Tagged: Hydro Quebec

Six things the NDP did right – part 2

Here is the final instalment of my four posts on the NDP government’s mistakes and successes. Mistakes here and here. Successes, part one, here, part two below. Between now and election day, I’ll post a selection of reader responses, more of which are always welcome.

4. Wilderness protection

protected-lands

Two hundred years from now, few Nova Scotians will know whether the provincial government balanced its books in 2013, or how much power rates increased between 2009 and 2013, or even who Darrell Dexter was. But they will know that a significant amount of Nova Scotia’s spectacular wilderness areas was permanently protected for the benefit of people and wildlife.

Building on a foundation laid by Mark Parent, environment minister in the Rodney MacDonald government, the NDP has taken Nova Scotia from a mediocre record of wilderness conservation to a position of national leadership.

The Protected Areas Plan for Nova Scotia, released in August, capped several rounds of public and stakeholder consultations to identify lands worthy of protection. It increased the total percentage of protected lands in the province from 9.4 percent (second lowest among Canadian provinces) to 13 percent now (second only to British Columbia, at 14 percent). The total will grow to about 14 percent as new sites are protected over the next few years. The newly protected lands include 700 kilometres of coastline and about 2600 lakes and watercourses.

The plan won praise from the Canadian Parks and Wilderness Society, Nova Scotia Nature Trust, the Assembly of Nova Scotia Mi’kmaq Chiefs, the Nature Conservancy of Canada, and the Ecology Action Centre, whose wilderness co-ordinator, Raymond Plourde, lauded the government for “hard work and steadfast support for conservation.”

Extending the percentage of protected areas to 14 percent of the province assumes the government to be sworn in next month will continue the plan. The Liberal Party platform [PDF] says the party “support(s) the protection of land,” but at least one Liberal candidate, Lloyd Hines, running in Guysborough, has called for a halt to further land protection.

The Mining Association of Nova Scotia accused the government of putting future economic growth at risk by permanently protecting land from economic use. It will lobby the incoming government to allow land swaps, so mining and quarrying companies can access the protected land.

5.  A five-year highway plan

For decades, Nova Scotia governments have tried to control budget deficits, some more successfully than others. Nova Scotia has another kind of deficit we rarely hear about: a highway infrastructure deficit. The province has about 23,000 km. of roads, and for years, we’ve been wearing them out faster than we fix them.

Paving and politics are deeply entwined, which means road construction and maintenance decisions haven’t always reflected objective criteria. The Dexter Government took several useful steps to arrest and begin reversing the decline of our highways:

  • It produced and published a five-year plan for highway and bridge maintenance and construction. The plan’s annual updates are readily available on the Department of Transportation and Infrastructure Renewal website. Four instalments have been produced so far. They are not perfect. They are vague about the timeframes for multi-year, 100-series highway expansion projects, but they represent a big improvement over plans drawn up on a napkin in the minister’s back pocket.
  • The province improved its criteria for maintaining paved roads. In the past, when paving decisions weren’t based on pure politics, they were prioritized on a worst-first basis. Roads in the worst condition got paved first. This sounds logical, but it ignores a key fact about highway engineering. At a certain point in their lifespan, paved roads begin to show signs of deterioration. If early steps are taken to repair the damage—by sealing cracks, applying a mixture of stone chips and asphalt, micro sealing with a thin layer of asphalt, or applying a single layer of asphalt—major reconstruction can be delayed for several years.
  • The Dexter Government took two bold steps to rectify the costly consequences of non-competitive bidding on major highway jobs. It purchased a paving plant and deployed it in rural counties where a lack of competitive bidding led to construction costs that were much higher than in neighbouring New Brunswick. The government established a provincial chip-seal crew for the same reason. Predictably, the paving cartel went ballistic and hired a PR outfit to plant horror stories with business-compliant reporters bemoaning delays and cost overruns in the civil service paving crews. But paving bids plummeted by amounts that dwarfed the provincial overruns.

[View Larger Map]

The interactive map above, cribbed from the department’s website, shows that highway projects are still over-concentrated in government ridings. To some extent, this is inevitable given the NDP sweep of rural ridings in 2009. But the steps outlined above represent a serious effort to address highway deterioration that a new government would be imprudent to abandon for short term political gain.

6.  The Maritime Link

The natural gas industry, the wind power industry, the province’s two opposition parties, and a bogus citizens’ group that is really a front for the gas industry have had a field day parlaying voter resentment over recent power rate increases into skepticism about the wisdom of developing the Maritime Link to receive electricity from Muskrat Falls in Labrador. The quality of their arguments has ranged from shallow and self-serving to intellectually dishonest.

hi-muskrat-falls-river-2012-8col

Simply put, the government that takes office next month would be nuts to pass up the chance to open a power corridor to Labrador, site of the largest untapped hydro resource on earth. [Disclosure: In 2011 and 2012, I carried out writing projects for Emera involving the Maritime Link.]

Historically, the big problem with Nova Scotia’s electrical system is a lack of diversity. When oil was cheap in the ’50s and ’60s, we over-committed to oil-fired power plants, only to see the price of oil increase almost tenfold in the 1970s. We repeated the mistake in the 1980s, replacing all those oil-fired plans with coal plants. This made sense at a time when coal was cheap, mining it created local jobs, and no one had heard of climate change. But the last big mine closed in 2000 2001, and since then we’ve sent hundreds of millions of dollars a year to coal brokers in faraway lands, with no local local economic benefit. Once again, we found ourselves at the mercy of  wild swings in the price of imported fossil fuels.

The obvious solution is to diversify our electricity supply, and increase our access to market priced electricity, so we will never again find ourselves shackled to world prices for fossil fuels. In short, the solution is a little coal, a little natural gas, a little wind, a little hydro, eventually a little tidal, and occasional purchases from the North American grid—something we can’t do today, because our slender electrical connection to New Brunswick is too frail to support significant imports.

The Maritime Link serves this strategy in several ways:

  • It assures Nova Scotia a 35-year supply of clean, renewable energy sufficient to meet eight to 10 percent of our current electricity demand (and much more than that in the first five years, owing to a quirk in the arrangement with Nalcor, the Newfoundland energy utility).
  • Because Muskrat Falls is the small first step in a series of massive hydro developments planned in Newfoundland and Labrador, the Maritime Link will give us preferred access to that additional clean renewable energy when it comes on line.
  • When Newfoundland’s lamented contract with Quebec for power from the massive Churchill Falls generating station expires in 2041—not that far off in utility planning terms—the Maritime Link will also give us preferred access to that clean renewable energy.
  • Because Newfoundland has its eye on the massive electricity demand in New England and New York, construction of the Maritime Link will lead to construction of a robust transmission corridor between Cape Breton and Boston. This, too, can only increase our options for power purchases and sales at market prices.
  • At the moment, we have maxed out the capacity of our electricity grid to absorb intermittent power sources like wind. Hydro power makes an ideal backup for wind power because, unlike coal-fired plants, it can be ramped up quickly when wind turbines tapers off due to diminishing winds. The Maritime Link will enable further expansion of clean, renewable wind power in Nova Scotia.

These advantages are so solid and so varied as to make Nova Scotia’s embrace of the project the obvious choice. Against them, the project’s critics, all of whom have some vested interest in a competing fuel source or in defeating the current government, draw comparisons to the spot price of whatever fuel source is cheapest at the moment. They pretend we can base 35-year power planning decisions on the assumption that prices will stay that low for three decades.

This is rank nonsense. Every serious energy planner knows the only reliable thing about fossil fuel prices is that they are sure to gyrate wildly, while trending relentlessly upward. Last year, the prospect of tapping massive shale gas deposits made natural gas the darling of the day, but now gas prices have gone up again, and some energy experts contend the shale gas bubble is poised to burst.

By contrast, hydro projects look expensive at the start, but like the sweetest of bargains five or 10 years into their decades-long lifespans. The notoriously low price Hydro Quebec pays for power from Churchill Falls—currently one-quarter of a cent per kilowatt-hour—was actually above the market price when the contract was signed in late 1960s. All the costs of building a hydro development are payable up front, but because they use no fuel, hydro plants go on producing for decades at stable prices that look better with each passing year. Can any of the Maritime Link’s naysayers claim coal and gas prices will not increase over the next 35 years?

When analysts pick over the bones of the NDP’s almost certain defeat in next week’s election, they will focus on the issue of electricity rates. The NDP government has been honest about the short-term costs of converting Nova Scotia’s electricity system from its decades-old over-reliance on imported fossil fuels to a diverse mix of renewable sources, and it made the right decision committing to the Maritime Link. Opposition parties have pandered to public resentment over recent power rate increases, while offering magical promises to freeze rates and lower renewable targets (in the case of the Tories), or to abandon energy efficiency and adopt deregulation strategies that have proven disastrous in other jurisdictions (in the case of the Liberals).

That this contrast—honesty and sound decisions vs. pandering and magic solutions—will see the NDP driven from office is surely the most dispiriting aspect of recent public discourse in Nova Scotia.

A bad deal for NB? – feedback

Contrarian reader Cliff White writes:

I’m in Quebec at the moment and, as you can imagine, the deal with New Brunswick is playing very well here.  I can’t see how this won’t turn out to be a very bad deal for New Brunswick in the long term, similar to, but eventually worse then, the one Newfoundland agreed to under Smallwood.

At the time Smallwood signed the Churchill Falls deal, it looked pretty good, given the cost of energy at the time.  The problem arose when energy prices went up dramatically and Quebec refused to renegotiate. The length of the agreement meant that Newfoundland was getting fleeced, while struggling financially,  for many decades.

In New Brunswick’s case, of course, the deal is permanent.  One of the things this latest deal highlights is the continuing inability of Atlantic Premiers to work together in their own interest.

One last thing I’ve wondered about for some time is why our energy resources aren’t being use here at home  rather  then exporting it.  It has always seemed to me a better strategy to use any excess energy supplies as cheap energy to attract business rather then shipping it off to other jurisdictions. I realize this is a complex issue, but there have to be better strategies then the ones we’ve followed to date.  One would hope that the NDP government will take a more innovative approach in the future.

The short answer to the last question is that intermittent supplies like wind and tidal work better as part of a large system—one that can absorb their ups and downs. Also, intermittent energy sources need backup supplies that can be summoned in a hurry when the renewables go down. And since, as a practical matter, electricity can’t be stored, it’s helpful to have someone you can sell it to when there is an excess. Hopefully, those sales will balance the cost of buying backup power from time to time. All three needs argue for robust interconnections with regional suppliers and customers. This is why a Quebec Hydro monopoly poses so much risk for the est of Atlantic Canada.

As to Cliff’s main point, five years goes by in the twinkling of an eye. From that point on, the deal’s downsides may look bigger and bigger.

As Frank Corbett’s off the cuff comment in Question Period Thursday shows, the Dexter Government is dismayed at Graham. Dexter’s comments have been appropriately muted because he has to deal with things are they are, not as he might wish them to be.

Half way through its mandate, Dexter’s task force on renewable energy, headed by Dalhousie University’s David Wheeler, faces a daunting challenge: many of the assumptions it has been operating under are out the window.

Hydro Quebec deal is bad for NS & NL, but how good is it for NB?

As Contrarian has noted, the Hydro Quebec-NB Power deal poses huge for problems Nova Scotia. What’s more surprising is how shabby the deal seems to be for New Brunswick:

  • NB sheds $4.8 billion in debt, but also loses critical long-term strategic assets, including its transmission grid and a potentially lucrative energy portal into the insatiable New England electricity market.
  • NB remains saddled with the ballooning costs for refurbishing the aging Pt. Lepreau power plant, but Quebec Hydro gets the plant. NB does get some relief in the cost of replacement energy while Lepreau is offline.
  • NB remains stuck with NB Power’s thermal stinkers—one dirty coal-fired plant and two oil-fired peaking plants—with no guarantee Hydro Quebec will continue to buy power from them.
  • Existing NB industries get an immediate 30 percent reduction in power rates, but the new rates are not frozen and will increase in step with industrial rates in Quebec. After five years, all bets are off.
  • Moreover, new industries, or existing industries that expand beyond historic consumption, will pay market rates.
  • Customers get a five year price freeze. Rates thereafter are theoretically capped to increases in the Consumer Price Increase, but this capping provision goes out the window if Hydro Quebec’s costs go up.
  • Graham argues that  NB has avoided the huge cost of rebuilding or decommissioning the Mactaquac dam, which is approaching the end of its life expectancy.
  • NB essentially surrenders regulatory authority over electricity.
  • Hydro Quebec will pay no taxes in NB.

Hydro Quebecwick unveiled

Diagram shows the shocking degree to which Nova Scotia is an energy island. This is a big obstacle to the development of local renewable energy supplies like wind and tidal, which are intermittent and therefore require robust interconnection with nearby power porducers and users. The Hydro Quebecwick deal means that any increase in our connectivity with thew rest of the world will be on the terms of the new monopoly owner of the grid, the Government of Quebec.

Inter-provincial power grid diagram shows the startling degree to which Nova Scotia is an energy island. This is a big obstacle to the development of local renewable energy supplies like wind and tidal, which are intermittent and therefore require robust interconnection with nearby power porducers and users. The Hydro Quebecwick deal means that any increase in our connectivity with the rest of the world will be at the mercy of the new monopoly owner of the grid, the Government of Quebec.

Premiers Shawn Graham (NB) and Jean Charest (QC) have unveiled the details of the Hydro Quebecwick deal. Quebec gets a monopoly on eastern Canadian access to US power customers; New Brunswick gets a mess of short term pottage and some debt relief, but gets to keep two white elephant dirty coal power plants. This may one day turn out to be as big a fleecing as the one Quebec gave Joey Smallwood 40 years ago.

It’s hard not to see this as a dark day for the rest of Atlantic Canada. Bye bye, Green Grid, a critical element in developing promising renewable but intermittent local Maritime energy sources like wind and tidal. Bye bye, fair access to US electricity markets, an equally critical element in developing those resources.

David Wheeler take note: This is very bad news for anyone anxious for action on climate change in Atlantic Canada. Considering he was blindsided, Premier Darrell Dexter’s response has been appropriately dignified, but make no mistake: this presents his administration with a huge challenge. Like Newfoundland, Nova Scotia’s influence on the national stage has reached such a low ebb that hardly anyone there will give it a thought.

See also:  News release. MOUMOU summary. (All are PDFs.)

Hydro Quebecwick? Not just Danny’s problem

NB Power-craigslistThis promises to be a continuing Contrarian topic, but I will flag it briefly: NB Power’s apparently imminent sale to Hydro Quebec represents a tectonic shift in Nova Scotia’s energy options.

I mention this because, as is typical, the national news media seem to view the story as just another installment in Newfoundland Premier Danny Williams’s (to them) clownish battles with central Canada. Such a view is as witless as it is patronizing.

The sale poses huge problems for Nova Scotia and PEI, as well as Newfoundland. If Quebec can use its windfall profits from Joey Smallwood’s disastrous 1969 deal on Upper Churchill Falls to buy up all the available routes that might get Lower Churchill Falls power to market, you have to wonder whether Canada really is a country any more.

Nova Scotia needs desperately needs to get off dirty imported coal as an energy source. Of our three local renewable energy prospects—wind, biomass, and tidal—two are intermittent and require large amounts of dispatchable backup energy. (Dispatchable means it can be turned on and off quickly, unlike thermal plants, and when needed, unlike wind and tidal). Pt. LePreau nuclear and Churchill Falls Hydro are the two best only two prospects. To justify the cost of Churchill Falls, we need to be able to transit any excess electricity to New England.

Premier Darrell Dexter speaks bravely about turning the sale, and Newfoundland’s antipathy to Quebec Hydro, to Nova Scotia’s advantage by building an undersea cable from Yarmouth to Maine. That would add a third undersea cable to the project. (The first two would cross the Strait of Belle Isle and the Cabot Strait.) Maine Governor John Baldacci, keen on forging an energy alliance with NB, has previously rejected that idea.

Dexter may by hoping to keep the young’un’s spirits up by whistling past this graveyard, but he must understand that this is first big crisis to face his administration.

A sale would also blows a big hole in nascent plans for a green energy pool involving the four Atlantic Provinces, another potential solution to the problem of intermittentcy of renewable energy supplies.

The Globe and Mail reports that Quebec is holding out a sweet carrot to NB Premier Shawn Graham: wiping clean NB Power’s $4.7-billion debt, and cutting power rates to consumers and businesses by $5-billion. That will be hard for the province to resist, and it goes without saying that no national government would risk offending Quebec by blocking the sale, even if it cripples energy options for three poor-sister provinces.

More on this in the days ahead. Meanwhile, Costas Halavrezos has a good interview with Yves Gagnon, KC Irving Chair of Sustainable Development at Université de Moncton here, CBC-New Brunswick’s estimable Jacques Poitras has some cogent analysis, and, as always, AllNovaScotia is on top of the story (subscription required). Reaction from Williams here and here.  The Fredericton Gleaner likes the deal, as does the New Brunswick Business Journal.