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Buying power or burning more coal best options for Nova Scotia Power to manage Muskrat Falls shortfall

An aerial view of the Muskrat Falls site. — File photo
An aerial view of the Muskrat Falls site. — File

The chief executive officer of Emera says it will be the consideration of “affordability” for customers that will determine how the company’s subsidiary, Nova Scotia Power Inc., will proceed in making up for the shortfall caused by delays in bringing the Muskrat Falls project in Labrador online.

In other words, Scott Balfour isn’t ruling out coal-fired generation to cover the difference.

Scott Balfour
Scott Balfour

“Nova Scotia Power will look at internal generating capacity and its ability to buy from the market and will continue to find the right balance that is the lowest-cost alternative for customers,” said Balfour, after the company held a virtual annual general meeting Friday.

“Internal generating” means electricity from NSPI’s eight coal-burning plants. “The market” would be another utility like Hydro Quebec, an option lobbied for in Thursday’s Chronicle Herald by Gretchen Fitzgerald, the national programs director of the Sierra Club Canada Foundation;

“The opportunity to significantly reduce NSPI’s coal-fired generation exists, by utilizing 300MW of capacity on New Brunswick’s power lines to bring electricity to Nova Scotia from Quebec,” wrote Fitzgerald, who suggested the resulting “price for power in Nova Scotia to all classes of ratepayers would be no more than the present rate.”

But others have suggested importing from sources other than that which would come through the fixed rates of the Muskrat Falls agreement could negatively impact electricity rates.

Balfour only commitment Friday was to find the way to deliver the “most affordable cost for customers.”

Moving emissions targets

NSPI’s ability to use coal burning to fill in any gaps was made easier last month when the Nova Scotia government adjusted its renewable electricity regulations to allow the utility to meet its target of providing 40 per cent renewable energy.

Currently, renewable energy accounts for 30 per cent of the output, with coal providing over half.

NSPI was to have reached the 40 per cent mark this year, but the delay in getting power from Muskrat Falls led to the change in guidelines.

Construction at the Labrador site shut down in mid-March because of the COVID-19 pandemic. Asa result, Stan Marshall, chairman of Nalcor, the Newfoundland and Labrador crown corporation responsible for Muskrat Falls, said the project could end up four to 10 months behind schedule. Nova Scotia’s Mines and Energy Minister Derek Mombourquette seems to lean toward a latter timeline, recently suggesting Muskrat Falls-produced electricity might not be available to send through the Maritime Link this year.

Now, the province is permitting NPSI to average 40 per cent renewables between now and 2022, something Balfour says is achievable.

“We’re very confident in out partner Nalcor and their ability to complete the Muskrat Falls project and for us too meet that average standard over the next three years,” said Balfour.

But the much-delayed Labrador project has undoubtedly put a crimp in the plans of NPSI, which earlier this year indicated it was not only in a position to hit the 40 per cent mark on time, but could go as high as 60 per cent on renewables in 2021.

The latter is less likely to happen now, but Balfour said Emera and NPSI are more than satisfied with the progress they have made in “the transition” on moving away from coal.

“Nova Scotia has had a long history of coal being part of its generation mix. But we’re proud that over the last 15 years, progressively, we’ve continued to reduce the amount coal that is burned,”he said

“As we invest in renewables and and support transmission in order to bring renewables into Nova Scotia, like the Maritime Link, the focus always has to be on the transition and managing that so the transition is affordable for customers.

“We continue to generate a portion of our electricity today from coal, much less than what it was 10 years ago. Ten years from now, it will be much less again. In the meantime, we balance all of those sources and work them to maintain an affordability profile for customers.”

The Canada-Nova Scotia equivalency agreement means NPSI is permitted to burn coal until 2040, an exemption that makes Nova Scotia’s deadline a decade later than the federal government’s stated goal of 2030.

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