 years - assuming we take coal power offline in response to the generation of biomass.  This may not be the case, as recent discussion about regional energy interdependence between New Brunswick and Nova Scotia may result in Nova Scotia building new renewable energy plants while keeping their coal plants running, thereby allowing them to export energy to New Brunswick for profit.  This, of course, would result in Nova Scotia's emission reduction targets not being met, which may seem politically expedient to the current NDP government in light of their recent astounding announcement that they are scrapping their mercury emissions targets.


Corporate giveaway

While the plan admittedly does provide a framework for small amounts of public ownership at the municipal, non-profit, and First Nations levels, it is essentially a huge giveaway to the international wind corporations and the logging industry, with very little public ownership of anything.

Corporations who want to build wind farms enter into a request for proposal process with Nova Scotia Power, under which they have to try to provide the cheapest possible project in order to get approval.  This process has resulted in many wind farm projects going bankrupt before they are even built because they were only ever approved due to their unrealistically cheap pricetag.  Nova Scotia Power then swoops in and "saves" the project by buying a 49% stake in it, allowing the corporation to once again maintain its monopoly on electricity in Nova Scotia.

The plan also maintains the current policy of limiting the ability of independent citizens to sell power to the grid for profit, thereby maintaining the stranglehold on energy that Nova Scotia Power Inc (The Emera Corporation) currently has in the province.  The so-called enhanced net metering program only allows homeowners to have a renewable energy system whose output matches the consumption of the household.  This means that only rarely will a homeowner under the program be able to sell energy to the grid, and not much of it!  Additionally, the price for the energy will be equal to the cost of electricity, ensuring that payback periods for individual homeowners remain high.

Another problem is that the plan offers no incentives for solar electricity plants, which are only marginally more expensive than wind turbines.


The roots of our austere situation

In 1992, under pressure to balance the provincial deficit, Donald Cameron's Progressive Conservative government sold Nova Scotia Power (then a provincial crown corporation) to private investors who eventually established a holding company that became the Emera corporation.

At the time, the privatization of Nova Scotia's electric utility was the largest private equity transaction in Canadian history.  The forefeiture of the public utility was surely one of the most shocking austerity measures Nova Scotians have ever faced.

The electric utility is still regulated through the Utility and Review Board, however this does little to ensure the best interests of Nova Scotians since their mandate is to ensure Nova Scotia Power stockholders are guaranteed a 10% return on investment, while ensuring the cheapest short-term electricity prices for the public.

In other words, whatever electricity policy is the cheapest is the policy that wins since all capital expenses are passed on to the customer while maintaining Nova Scotia Power's mandatory 10% profit margin.  To be clear, this means that if the government has to choose between a plan that quickly and deeply reduces greenhouse gas emissions and a plan that simply limits the year-to-year price increase of electricity in Nova Scotia, the lower price electricity option always wins.

Case and point: the government announced yesterday that they are scrapping their commitment to lower mercury emissions in Nova Scotia, a plan that would have meant burning more expensive, less polluting coal in Nova Scotia power plants.  The goal of reducing mercury emissions in NS coal plants has been in place since 2000, however Nova Scotia Power Inc. decided to wait until the last minute to try to implement a change in fuel supply, which resulted in their needing to ask for an estimated 6% increase in residential rates.  The predictable public backlash against a rate increase pressured the Energy Minister to delay implementation of mercury emission reduction by 4 years; now the target is for 2014 instead of 2010.  Nova Scotians have decided they would rather keep poisoning their environment than pay a few extra bucks for electricity, and by the same token Nova Scotia Power has decided they would rather maintain their profit margins rather than to stop poisoning Nova Scotians.

Meanwhile, Nova Scotia continues to have the highest cancer rates in Canada.


"Protection" of the electricity consumer in Nova Scotia

Every decision undertaken by Nova Scotia Power, the Department of Energy, and the Utility and Review Board have one thing in common: they attempt to "protect" Nova Scotians by limiting the price increases of electricity from year to year.

This is a ludicrous way to plan for a carbon-free energy future in the context of catastrophic climate change.  The interests of Nova Scotians are best served by reducing the long term prices of electricity; not simply by delaying rate increases from one year to the next.

Unfortunately, since Nova Scotia Power is guaranteed a 10% return on investment, citizens in the province refuse to pay more to emit less, even though it will save them money in the long term.  This is because any proposed rate increase is always met with the public reaction that Nova Scotia Power should reduce its profit margins before it increases rates.  In effect, Nova Scotian's are holding themselves hostage to fossil fuels by not agreeing to rate increases, because they know that Nova Scotia Power never experiences "rate increases" (decrease of profit margin) of their own.

Of course, there are alternatives that could and should be used such as making those who use the most electricity bear the brunt of rate increases.  This would encourage the big users to decrease their electricity consumption, while protecting poor and low-income citizens.  But given the evident pro-elite agenda of the government, it seems highly unlikely that such a progressive rate framework would ever be adopted.


Emissions aren't just about electricity

Currently, only 20% of  Nova Scotia's energy demand is met by electricity, while 80% is met by furnace oil, natural gas, and gasoline.  Heating our homes and buildings with oil and natural gas is responsible for 14% of our emissions, and transportation is responsible for another 25.7%.

The Department of Energy's Renewable Electricity Plan therefore precludes discussion on the emissions related to 4/5 of our energy supply.  This supply emits 2/5 of the provinces emissions.

In the case of transportation emissions, the province's Climate Change Action Plan stipulates that the Department of Transportation and Infrastructure Renewal will be responsible for developing a Sustainable Transportation Plan at some point in 2010.  This is a flawed way to go about effecting emissions reductions in the transportation sector because clearly there is a large role for decentralized renewable energy to play in powering plug in hybrid electric vehicles with the intermittent supply that wind and solar technologies provide.  This is one reason why the Department of Energy should scrap its flawed, elitist renewable electricity plan, and release a new Public Sustainable Energy Equity Plan that encompasses provisions for electricity, transportation, and heating sectors.

On the heating side of things there are many opportunities as well.  Most of the energy generated by thermal plants (coal, biomass) is wasted through heat losses to the environment.  In most cases, the waste heat is simply pumped away as warm water, which could be better used to provide heat for a district heating system, thereby reducing the need for the use heavy oil in our home furnaces.  Wind energy is also an excellent way to power an electric hot water heater, which can store the energy of the wind in the form of heated water in a tank, negating the need for batteries or a grid connected turbine.

The plan is fundamentally inadequate in that it fails to address the extremely high potential for cutting greenhouse gas emissions that an integration of renewables with heating and transportation sectors represents.

Or, we could just burn our forests, perpetuating our unsustainable resource extraction life-support economy.  Our choice.

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