A plan for Nova Scotia, not for Nova Scotia Power
To meet our climate goals and get off fossil fuels, our province’s leaders need to make some smart choices — and fast
But he’s not a high-tech evangelist or famous actor.
And so far, the Halifax finance whiz turned renewable-energy entrepreneur isn’t getting much traction with what he says is a no-risk-to-the-province proposal to build a series of giant geothermal plants to provide steady, reliable, clean power to help replace coal. The new energy source would make the province less dependent on imports and profit-driven Nova Scotia Power as demand for electricity is poised to surge with Canada pushing to get cars and homes off fossil fuels.
He’s not asking for government money. All Mullen needs is a signed power purchase agreement so he can line up funding from financial backers (he’s got eager bidders, he says) and his company, GreenQuest Power, can start building a pilot plant that would generate 120 megawatts, enough to power 40,000 homes.
He’s asking the province to agree to $100 per megawatt hour. That’s pricier than wind, which has fallen dramatically over the years to about $55 or $65 per megawatt hour (MWh) hour with the installation of larger and more efficient turbines.
But geothermal has the advantage of being able to generate emissions-free, renewable electricity around the clock, unlike wind and solar. Those “intermittent” sources, supplemented by coal and natural gas, need a new backup. Idling backup “baseline” energy makes the true cost of wind closer to $120 or $150 per MWh.
Mullen, a financial consultant before launching GreenQuest, says his price would come down to $50 for the plants he builds after the first proves itself.
He’s been evaluating green energy opportunities for three years with his engineer brother Vince Mullen in Saskatchewan. He says their research points to geothermal as the missing link as Nova Scotia Power shuts down its coal-fired plants to meet government-mandated targets. Previous premier Iain Rankin moved the deadline up a decade to 2030, an acceleration Houston endorsed. On top of that, the province is aiming to get to net zero greenhouse gas emissions by 2050.
“There’s a lot of pent-up demand for this type of solution globally,” Mullen says. “Because we’re monitoring and doing the business modelling real-time, we just caught it at the perfect time. Nova Scotia happens to be decommissioning all its coal plants and trying to move to net zero.”
Mullen, who grew up in Waverley, says everything he’s proposing with geothermal has been done before many times. “There is no question of ‘if’ it is possible, the question is can we improve on the costs.”
He’s done the math and it appears to add up.
NO PLAN ON THE TABLE
With gas guzzling cars and oil-heated homes and buildings, electricity accounts for only about 22 per cent of Nova Scotia’s energy consumption. Weaning off fossil-burning fuels will generate a jump in electricity demand that could triple the current level.
Despite the looming need, Nova Scotia has yet to put a viable plan on the table.
It’s less than eight years until 2030, when Houston aims to have 80 per cent of Nova Scotia’s electricity supplied by renewables, up from 30 per cent in 2021. Nova Scotia Power’s goal this year of 60 per cent non-emitting energy sources might be tough to meet with the flow of hydropower from billions-over-budget Muskrat Falls in Labrador experiencing glitches.
Houston has encouraged pitches from green energy entrepreneurs. Wind and solar have grabbed the headlines. When storage options become more affordable, offshore wind could one day make Nova Scotia a major producer, even an exporter.
In the meantime, the Atlantic Loop is touted as the best and most affordable solution to replace coal. The estimated $5-billion project would upgrade transmission grids to allow for the flow of more hydroelectric power from Quebec and Labrador through New Brunswick and on to Nova Scotia.
Atlantic Canada’s premiers are asking Ottawa to contribute $2 billion so ratepayers don’t bear the brunt of going green. The federal government signalled its support with the release in March of its final “Clean Power Roadmap for Atlantic Canada” but has offered no confirmation on funding.
Nova Scotia Power is pushing for the expanded grid, which would bolster its monopoly power and enable the utility to earn its government-guaranteed profit of around nine per cent of what it spends on grid improvements or expansion.
But putting too much faith in the Atlantic Loop could prove risky. Securing hydroelectric power is by no means a done deal and supply is limited.
Hydro-Quebec, the major source, has other potential customers in New York and New England who already have far-higher electricity bills and would likely be willing to pay more.
Following a Council of Atlantic Premiers meeting in March, the region’s premiers said Russia’s invasion of Ukraine put a spotlight on the security of energy supply and the need to boost self-sufficiency.
Asked by Unravel Halifax at a press briefing after the meeting about the risk of depending on Quebec, the premier said he is eying alternative sources.
“The world is changing very quickly,” he said. “There are incredible opportunities. When you look at the energy mix, which really speaks to energy security, you’re talking about a whole mix of generations coming on to the grid.”
He cited hydro, solar, wind, green hydrogen, and evolving technologies around nuclear that use spent fuel. (Two New Brunswick start-ups are working on so-called small modular nuclear reactors to add to that province’s aging Point Lepreau Nuclear Generating Station. Getting them up and running by 2030 is viewed a long shot.)
Responding to the same question at the briefing, Newfoundland and Labrador Premier Andrew Furey said his province could provide “a more robust supply” of hydropower.
The province started delivering electricity from Muskrat Falls to Nova Scotia through a 177-kilometre subsea cable in August 2021 after a three-year delay that resulted in ratepayers here spending more than $200 million on replacement fuels. Muskrat Falls is supposed to supply 10 per cent of Nova Scotia’s electricity needs under a 35-year contract.
Betting on an increased supply could be risky.
“Although Newfoundland and Labrador have a bit of extra power kicking around because of Muskrat Falls, it doesn’t necessarily mean it’s going to be available,” says Larry Hughes, a Dalhousie University professor who specializes in energy systems and policy. “It looks as if mining is about to take off in the province … They have three ingredients for batteries and apparently they’ve got rare earth elements in certain areas. If they start doing the processing themselves, what is the incentive to sell power here at a wholesale rate when they can sell it at a higher rate within their province itself?”
Like Quebec, the province can also bypass Nova Scotia and sell to jurisdictions that are willing to pay more.
Weather is another concern. With global warming, erratic events like the 1998 freeze that left half of Quebec and thousands of New Brunswickers without power for weeks could become more frequent.
“What happens if Quebec has another ice storm?” says Mahone Bay-based green energy consultant Jamie Stephen. “All of Atlantic Canada is without energy for several weeks? That doesn’t seem like a good idea in a changing climate.”
Ottawa’s latest clean power roadmap for the region underwhelms Stephen.
“The Atlantic Loop would provide more options but with the numbers in the report, there is no way it can deliver sufficient electricity for electrification of the transportation and heating sectors,” he says. “The Atlantic Loop is required simply to partially deal with the closures of coal-fired power plants and the difficulty to invest in replacement gas plants because of the forthcoming clean electricity standard.”
Nova Scotia Power plans to switch two of its coal-fired plants over to natural gas for an interim period, with ratepayers paying for the temporary fix that would last until natural gas phases out. Nova Scotia Power’s parent, Emera Inc., didn’t respond to questions and declined to make its CEO, Scott Balfour, or the utility’s CEO, Peter Gregg, available for an interview.
ANOTHER HOMEGROWN IDEA
Like Mullen, Stephen has a home-grown energy solution that would create local jobs, in contrast to more hydroelectric imports, which deliver few local benefits.
Also, like Mullen, he’s having a tough time getting a foot in the door, despite a plan that could prove lower risk and lower cost than ideas the province is pursuing.
Stephen says entire towns could meet their heating needs by burning only a small portion of the truckloads of sawmill scraps and pulpwood that Pictou County’s Northern Pulp and other shuttered mills once gobbled up. (Read more in this recent Unravel Halifax feature.)
With a district energy system (a high-efficiency boiler feeding a network of hot water pipes), a town like New Glasgow could heat most of its businesses and homes with 50,000 tonnes of biomass a year. Northern Pulp’s annual consumption was 1.2 million tonnes.
Smaller, more rural communities, such as Argyle, near Yarmouth, could burn wood pellets to heat homes and business with government-funded pellet-burning boilers. Instead, Nova Scotia exports boatloads of compressed wood pellets. Europe then gets the carbon credits for burning the renewable resource.
Beyond energy, Stephen’s proposals provide a new market for Nova Scotia’s forestry industry, which has been struggling without a buyer for bark, chips, and other by-products since the closure of Northern Pulp.
Stephen uprooted from Ottawa with his wife and three young daughters to Nova Scotia in November 2020 because of the opportunity that the mill’s closure and the threat of climate change creates here.
He tried to get funding for feasibility studies from the $50-million government fund set up to back projects to breathe new life into the forestry industry. He says gatekeepers at the transition fund rejected the request and told him they aren’t open to further biomass proposals.
In partnership with the Nova Scotia Federation of Woodlot Owners, Stephens secured funding from Ottawa to assess the social acceptability of bioheat and district energy. He’s hoping for more federal money to do a full feasibility study for New Glasgow.
Bill Lahey, the University of King’s College president who prepared a sweeping report on best practices for a sustainable forestry industry, endorsed small-scale biomass-burning projects for public buildings with fossil-fuelled heat. Liberal Stephen McNeil’s government identified 100 suitable buildings.
Lahey says he didn’t advocate for large-scale biomass options using wood to generate electricity out of concern they’d justify bad forestry practices, and weren’t a green option compared to alternatives.
Lahey says he didn’t consider biomass projects for heating like the ones Stephen is proposing, which are far more efficient than burning wood scraps to generate electricity, as Nova Scotia Power does.
Stephen says an ecological forestry that maximizes forest health and biodiversity while also providing sustainable building materials requires a market for by-products and pulpwood (the small diameter, low quality standing timber that Northern Pulp and Bowater Mersey bought by the truckload).
“It is simply not possible to implement ecological forestry, as recommended in the Lahey Report, without a market for low-grade timber. In the absence of a pulp market, the only viable option is bioenergy,” says Stephen. “If people want restoration of the Acadian Forest, they have to support bioenergy produced from ecological forest operations because it is the market that allows active restoration to occur.”
NOVA SCOTIA POWER AS CROWN CORPORATION?
Nova Scotia generated most of its electricity by burning imported oil until the 1970s OPEC oil crisis triggered a switch to Cape Breton coal. As that supply dwindled, coal was imported. The world’s dirtiest fuel’s contribution has shrunk as energy-intensive industries shut and solar and wind were added to the grid. But it’s still the biggest source of electricity, and electricity is the province’s biggest emitter of greenhouse gasses.
Houston has shown a willingness to confront Nova Scotia Power that his predecessors largely lacked. In February, he kiboshed the monopoly’s plan to impose access charges that would make new solar panel installation cost prohibitive. The utility quickly backed down after Houston threatened new legislation. He’s since put forward a bill that would protect the solar industry and put other restrictions on Nova Scotia Power.
The solar debacle prompted renewed calls for the province to make Nova Scotia Power a Crown corporation again. In a phone call with reporters, Houston didn’t rule out the notion but hinted the price tag would make a deal impossible. One analyst who follows the company (and asked to remain anonymous due to the sensitivity of the question) estimates the takeover cost at $6 billion, including the assumption of debt.
Most energy industry observers aren’t warm to the idea, pointing to our Atlantic neighbours to illustrate the pitfalls of Crown-owned utilities. Newfoundland and Labrador needed a federal bailout after massively overspending and underdelivering on Muskrat Falls, for example, while New Brunswick Power spent $13 million in taxpayer money on a Florida company claiming it found an efficient technology to convert seawater into hydrogen. (It hasn’t.)
Nova Scotia Power is asking its regulator, the Nova Scotia Utility and Review Board, for a 10-per-cent hike in power bills over two years. Depending on the path Nova Scotia takes on clean energy, it’s a signal of the potential for much higher increases to come as infrastructure is built and new power deals signed.
It’s unclear where all this leaves the home-grown solutions that Mullen and Stephen champion.
Mullen says time is of the essence for geothermal before other jurisdictions catch on. Older geothermal technology taps into naturally heated underground reservoirs of brine water to create heat or electricity. Mullen’s plan uses a newer “closed loop” system that generates electricity by bringing heat to the surface from dry or wet underground rock through non-toxic fluid sealed in a pipe.
Geothermal was long shunned as expensive, especially when fossil fuels weren’t as much an environmental concern, but advances in technology are making it more cost competitive.
“Once it starts elsewhere, the cost is going to come up to what the market will bear. The resources, like oil patch drilling equipment — we’d be on a 20-year waiting list and it would be much more expensive,” says Mullen. “Nova Scotia can be at the front of the curve to be the one to capture those resources. We need big companies to come to Nova Scotia. Once this takes off, it would be very difficult to get them here to build.”
Mullen made the business case with Environment Minister Tim Halman and Deputy Minister of Natural Resources and Renewables Karen Gatien in December. He’s had some follow-up with bureaucrats and senses some enthusiasm but isn’t sure where he stands.
If he gets a greenlight, Nova Scotia Power would ultimately be the buyer of his geothermal power. But he sees little point in a meeting. When he was looking at the possibility of taking over old hydropower plants to extend their life by refurbishing them, company officials told him they wouldn’t be open to him buying any of the aging assets because doing so would create a competitor. (Read more in this 2021 Unravel Halifax story.)
Mullen wonders if the fear of political backlash is holding up proposals like his that would help get off coal and diversify the energy mix.
“This affordable, clean, baseload power would be the crown jewel of all of Nova Scotia’s energy mix,” he says. “You would think they’d be all over our proposal and trying to facilitate.”
The energy overhaul is an opportunity that will affect generations, he adds. “We need to create a strategy for Nova Scotia, not for Nova Scotia Power.”