Commentary by Jonathan Alward, Vice President, Policy

Given all the interest in climate change and in reducing the use of fossil fuels, especially those generating electricity, it is no surprise many people were shocked to learn about Nova Scotia Power’s plans to transition existing coal-fired electricity generation at the Lingan Generating Station to use heavy fuel oil in 2030.

However, this information is not surprising to those who have been engaged in the utility’s public consultation as it develops its 2022 Evergreen Integrated Resource Plan. Nova Scotia Power has been very transparent with its modelling efforts.

Of course, it is reasonable to question how fossil fuels could play a role in reducing emissions from electricity generation, or whether using heavy fuel oil instead of coal provides a meaningful benefit. But upon closer inspection, the data clearly shows Nova Scotia Power’s plans make sense, meet emission reduction targets, and balance important public considerations like affordability and reliability.

Fossil fuels will help Nova Scotia reach net zero cost-effectively and add reliability for ratepayers.

Nova Scotia Power’s modelling is clear: heavy fuel oil, while controversial, would play role in all 24 scenarios studied. Heavy fuel oil would be used sparingly with or without an Atlantic Loop in place. For example, in the main CE1-E1-R1 scenario, coal would produce 2,953 MWh of electricity in 2025 before being phased out entirely by 2030, while heavy fuel oil would produce just 17 MWh in 2030.

In the modelling, wind generation would make up the vast majority of the difference, as well as help meet increasing demand. The provincial requirements for renewable generation and the incoming federal Clean Electricity Regulations would incentivize the move to renewables.

If you need a second opinion, other modelling for the region provides similar results. In a project undertaken by the Atlantica Centre for Energy using Net Zero Atlantic’s ACES model, a cost-effective path to significantly reduce emissions includes a combination of natural gas and oil electricity generation.

In a scenario where emissions were limited to 5% (relative to optimal operations), capacity is added after 2030 for both heavy fuel oil (New Brunswick) and natural gas (New Brunswick and Nova Scotia), but are used sparingly. This scenario sees carbon dioxide emissions reduced from 43.73 Mt in 2020-2025 to 0.09 Mt in 2050-2055, while lowering total costs by $1.1 billion to $4.1 billion over the period, in 2018 dollars.

The Energy and Environmental Economics’ report used to develop the Clean Power Roadmap for Atlantic Canada advocated for an Atlantic Loop to help save unnecessary costs for ratepayers, but still forecasted a need for gas and oil capacity and generation in the region leading to 2050.

In all scenarios, modelling is used to find the most cost-effective solutions within different emission constraints.

Electricity demand in Atlantic Canada has high peaks – especially during the winter months. Cold weather increases demand for electricity to heat homes and businesses, and that demand will continue to increase as more residents and businesses electrify.

Electricity imports, hydroelectric generation and batteries, among other tools, can help provide a reliable supply of electricity especially with more intermittent renewable generation included. However, grid scale batteries are still expensive, generating facilities aren’t always operating optimally and  imports are sometimes limited. It is critical that utilities have generation capacity that is quick to turn on to deal with these peaks.

Utilities are also mindful of not over-building the system for the majority of daily need. For Nova Scotia Power’s plan with converting coal to heavy fuel oil, it is understood the cost will be minimal as generation assets are already in place.

While it would be ideal to phase out all fossil fuels from our electrical grid, Nova Scotia’s energy reality means even with electricity imports and more renewables, the most cost-effective way to meet emission reduction targets requires using small amounts of heavy fuel oil and natural gas.

Before opposing our utilities’ plans to reduce emissions, Atlantic Canadians should take steps to better understand the region’s energy realities moving toward net zero. The more energy literate we are, the more we will curb our own electricity demand, and the less reliant we will be on fossil fuels on our grid.