If implemented as proposed, Nova Scotia will be the third province to use feed-in tariffs to develop renewable energy. Prince Edward Island, another Maritime Province, has had a simple feed-in tariff for several years, and Ontario, Canada's most populous province launched its successful program last fall.
The government's Renewable Electricity Plan proposes building 300 MW of new renewable capacity by 2015 in three equal tranches: one for the provincial utility, one for independent power producers, and one for community-owned projects. Significantly, the plan proposes reducing coal-fired generation from 75% of supply to 40% of supply by 2020.
The Nova Scotia plan includes the following key features:
• 25% renewables by 2015 in statute
• 40% renewables by 2020 (aspirational)
• Cut coal consumption from 75% to 40% of supply by 2020
• 100 MW transmission-connected set aside for Nova Scotia Power
• 100 MW transmission-connected set aside for RFPs
• Community-based, distribution-connected target of 100 MW by 2015
• No cap on community-based program
• Feed-in tariffs based on "cost recovery"
• Feed-in tariffs for wind, hydro, tidal, wave, biomass, combined heat & power
Solar is not included in the program. Solar PV will qualify for net-metering but at Nova Scotia's low cost of electricity. Coupled with the absence of subsidies in Canada, net-metering will prove ineffectual.
Though there is no cap on the COMFIT program, the province has set a 100 MW target to monitor progress. The feed-in tariffs will be reviewed in 2012 to determine if the program is robust enough to meet the target.
Small businesses operating through Community Economic Development Investment Funds (CEDIFs), says the report, will also be eligible to receive the COMFIT payments.
Rooted in the community
One glaring omission in the report's description of the program is mention of individual farmers. Ontario's program specifically includes farmers and farmers qualify for Ontario's community-wind bonus of $0.01 CAD/kWh. However, the Nova Scotia report says the precise definition of what qualifies as "community-based" has not yet been determined. The purpose of limiting the feed-in tariffs to community-based projects, says the report, is "to ensure that projects are rooted in the community and investment returns remain there." By that description individual farmers could be included.
The report is not as timid as feared by renewable energy advocates, but it is not as aggressive as Ontario's current program. Nova Scotia's proposal, as a careful compromise among competing interests, is not unlike Ontario's first attempt at a feed-in tariff, the Standard Offer Contract (SOC) program. The SOC program gave Ontario experience with feed-in tariffs and exposed the weakness of a timid approach. Ontario revised the policy as a result.
Renewables generate 11% of electricity
Renewables, mostly hydro, currently provide the province with 11% of its electricity. 300 MW of new wind capacity could generate about 600 million kWh per year or nearly 5% of Nova Scotia's 12 TWh consumption.
NSP will submit its projects to the Utility and Review Board (UARB) as in current policy. Independent power producers will submit proposals to a new agency, the Renewable Electricity Administrator. Previous Requests for Proposals (RFPs) held by NSP have been widely criticized and led to charges that NSP was self-dealing by designing RFPs doomed to failure.
The ruling party will introduce legislation implementing the plan this spring with passage expected this summer.
Notably, the report does not spell out when the government expects the UARB to rule on COMFIT rates. The report only says that the program will be reviewed in 2012. Experience elsewhere suggests that a regulatory authority with a mandate to set rates on a set of technologies, including those with relatively little operational experience, such as tidal and wave power, could require several months if not a year or more. If that's the case, tariffs wouldn't be set until late 2011.
Wind projects typically take two-three years to develop. That would move actual projects into 2012-2013 at best and more likely 2014. The government plans to review the feed-in tariff program in 2012.
Nova Scotia's UARB, if clearly directed by the government, could follow the example set by Ontario where public hearings on setting the tariffs began before legislation passed and became law. This is possible in Westminster-style parliaments, such as those in Canada, where, if the ruling party has a majority, passage is a near certainty. This could be an early test of the government's intent to move on community power if it directs the UARB to expedite COMFIT rate setting.
Pembina, one of Canada's largest environmental groups, praised the decision. "The plan today outlines important steps to show how Canada's province that is most dependent on coal power can take major strides to reduce that dependence by using renewable power and notably community-based projects," says Pembina's Tim Weis.
"This is the type of policy that we know successfully drives renewable power development at the lowest costs," Weis adds. "In addition it enables citizens to get engaged and involved in their clean energy future - and make a profit doing so."
However, Weis cautions that "there are many important details to be ironed out, notably ensuring that community projects have access to the grid and that as many technologies are included as possible, but today's plan points the ship in the right direction."
Editor’s note: This article is a slightly edited version of an article provided by author, advocate, and renewable energy industry analyst, Paul Gipe. This feed-in tariff news update is partially supported by the Jan & David Blittersdorf Foundation in cooperation with the Institute for Local Self Reliance.
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