The Atlantic Loop As Explained So Far Is A Mirage

Nova Scotians hearing about proposals for the Atlantic Loop would do well to remember our distressing experience with the Muskrat Falls project.

It was originally pitched as providing Nova Scotia with 20% ownership in exchange for ratepayers financing of the necessary transmission facilities, of which some is to connect through Nova Scotia to New England.

Newfoundland and Labrador (NL) changed the game to end Nova Scotia’s rights after 35 years and instead is to provide a certain amount of extra electricity when it has an excess, whether or not Nova Scotia needs it.

Nova Scotia had no need for the power before 2020 but NL insisted that the transmission lines be ready by the end of 2017, the original target date for the whole project.

In a deal that was championed by Emera, negotiated by the NDP, and signed by the Liberals, Nova Scotia meekly agreed to these terms. The transmission lines were completed on time, but the construction project is late by more than four years and still counting.

The line costs $97 million annually for financing, plus maintenance of $18 million. Ratepayers have been charged for both since 2018, minus a wrist slap to Emera of less than $10 million per year.

With that as context, we should give wary consideration to the much-ballyhooed Atlantic Loop. It is promoted as interconnecting electricity suppliers in Quebec, NL, New Brunswick, and Nova Scotia, thereby improving regional reliability.

The sales pitch from Ottawa is that it will enable the Maritime provinces, especially Nova Scotia, to eliminate coal generation by 2030 instead of 2040 as originally planned.

As pointed out by Larry Hughes, Quebec thinks of the loop as its New England Link. It has made large long-term deals to sell hydroelectricity to Massachusetts and New York. There are 600 workers already at work on the necessary line from Quebec through Maine.

Nova Scotians endure electricity rates much higher than most Canadians. Regardless of what form the Loop may take, we will continue to pay off the cost of the coal plants whether they are used or prematurely closed.

This week, the government tabled the Environmental Goals and Climate Change Reduction Act, which says in part: “The Government’s targets for greenhouse gas emissions reductions are…

to have 80% of electricity in the Province supplied by renewable energy by 2030; and

to phase out coal-fired electricity generation in the Province by the year 2030.”

It says nothing about an affordability constraint on meeting the goal nor did the government respond to a question if there would be one.

On October 5th, Premier Houston assembled a meeting on the topic including Nova Scotia Power, opposition leaders, and federal MPs. It is mildly comforting that MP Andy Fillmore seems to understand the risk: “It’s the goal of getting to 80 percent renewables in Nova Scotia and getting off coal entirely by 2030, which is a decade earlier than planned. The challenge is to do those two things without increasing the cost to ratepayers.”

He noted that Nova Scotia ratepayers “have already shouldered the burden of Nova Scotia’s journey toward decarbonization so far.”

We are about eight years from the first day of 2030, about the same amount of time since construction began on the still incomplete Muskrat Falls project. There is no consensus on where the Atlantic Loop will run, nor who will build it, nor what new electricity generation will fill it, nor who will finance it, nor whether Nova Scotia will have to outbid New York and Massachusetts if it wants access to some of that power.

It is highly unlikely that all of that will be sorted out and implemented in time for 2030. Does the Province have a plan B?

When asked whether there are renewable alternatives to the Loop for meeting the goal, the Province replied: “There are a wide range of tools that can be used to increase the supply of firm renewable electricity, which … include natural gas, greater energy efficiency and demand response, batteries and storage, biomass and hydrogen.”

Discerning readers will note that the only “renewable” source identified is biomass, which is not cost-competitive and would require vast deforestation to fully replace the electricity supplied by coal.

The government should treat the 2030 goal as aspirational and be willing to extend it until viable replacements are found. It would be a huge mistake to make firm commitments on decommissioning the coal plants until there is a clear way forward for a satisfactory alternative.

That may not happen until much closer to 2040, by which time the remaining coal plants will be paid for and worn out. Nova Scotia’s interest would be best served by a line from Churchill Falls following the track of the Maritime Link. As it happens, control over the power from Churchill Falls reverts to NL at the end of that year.


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Reference Material

Power Plays

Nova Scotia Power Inc. 2022-24 Financial Outlook (Redacted)

Nova Scotia Power Inc. 2021 Annual Report to UARB (Redacted)

Halifax Budget Committee 2022/23 Fiscal Framework

Environmental Goals and Climate Change Reduction Act

The Unintended Consequences of the Atlantic Loop

How Canada Intends to Achieve its 2030 Emissions Targets

Nova Scotia Power Integrated Resource Plan

Comments on NSPML Compliance Filing

Nova Scotia Utility and Review Board Decision

Maritime Link Compliance Filing

Comparison of Electricity Prices in Major North American Cities

NSPI 2009 Integrated Resource Plan Update Report

Summary of Existing Generation Plant

Comparison of Demand to Supply

Slides from recent NSPI Presentation

The Power Mess on Long Island

Primer on the Process of Hydraulic Fracturing

Nova Scotia Hydraulic Fracturing Review and Public Consultation

Contributions of Utilities Regulation to Electrical Systems Transformation: the Case of Nova Scotia

Nova Scotia Electricity System Review Report


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