Federal Government, Nova Scotia, and Newfoundland and Labrador clearing the way for offshore wind development

Sadira Jan, Dave Randell, and James Gamblin

Nova Scotia (“NS”) and Newfoundland and Labrador (“NL”) are positioned to become international leaders in offshore wind and green hydrogen. Each province has expansive offshores areas, abundant wind resources and mature regulatory regimes for offshore petroleum development that are being expanded to regulate offshore wind and hydrogen development. This article will discuss how the Federal Government, NS and NL have opened the door for the development of offshore wind and associated green hydrogen production. These energy sources will help meet Canada’s clean energy needs and the energy needs of Canada’s international partners.

Regulation of Offshore Development in NS and NL

In April, 2022 it was announced that the Nova Scotia Offshore Petroleum Board (“C-NSOPB”) and Canada-Newfoundland and Labrador Offshore Petroleum Board (“C-NLOPB”) would each be modernized with expanded mandates to include the regulation of offshore wind and green hydrogen production. Each board will be renamed to reflect their expanded mandates.

Oil and gas activities in the offshore areas of NS and NL have been regulated through the CNSOPB and CNLOPB for the past thirty years. The boards are jointly organized by the Federal Government and each of NS and NL in light of concurrent or unsettled provincial and federal responsibility over offshore areas. Currently, the boards regulate all aspects of oil and gas projects in the offshore, including licensing, compliance, exploration and decommissioning. It is expected that the reconstituted boards will have similar regulatory jurisdiction for offshore wind and green hydrogen projects.

Regional Impact Assessment for NS and NL Offshore

Currently, the Federal Impact Assessment Agency of Canada is working with indigenous groups, NS and NL on developing Regional Assessments for offshore wind development under the Impact Assessment Act, SC 2019, c. 28, s. 1 (the “IAA”). Impact Assessments under the IAA are undertaken in areas where development is anticipated in the future in order to coordinate the planning and management of future project-level impact assessments. Regional Impact Assessments, once developed, will also inform and create efficiencies for future project-level assessments in the NS and NL offshore areas.

The offshore areas of NS and NL are composed of lands subject to Provincial and Federal jurisdiction. Accordingly, the IAA provides that the Federal Government may enter into an agreement with a province to jointly establish a committee to conduct a Regional Assessment (IAA, s. 93(1)). Terms of reference for a joint committee, including the timeframe for the completion of the Regional Assessment must be developed (IAA, s. 93(3)) before the work of the Regional Assessment can commence. It is expected that draft agreements between the Federal Government and NS and NL, respectively, and draft committee terms of reference will be released for indigenous and public review and comment in October 2022.  The agreements and terms of reference are expected to be finalized before the end of 2022, with Regional Assessment work to begin in January 2023. Further, it is expected that the Regional Assessment will be complete within approximately 18 months.

The portion of the Canada-Nova Scotia offshore area forming part of the Regional Assessment study area is excerpted in at Figure 1, below.

Figure 1^[1]

Notably, the Bay of Fundy is excluded from the study area as tidal energy development is underway in this region.

With this timeframe in mind, NS has announced a target to offer leases for five gigawatts of offshore wind energy by 2030 to support the development of the green hydrogen industry. The first call for bids is scheduled to be in 2025. Once the five gigawatt target is met, subsequent calls for bids will be based on market opportunities. NS will also be releasing a hydrogen action plan in 2023 in support of its ongoing work in the area.

The push by NS and NL to develop offshore wind forms part of each provinces broader push to develop clean energy sources. In August, 2022, NS awarded contracts for five onshore wind projects expected to generate a total of 372 megawatts or 1,373 gigawatt hours per year of electricity representing approximately 12 per cent of total energy consumption for NS.

In 2022, NL removed barriers to the development of onshore wind projects, signaling a major shift in its energy policy. See our “Winds of Change” series for a detailed discussion of the state of onshore wind development in NL.

Sadira Jan is a partner in the Halifax office, with a practice focusing on renewable energy, financing transactions, mergers and acquisitions, as well as general corporate law. Sadie has extensive experience acting as lead counsel for onshore wind development projects and acts in the development, implementation and testing of tidal power in Atlantic Canada.  She has been recognized by Lexpert in Energy law (electricity).

Dave Randell is a partner in the Halifax office, with extensive experience across various industries including energy,  insurance, mining, media, manufacturing and technology. He has acted as lead advisor for a number of noteworthy Canadian and international clients in the energy sector.

James Gamblin is an associate in the Halifax office, with a practice in the areas of renewable energy, leasing, mergers and acquisitions and general corporate law. Jamie’s practice focuses advising clients regarding legislative and regulatory compliance. Jamie has a policy background, and holds Master’s degree in Public Policy and Public Administration.

This update is intended for general information only. If you have any questions on the above we would invite you to contact the authors or any other member of our Energy Group.

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[1] Impact Assessment Agency of Canada, “Regional Assessment of Offshore Wind Development in Newfoundland and Labrador and Nova Scotia: Regional Assessment Planning Workshop – July 2022”, online: https://iaac-aeic.gc.ca/050/documents/p83514/144523E.pdf