June 15, 2011 - Nova Scotia feed-in tariff

Wednesday, June 15, 2011

Nova Scotia is poised to set favorable rates for community-scale renewable electricity projects.  This community-based feed-in tariff can help small projects get off the ground.

Back in April 2010, the Nova Scotia provincial government released its Renewable Electricity Plan (32-page PDF).  This document, subtitled “A path to good jobs, stable prices, and a cleaner environment”, sets forth a detailed plan “to move Nova Scotia away from carbon-based electricity towards greener, more local sources, and sets a commitment to reach 25% renewable electricity supply by 2015 – and a nonbinding goal of 40% by 2025.

While the plan envisions that most of the new renewable energy needed to meet these goals will come from “industrial-scale projects”, a key element of that plan targeted at smaller projects is the community-based feed-in tariff (COMFIT).  The COMFIT is designed to benefit 100 megawatts of qualified renewable projects connected to the grid at the distribution level.  To qualify for the COMFIT, a project must be developed or owned by municipalities, First Nations, co-ops, or non-profit groups, or be a small business operating through Community Economic Development Investment Funds.

Feed-in tariffs are widely used in the global renewable energy context.  As the Nova Scotia plan notes, “[m]ore than 45 jurisdictions around the world, including Spain, Germany, Ontario, and Vermont, have established feed-in tariffs (FITs) that support and encourage small-scale and community ownership.”

In Nova Scotia’s case, the feed-in tariff plan is designed to start small, with a limit of 100 MW of pilot projects.  The plan explains this cautious approach by noting that it is technically difficult to interconnect intermittent generation at the distribution level.  The plan also describes the balancing act between facilitating small-scale development while keeping ratepayer costs low:

Government has chosen not to extend the COMFIT to larger projects. Just as a commercial farm can produce vegetables cheaper than a garden patch, an industrial-scale wind farm can produce electricity cheaper than a backyard turbine. There are many economies of scale in renewable power production. Nevertheless, a conscious decision has been made to encourage small as well as larger renewable electricity projects. This is partly to ensure widely dispersed energy sources, and partly to encourage rural community economic development. A FIT will result in somewhat more expensive electricity than open competitive bidding, but it gives these smaller projects a degree of market certainty.

The plan continues:

Renewable electricity produced from small local projects will be slightly higher priced than electricity from large-scale projects. But since the total amount of power from COMFIT projects will start out small, the overall impact on rates is low—estimated at less than one percent on a typical consumer’s bill. Of course until the UARB sets the COMFIT rate, and we see how fully it is taken up, the precise impact can’t be calculated with certainty.

The Nova Scotia Utility and Review Board has held a public hearing on the COMFIT program rates, and is expected to issue an order finalizing tariffed rates early this summer.  Staff's consultant proposed the following tariff rates:
  • $452 per MWh for wind projects ≤50 kW
  • $139 per MWh for wind projects >50 kW
  • $156 per MWh in year 2012 for biomass CHP projects, composed of a fixed component of $94 per MWh and an escalating component of $62 per MWh representing the cost of fuel
  • $140 per MWh for run-of-river hydro projects
  • $652 per MWh for in-stream tidal projects.

1 comment:

Martin Clooney said...

World Trade Organization has announced a program which will increase the use of Solar energy known as FIT (Feed in Tariff) is good for our ecological system as it increase the use of green energy.
Feed in Tariff Program

Post a Comment