Wednesday, June 15, 2011

Nova Scotia COMFIT plans move forward to boost renewable generation

The Canadian province of Nova Scotia is committing to generate 25% of its electricity from renewable sources by 2015 from a current level of 13%. Among the first steps to meeting this ambitious target is a new Community Feed-in Tariff (COMFIT) program to support community-owned projects using a variety of technologies and a competitive bidding program for medium- to large-scale projects.

The COMFIT combines local ownership with a traditional feed-in tariff market design, offering fixed rates for big wind (projects greater than 50 kW), small wind, biomass, tidal and hydro technologies. Projects must be 51% owned by community groups including municipalities, universities, First Nations, co-ops and Community Economic Development Investment Funds (CEDIFs).

The Nova Scotia Utility and Review Board (UARB) held a hearing to discuss draft rates in early April and final rates are expected soon. Prices range depending on the perceived level of risk associated with the technology. In-stream tidal, a relatively new technology, has a high proposed rate at $0.652/kWh compared to big wind, a more established technology, at $0.452/kWh.

Big wind is expected to play a leading role in Nova Scotia’s new renewable energy mix. Under COMFIT, there are opportunities for partnering with community groups and First Nations who will be looking for expertise. The local Mi’kmaq community is currently in the process of developing its very first renewable energy strategy and is looking at potential areas of collaboration with developers and technology providers on these projects.

Nova Scotia’s new competitive bidding process also paves the way for more medium to large wind projects in the province. In its initial phase, 600 GWh is reserved for larger projects to be split evenly between the province’s main utility, Nova Scotia Power (NSPI), and Independent Power Producers (IPPs). The province will be appointing a Renewable Electricity Administrator (REA) to oversee the request for proposal (RFP) process.

Financing is expected to be a challenge but more so for the smaller-scale COMFIT projects, which may have trouble finding early-stage investment. There is a possibility the province may allow for contract bundling for these smaller projects that would allow developers to reach economies of scale and create more finance options. Canadian banks aren't interested in providing equity for smaller projects at the moment. But hopefully some Canadian banks will draw lessons from European banks that have developed tools for financing small, community-owned renewable energy projects.

The opportunities for developers and suppliers in Nova Scotia will become clear over summer 2011. Clarity on the timing and details on the new RFP are imminent following the appointment of the new REA. The Department of Energy will also open the application process for COMFIT projects following the rates announcement.

Source: Adrienne Baker, Director of Canadian Clean Energy Conferences. Canadian Clean Energy Conferences is organizing the Nova Scotia Feed-in Tariff Forum on September 21-22 in Halifax, Nova Scotia.

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