28 Jul What the NDP’s tougher renewable energy targets mean

In a post yesterday Monday, contrarian observed that a little noticed NDP campaign promise would advance Nova Scotia Power’s renewable energy targets by five years. Today Tuesday, the new government made that promise official government policy. NSP must generate one quarter of its energy from renewable sources (hydro, wind, tidal, wave, solar, biomass, biofuel, or landfill gas) by 2015.

It’s certainly a laudable step, but how big a step is it? The answer to that is incredibly complicated.

It’s complicated because various stages of the renewable energy requirements imposed on NSP define renewable energy three different ways:

• as overall generation from renewable sources;
• as generation from renewable sources built after 2001 in Nova Scotia by companies other than NSP;
• as generation from renewable sources built after 2001 in Nova Scotia, whether by NSP or third parties.

It’s still more complicated because the amount of generation from each of these sources can be measured in two ways: in absolute terms, as so many gigawatt-hours (GWH) of electricity; or in relative terms, as a percentage of NSP’s overall generation.

Bear in mind that the second yardstick is a moving target. If NSP’s efforts to curb electricity use (known as demand side management, or DSM) succeed in reducing our overall power consumption, a fixed amount of gigawatt-hours would constitute a larger percentage of that smaller consumption. If consumption of electricity falls, NSP could conceivably move from 12 percent renewables to 13 percent renewables without actually adding any new renewable energy to the grid. If one of our large industrial power users were to shut down—the NewPage mill at Point Tupper, for example—the percentage of NSP’s energy from renewable sources would shoot upward, even without NSP producing any new renewable energy.

So let’s walk through the various targets NSP has to meet.

2010:

Under the Electricity Act, a set of regulations known as the Renewable Energy Standards (RES) requires NSP to purchase at least five percent of its 2010 energy supply from renewable sources owned by third parties and built after 2001.

Newspapers and broadcasters sometimes misreport this target as stating that five percent of NSP’s generation must come from renewable sources. A Canadian Press story carried by the Herald made that mistake today. NSP already produces 11 to 12 percent of its overall generation from renewable sources, mainly hydro. The RES standard calls for five percent of new renewables owned by third parties. That would bring NSP’s overall use of renewables to something over 16 percent.

NSP forecasts that it will sell 12,200 GWH of energy in 2010. Five percent of that figure is 610 GWH. So to meet the 2010 target, NSP must generate 610 GWH from new, third-party, renewable sources.

Of the renewable energy NSP already uses, approximately 180 GWH qualifies under the 2010 RES rules. That leaves a shortfall of 430 GWH. In 2007, NSP put out requests for proposals that led to contracts with independent producers for 711 GWH of wind power—more than enough to meet and exceed the 2010 targets.

Unfortunately, the worldwide financial meltdown that hit late last summer has stalled or killed several of those projects. Environmental approvals have also been slower than hoped for, especially in parts of the province with strong NIMBY proclivities. To compensate for the possible shortfall, NSP, NewPage Port Hawkesbury Corp., and Strait Bio-Gen Ltd. cobbled together a slapdash proposal for a biomass generation project using wood waste, and then sought unprecedented prior approval from the Utility and Review Board for the scheme. To no one’s surprise but NSP’s, the UARB didn’t bite, so the utility’s ability to meet the 2010 target remains in serious doubt.

NSP still has one escape hatch. If it fails to meet the 2010 target, if can still comply with the regulations if it meets the target in 2011, and produces an additional amount of new renewable energy in 2011 equal to twice the amount of its 2010 shortfall.

Does your head hurt yet?

2013:

Two different standards apply to NSP in 2013:

• Under the province’s Environmental Goals and Sustainable Prosperity Act (or EGSPA, pronounced, “Eggs-puh” by provincial bureaucrats), 18.5 percent of Nova Scotia’s electricity needs must come from renewable sources by 2013. (This extraordinary act was the crowning achievement of former Environment Minister Mark Parent, defeated in the June election, and retired Deputy Minister Bill Lahey, who together somehow steered it through the Tory cabinet and won unanimous legislative approval.)
• Under the Renewable Energy Standards (RES) regulations of the Electricity Act, the 2010 requirement for five percent new renewables increases to 10 percent in 2013, but this time it doesn’t all have to come from third parties. NSP can produce its own renewable energy.

Depending on overall energy consumption, meeting the RES regulations would bring NSP’s overall renewable production to something like 21 percent, well above the 18.5 percent required by Eggs-pah. (I love talking like a bureaucrat.) So the tougher RES standard rules the day. And that brings us to…

2015:

Acting Energy Minister Frank “Nanky” Corbett announced today that NSP would be required to produce 25 percent of its overall energy needs from renewable sources by 2015, five years earlier than the Renewed Energy Strategy unveiled last winter would have required. [Disclosure: contrarian spent part of 2007 and much of 2008 under contract with the Department of Energy working on this strategy, mainly as a writer.]

On its face, this is a reasonable decision. It will keep the renewable portion of NSP’s generation increasing at about two percentage points per year, a pretty good clip. It’s much tougher than what the Tories had imposed.

It may also serve as cover for cutting NSP some slack on its probable failure to meet the 2010 standards. Asked about this today, an official of the provincial energy department said, “It’s going to be a challenge for Nova Scotia Power to meet the 2010 target. We’re looking at some different options for dealing with that, and this [relaxing the 2010 deadline] is one option we will present to government.”

“The point is that we need more renewables,” he added. “It doesn’t make sense to get too hung up on this particular target.”

David Wheeler, Dean of Management Studies at Dalhousie University, will carry out a public consultation on how best to reach the tougher targets Corbett announced today.  Meeting them won’t be easy, or cheap. It’s a pity the NDP won’t have the $28 million it promised to spend subsidizing dirty, coal-fired eletricity to help with this crucial environmental task.

[Note: This is a long post (my longest ever) about an important but mind-numbingly tedious set of regulations and calculations. It shouldn’t astonish anyone if I got some of the details wrong. If any of contrarian‘s friends in the Department of Energy, the Ecology Action Centre, Nova Scotia Power, the independent wind industry, the Department of Environment, the NDP, or the PC Party have corrections or amplifications to offer, please click the “email a comment” tab at the top of this post.]