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Analysis: Nova Scotia pulls plug on community tariff

CANADA: The Nova Scotia government in Canada has pulled the plug on a programme that encouraged the development of small-scale, community-based renewable-energy projects, despite strong demand from local residents wanting to invest in wind.

COMFIT project Martock Ridge (pic: Scotian WindFields Inc)
COMFIT project Martock Ridge (pic: Scotian WindFields Inc)

"It is disappointing. It was a good programme, and I think a lot of people saw the benefits of it," said Andy MacCallum, vice-president of developments for Halifax-based Natural Forces Wind.

In some ways, the province's community feed-in tariff (Comfit) programme was a victim of its own success. Launched in September 2011, it targeted installation of 100MW of locally owned, distribution-connected renewable energy facilities.

The province now expects 125MW - mostly wind - online by the end of this year and has approved more than 90 projects totalling about 200MW.

"This is the right time to bring Comfit to a close. It has achieved its objectives," said Nova Scotia energy minister Michel Samson.

A review of the programme found Comfit projects have attracted C$35 million (US$27 million) in direct investment from Nova Scotians. The majority came through community economic development investments funds, which allow individuals to take an ownership stake in projects and at the same time receive tax benefits.

Natural Forces, for example, raised C$12 million from more than 1,000 local investors to move its five Comfit projects forward. "Every single time we had an offering it sold out early. Local Nova Scotians want to be investing in these projects. There is still a tremendous appetite out there," MacCallum said.

MacCallum believes politics played a role in the decision to scrap Comfit. It was introduced by the former New Democrat government, and the current Liberal government was elected on a promise of no new electricity price increases. Comfit pays C$0.131/kWh for wind projects larger than 500kW and, said Samson, there was a risk that continuing the programme would negatively affect rates.

But MacCallum argues that this ignores the long-term price stability the fixed-price contracts bring. The government also failed to consult with industry to see whether, with lower finance and equipment costs today, the tariff could have been lowered and the programme preserved.

Canadian Wind Energy Association president Robert Hornung said there are positive lessons other jurisdictions could take from the Comfit experience. While many provinces have talked about community-based wind as a priority, Nova Scotia is only one to actually accomplish it, Hornung pointed out.

"You can see it when you look at a map of wind farms in the province. There are a whole host of projects that are one turbine, two turbines, three turbines in size. We see that nowhere else in Canada," he said.

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