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Well Blow Me Down!

In which we examine the wind portion of the Nova Scotia Renewable Electricity Plan.

by Miles Howe

Windmills. Sexier than coal plants any day. Photo: Miles Howe
Windmills. Sexier than coal plants any day. Photo: Miles Howe

The Renewable Electricity Plan, released by the Nova Scotia Department of Energy, is meant to be the guideline by which Nova Scotia will gloriously embrace green technologies and herald forth a newer, cleaner day.

It is a brave document with lofty goals. By 2015, the plan calls for 25% of Nova Scotia’s energy use to come from renewable sources. By 2020, that number gets jacked up to 40%. That sounds nice.

But the REP is also fraught with controversy and complications. Perhaps such is the nature of attempting to wrestle control of power production and distribution from a privately-run monopoly like Nova Scotia Power Inc., which controls 95% of the province’s power demands. NSPI, with many, many millions in profits, wields a heavy interest in the REP, and the plan is ripe with inconsistencies that smack of partisan intervention. More on that later.

The REP is also, understandably, a complicated document. So-called ‘renewable’ energy is meant to come from a variety of sources, each of which presents its own unique set of circumstances and frustrations. Indeed, some tried and true sources of renewable energy, such as solar, are completely excluded from the plan. But that’s for a future investigation. For the moment, because there’s a gentle breeze blowing through the Halifax Commons, and because we have to start somewhere on this, let’s examine that most blustery form of renewable energy...wind.

Energy from wind does play a role in the REP, but it is a strange role indeed. The document allows for 100 Megawatts of distribution of energy from COMFIT projects. Most experts believe that this is a timid, teensy-weensy, baby step in the right direction, and that the potential amount of easily captured renewable energy is at least twice that.

“If that’s all there is for the program...that’s not much.” Says Paul Gipe, the famous Californian wind-guru. Gipe gave expert testimony before the Utility and Energy Review Board when the REP was being revised. “I suppose it’s better than nothing, but you in Nova Scotia, you need work, you need jobs, and you need to close your coal-fired power plants.”

COMFIT, or COMmunity Feed-In Tariff, is itself a strange notion, by which only very specific definitions of the term ‘community’ are even allowed to participate in the joy of getting paid to feed NSPI’s grid with green energy. Municipalities can do it. Universities can do it. Aboriginal groups can do it. Coops can too. I can’t do it by myself though. The justification behind this investor ‘handcuff-ery’ is that COMFIT will ensure that investors are local Nova Scotians. From here, b’ye.   

It sounds nice, and brings to mind lobster rolls, tall ships, and kilted Cape Breton girls doing a jig. Local, community-owned, windmills, powering the town...what could be better? And perhaps if that’s all there was to it, nothing could be better. But, that’s not all there is to it. Not by a Bluenose.

COMFIT projects only amount to 1/3 of the 25% renewable energy that the REP claims will power Nova Scotia by 2015. Another 1/3 of comes from the ‘Renewable Electricity Administrator’, which is a consulting company from Massachusetts. They’ll be the ones responsible for ‘independently evaluating’ independent power producers.

The final 1/3 comes from ‘Requests for Proposals’. RFPs, or ‘competitive tenders’, are put forth by NSPI, and get gobbled up by big-time investors, often not from here. RFPs have a notoriously high failure record, across the board historically almost 50%. The reasoning behind including RFPs as part of the Renewable Energy Plan has left many green energy experts scratching their collective noggins.

“I think a lot of renewable energy analysts were wondering, when Nova Scotia came out with the revised Renewable Energy Plan, was why they continued to give competitively-tendered wind the majority of the share of projects to be developed.” says Toby Couture, a renewable energy expert, who also gave advice in front of the Utility and Energy Review Board. “(RFPs are) a very closed-door affair that shut out a lot of community investors. The logic is that ‘big dogs eat first.’”

So, the big dogs get the big wind, and the community projects get a little wind. And if that’s all there was to it, still, that might be alright. Little dogs are satisfied with a little wind, and plus, there’s that old economic multiplier effect. For every dollar spent on community wind projects, well, that money stays in the community, and builds the community, and powers the community! Be happy with what you got! Right? Almost, but there’s still more...

COMFIT wind projects get a guaranteed Feed-In Tariff by Nova Scotia Power. For every kilowatt of energy they produce, they get money, and that guarantee gets locked in for 20 years. Sweet, no?

But this is a very delicate rate to set. You want to attract investors with a guaranteed rate that gives a return. But, you don’t want to price wind power out of the game either. Because, at the end of the day, most Nova Scotians get a bill from Nova Scotia Power, and on that bill is exactly how many kilowatts of largely dirty coal-derived energy you used, and how much each kilowatt cost. My power bill says I owe about 12 cents per kilowatt I used last month.

If nice, green, wind power, cost about that much, or maybe a little bit more, I’d be prepared to pay for it. If nice, green, wind power, cost a whole lot more, and my power bill went through the roof, and I had to decide whether to keep food on the table or turn the lights on (which is already a reality for many), then I’d probably like wind power in theory, but not in practice. Delicate.

Many wind experts, Gipe and Couture included, recommend a linear graph approach when figuring out a Feed-In Tariff rate. Small wind projects cost more, and need a higher rate of return on the energy produced to make them attractive to investors. They also don’t produce much energy, so the higher rate of return offered by the power distributor doesn’t really impact the end-bill payer too much.

Gipe recommends a system of ‘tranches’, where projects that generate, say, from 30-50 kilowatts, get paid a certain amount for the energy they produce. Projects that generate 51-75 kilowatts would get paid a bit less, and so on and so on. So that by the time you get to big-time wind turbines, generating many Megawatts of power, the rate of return isn’t much more than what you’d pay for dirty coal on your power bill. We’d go green, and you wouldn’t notice the pinch to your pennies. And everybody’s happy, mama nature included. Couture recommends a sliding scale, with points on the graph, but it’s essentially the same notion.

Lo and behold, then, when the Department of Energy decided to forgo the advised logic, and draw a fixed line in the sand on rates of return. Projects under 50 kilowatts get about 45 cents per kilowatt hour (Waaay more than we pay now!), and projects over 50 kilowatts get about 13 cents per kilowatt hour (about what Nova Scotian’s might be comfortable in paying for green energy). The repercussions of this approach are numerous, and not very good.

“The tariff for small wind is really high.” says Couture. “That’s 4 times higher than the Nova Scotia residential rate. One concern was that communities that may want to build a 500 kilowatt project can’t then just buy a 500 kilowatt turbine because they won’t be able to make it profitable at the tariff that’s designed for 1.5 Mw turbines...So you’ll end up having clustering around the 50 kilowatt turbine market. What you’ll end up seeing is communities developing five, 50 kilowatt turbines, instead of developing one 250 kilowatt unit...that project is going to be there for 20 years, and that difference is not negligible. Basically the province has set itself up to lock in a whole bunch of 45 cents per kilowatt hour contracts that are going to be sold to the grid, to Nova Scotia’s ratepayers, for two decades.”

Uh-oh. Something’s gone wrong here. Jaime Baillie, the leader of Nova Scotia’s Progressive Conservative Party, agrees.

“The NDP’s renewable electricity plan says that Nova Scotians will have to bite the bullet on renewable electricity, and pay more.” Says Baillie. “The way that we are being told to bite the bullet is through higher electricity prices...(But) people will turn their backs on a plan if it is unaffordable or non-sustainable, and that’s my big worry. And if we want to protect the environment and have greener energy, we have to involve Nova Scotians in those decisions. And so far those decisions have been made by NSPI and the NDP together, and all we’re being told is to bite the bullet. But we’re not being told how big a bite or how big a bullet. And that will put renewable policy at risk in the long run.”

So, a line in the sand where the small projects that are 50 kilowatts get a nice piece of the pie, while the projects that are over 50 kilowatts get a not-so-nice slice. And this runs counter to expert advice that predicted this policy was no good.

Hmmm...Illogical behaviour, which runs counter to the general advice, and suggests a great benefit to whoever might be producing and selling 50 kilowatt turbines, and a detriment to most everyone else.

I smell a good ol’-fashioned, Nova Scotian, controversy!

Turns out that the only 50 kilowatt turbine that meets the specific requirements of the REP, which relate to wind-swept area, are manufactured right here in Nova Scotia, by Seaforth Energy! What luck! That’s great for Seaforth Energy (you might want to buy stock), but not so good for the rest of us, who are not Seaforth Energy.

Dan Roscoe, from Scotian Windfarms, is not Seaforth Energy. He was going to use the other 50 kilowatt turbine (from Quebec, gasp!) in his project. That turbine was excluded from the 45 cent per kilowatt return rate because it's rotor blade size was 9 metres, rather than 7 metres, and made it too efficient (?!). He’s understandably not happy with what he perceives to be a sweet-heart deal to Seaforth.

“We had significant plans in place for the 50kw class based on previous drafts of the directives that allowed for both turbines above 200m swept area and below 200m swept area.” says Roscoe. “So we had a program in place that would have seen approximately $16 million worth of business put together over the next two years through this 50kw program. All of that, essentially, has been lost. By changing and restricting the types of turbines that can participate in this program, at the last minute, we will not be able to find a financial partner, or the appropriate site, to continue in this program at all.”

Bummer. 

But wait. Couldn’t this be kind of a feel-good story in disguise? Maybe Seaforth will one day become a huge Nova Scotia success story. Maybe one day we’ll all gather round the table and talk about when Seaforth was just a little upstart, that just so happened to receive millions in Nova Scotia Research and Development money, and then just so happened to have a sweet COMFIT price for 50 kilowatt wind energy fall into its lap, and look at it now, at the top of the world turbine manufacturing game. A true local company done good!

Might be, b’ye. But for the moment, there’s a lot of sideline grumbling going on. Many see the provisions in the wind COMFIT section as kind of, well, unfair. Not to mention potentially costly to rate payers, which makes the whole policy look really unattractive. I mean, come on! Wind power is supposed to be sexy!

“(The Department of Energy) really can’t justify it in any logical way, and that’s the only reason that people assume that they’re giving a favourable market to (Seaforth), that the province has invested in.” says Dan Roscoe. “Personally I think it’s a lack of understanding of feed-in tariffs...it’s not even sure if any turbines are going to be eligible under these regulations. It’s a complicated issue, but they’ve managed to mess it up royally, to be frank.”

Jaime Baillie’s not happy either.

“(The NDP) have written the rules surrounding wind in such a way that...will discourage small developers from investing in wind power, and it will discourage competition, which would keep the prices down (for ratepayers).” says Baillie. “Without that sliding scale, very few developers will be able to build wind generators under 50 kw, which is where most of the activity can occur. Now they were warned about this, and they chose to ignore the advice of industry experts and go ahead with their own schedule, and I don’t understand why...We have to meet two goals; Creation of private investment in wind; and set a feed-in tariff that encourages that investment and also is affordable for Nova Scotians. And they have managed to accomplish neither one.”

Ouch.

But take heart, Nova Scotians. The REP is a living, breathing, document. Meaning that she’s subject to reviews every 18 months. If we were to all get excited about windmills, and become desirous for a more transparent plan in which our input was taken to heart and listened to, well, we might just change this whole thing for the better.

Paul Gipe, the California wind-guru, suggests that we start by looking to Ontario (another gasp!).

“This is always a problem for Canadian provinces,” says Gipe, who reads us like a book. “I think it’s even worse than here in the US...because you like to think that you’re different than them. But Ontario has a pretty good program. Not the best in the world, but pretty good.”

What’s so good about it, Paul Gipe?

“First of all there are no limits on it.” says Gipe. “In Ontario, farmers qualify. Now I don’t know what the Nova Scotia government has against farmers in Nova Scotia. Maybe you don’t have any. But you still have an agricultural school. So you must at least think you have farmers. And particularly, why does a social democratic government...what do they have against farmers?”

So what should we do, Paul Gipe?

“If the government doesn’t act to start the consultation, the people should do so. The people should organize in their communities across Nova Scotia...to talk about how they would like the COMFIT program changed. And they can invite the government if they like. Maybe they don’t want the government to come. Maybe they want to do this themselves and when they’re finished, go to the government and say, ‘We the people of Dartmouth have had a meeting and we shouted at each other, but we all sat down and we agreed that you need to change the program and do it this way.’”

So a COMFIT-based revolution. Who’s in?

Be sure to tune in next, when we examine the REP's non-existant solar component! Waiting for the sun, indeed.


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Topics: Environment
2479 words

Comments

Hi Miles, just read your

Hi Miles, just read your article and it's very interesting. Puts things in perspective and I would love to learn more about the challenges small wind faces.

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