Amendments to electricity legislation in Atlantic Canada will create new opportunities for developers, investors and lenders, and allow for more efficient procurement of renewable power projects in these jurisdictions.
Clean Power Goals in Nova Scotia
In October of 2021, the province of Nova Scotia passed The Environmental Goals and Climate Change Reduction Act. 2021, c. 20, which contains 28 ambitious climate goals to reduce greenhouse gas emissions and move towards clean and renewable energy, among other things. Recently, the Province has shifted its focus to developing local renewable power sources and has made legislative amendments to spur the procurement of new renewable energy projects.
To achieve this, the Province of Nova Scotia unveiled their Clean Power Plan (the “NS Plan”) on October 13, 2023, which will act as a roadmap for increasing local renewable energy resources. Currently, the Province receives over 60% of its electricity from coal and natural gas. The NS Plan proposes being 80% powered by renewable resources by 2030, which is estimated to require a significant buildout of approximately 1000MW+ of new wind capacity, 300MW+ of new solar capacity, and at least 300MW+ of new battery storage and deployment facilities.[1]
The Nova Scotia Electricity Act Amendments
New amendments to the Electricity Act (Nova Scotia) (the “NS Act”) received Royal Assent by the Nova Scotia legislature on November 9, 2023 and are now in force. The amendments set out to achieve two main objectives.[2]
- First, the amendments target Section 4AA of the NS Act (governing “sleeved” power purchase agreements), and expand the powers of the Minister of Natural Resources and Renewables to compel a public utility to enter into an agreement for the purchase and/or sale of renewable low-impact electricity to specified customers. With these amendments the Minister may compel a public utility (regulated under the Public Utilities Act) to enter into power purchase agreements directly with retail suppliers of renewable low-impact electricity. Once purchased, the Minister may compel the public utility to sell power directly to one or more specific customers. These amendments facilitate large-scale electricity customers buying electricity from a renewable low-impact producer at a set price, with the sale and delivery of electricity being managed by the public utility.
- Second, the amendments make changes to Section 4D of the NS Act, empowering the Governor in Council (in addition to the existing powers of the Minister of Natural Resources and Renewables), to compel a public utility to enter into an agreement for the purchase of services from an energy-storage project, and to prescribe an energy-storage project that is proposed by a public utility. This change allows the Nova Scotia government to quickly approve innovative energy storage projects that a public utility is developing.
Together, these changes represent the progressive posture that the Government of Nova Scotia is taking to encourage the procurement and development of clean energy projects in the region. The changes facilitate renewable power and energy storage developers to compete in the Nova Scotia market and streamline the procurement of renewable power and energy storage, creating new opportunities for equity investors, lenders, contractors and other stakeholders in the renewable power industry.
Proposed Amendments to New Brunswick Electricity Act
The Province of New Brunswick has also committed to aggressive climate goals with a focus on phasing out coal-fired generation and driving towards net-zero targets. On October 31, 2023 the New Brunswick Minister of Natural Resources and Energy Development introduced amendments to the Electricity Act (New Brunswick) aimed at increasing opportunities for the sale of clean power and promoting nuclear development.[3]
Notably, the amendments would require New Brunswick Power to purchase a portion of its electricity from two advanced small modular reactors (“SMRs”) and the legislation includes a carve out allowing the Government of New Brunswick to mandate a maximum price for electricity from these SMRs. There are currently two SMRs in development in New Brunswick that are expected to be operational in the 2030s, which these amendments would benefit. The Bill proposing these amendments passed its Second Reading in the New Brunswick legislature on November 1, 2023.
Opportunities for Indigenous Communities
We anticipate that these legislative amendments and efficiencies in renewable procurement will also provide more opportunities for Indigenous communities and organizations to become involved in new renewable power projects in Atlantic Canada. A number of Indigenous communities have recently announced equity ownership in solar, wind and battery storage projects in Nova Scotia and New Brunswick and certain Indigenous communities recently announced investment into the current SMR projects in New Brunswick.[4] With more efficient procurement of renewable projects, it will make equity ownership opportunities much easier and more plentiful for Indigenous communities.
The Outcome
The amendments to electricity legislation in Nova Scotia and New Brunswick represent a step forward for Atlantic Canada as it aims to attract innovative project developers, investors and lenders on its journey to decarbonize. Between these ambitious objectives, the appetite for renewable resources, the proximity to North Atlantic winds and the adoption of innovative technologies such as SMRs, Atlantic Canada could emerge as a renewable energy superpower in the not-too-distant future.
Stikeman Elliott’s Energy Group will continue to provide further updates on these legislative developments and has the expertise and experience to assist developers, investors, lenders and Indigenous communities in navigating energy projects in Atlantic Canada.
The authors would like to acknowledge the support and assistance of William Brown, articling student at law.
[1]Nova Scotia Power Evergreen IRP (nspower.ca)
[2]Nova Scotia Legislature - Bill 337 – An Act to Amend Chapter 25 of the Acts of 2004, the Electricity Act (nslegislature.ca)
[3]Legislative Assembly of New Brunswick - Bill No. 10 – An Act to Amend the Electricity Act (https://www.legnb.ca/en/legislation/bills/60/3/10/an-act-to-amend-the-electricity-act)
[4] News Release – Government supports partnership on small modular reactor development (https://www2.gnb.ca/content/gnb/en/news/news_release.2023.09.0474.html)
[View source.]
