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Canada province with mind of its own -- Nova Scotia's small scale approach

Nova Scotia Power has released a request for proposals (RFP) for 30 MW of large scale renewable energy projects, just days after announcing it accepted all 17 bids, 15 of them wind, in an earlier solicitation for projects of 2 MW and smaller in size. The two calls are part of a three-part plan by the utility to add 60 MW of renewable energy generation to the province's electricity system. The third piece is a 10 MW net metering program, not yet specified, for generators under 100 kW.

The deadline for proposals in the 30 MW RFP is January 22. NSP plans to announce the winners March 1, sign 15 year power purchase contracts within 30 days and start receiving power before the end of 2005. Nova Scotia Energy Minister Cecil Clarke said the RFP puts the utility well on its way to meeting the province's new renewable energy standard, which says that by 2010, 5% of Nova Scotia's electricity supply must come from renewables installed after 2001.

Already under negotiation are contracts between the utility and successful candidates in a request for 20 MW of new generation from small scale projects with a generating capacity between 100 kW and 2 MW, released in September. In late October, Bob Johnson of Nova Scotia Power (NSP) announced the utility had received 28 MW worth of bids and would take them all "in order to accelerate development of energy from renewables." The 15 wind projects, proposed by six developers, total 25 MW, while a single biogas project will generate 2 MW and one biomass project will generate 1 MW.

"The successful producers are at different stages of readiness right now," says NSP's Alana MacLeod. "So we expect to have 24 MW in by the end of 2005. The balance will be in 2006."

positive

Will Apold, chair of the Renewable Energy Association of Nova Scotia, says the industry likes the utility's decision to target smaller scale projects in a separate solicitation. "We think it is positive that the power corporation has recognised there are opportunities for smaller developers on the distribution system."

The apparent success of the program thus far, however, has not been without controversy. The first solicitation differed from the current RFP in that it offered generators a fixed price for their power, ranging from C$65.27/MWh to C$70.73/MWh depending on a project's location. Seven producers, two of which were successful, filed complaints to the Nova Scotia Utility and Review Board (URB) that the price, which transfers all greenhouse gas emissions credits to the utility, is too low.

"Those complaints are still registered," says Robert Leth, Eskasoni Power & Energy's renewable energy advisor. The company, owned by the Eskasoni First Nation on Nova Scotia's Cape Breton Island, is both a wind developer negotiating a contract with NSP and complainant to the URB.

Leth is also upset by NSP's decision to claim half, or C$0.005/kWh, of any payments made under the federal Wind Power Production Incentive (WPPI), a program the federal government says is intended to inspire further support from the provinces and utilities. The utility's price, says McLeod, includes an embedded "customer-funded incentive" -- the amount of which she would not disclose -- for producers who did not apply for or are not eligible for WPPI. For those who do apply, she says "we are reducing the incentive we pay because they are receiving it from WPPI." The results of the RFP, she adds, show that "obviously the price is fair."

Porsche showroom

Leth, however, points out that NSP's requests for proposals are the only game in town. "We've inadvertently become the basis for their argument that the prices are fair in the marketplace because of the level of response to the RFP," he says. "We have to decide the good outweighs the bad. We're not committing financial suicide here. We're not putting up projects that are going to lose money. The math has been done. The financing is in place. The wind has been measured. We're ready to go, but there are no plans for us all to spend Saturday afternoon at the Porsche showroom."

The current RFP for projects larger than 2 MW will also transfer greenhouse gas emission reduction credits to the utility, but will not affect a wind producer's WPPI payments.

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