Let’s talk about batteries: Nova Scotia Power’s latest development in renewable energy
In conjunction with our upcoming sponsorship of the Halifax Chamber of Commerce luncheon, featuring the Minister of Energy and Natural Resources the Hon. Jonathan Wilkinson, we are pleased to present a Thought Leadership article highlighting one of the many renewable energy topics to be discussed.
By Nancy Rubin and Marina Luro[1]
In a promising new development for Nova Scotia’s transition to renewable energy, the Nova Scotia Utility and Review Board (“NSUARB”) recently approved NS Power’s plan to build three battery energy storage systems (“BESS”) adjacent to existing substations.
Toward a renewable Nova Scotia
Under Nova Scotia’s Clean Energy Plan, the province aims to phase out the use of coal and achieve 80 per cent renewable energy by 2030, thereby reducing greenhouse gas emissions and propelling Nova Scotia into a green future. The Plan contemplates development of substantial amounts of renewable energy, including through wind and solar technology.
As every Nova Scotian well knows, Nova Scotia is windy. Onshore and offshore wind capacity creates great potential for Nova Scotia to harness wind and convert it into green energy. The Clean Energy Plan aims to add 1,000 MW of new wind energy by 2030, in addition to the 370 MW already in the works.
Batteries are required to maintain power and ensure grid stability while adding substantial amounts of wind energy to the system, which is inherently variable and dependent on nature. To facilitate and encourage this, the Government of Nova Scotia amended the Nova Scotia Electricity Act, adding section 4D(9), with regulation-making power to prescribe an energy-storage project. The Governor in Council passed the Prescribed Energy-Storage Projects Regulations, December 21, 2023, which provides that the NS Power BESS Project is a prescribed battery-energy project, and sets out certain requirements for the Project.
Taking a closer look at BESS
The Regulations specify NS Power’s BESS project of three, 50 MW 4-hour duration lithium-ion grid-scale batteries with an electricity storage energy rating of 200 MWh each. Each battery must be housed in a separate facility, adjacent to existing substations at (i) Bridgewater, Lunenburg County; (ii) White Rock Road, Kings Country; and (iii) Spider Lake, Halifax County.
NS Power submitted a proposed plan for the BESS Project to the NSUARB for approval of the capital expenditure. The BESS Project will have the following key features:
- Dispatchable, firm capacity – The BESS can provide continuous and reliable energy for four hours at full output (150 MW) to meet peak demands, or at lower output for 12 hours.
- Energy time shifting or arbitrage – The BESS has the ability to store low-cost energy generated off-peak to use during on-peak hours. The BESS typically will charge during high wind/low usage periods, generally overnight, and use that energy to meet the demands of the low wind/high usage periods generally experienced in the mornings.
- Grid frequency and voltage support – The ability to maintain grid stability by sensing and responding to fluctuations in system frequency thereby mitigating the effects of voltage spikes and dips.
- Spinning reserve – The ability to respond quickly to unexpected grid changes, through spinning reserve – an online generation capacity that is synchronized with the grid to allow for near instantaneous responses to disruptions.
- Grid flexibility through response to controlled setpoints – The NS Power System Operator (and after transition, the new Independent Energy System Operator) will be able to ensure that the system frequency remains within the limits established by the Energy Control Centre by setting power levels for the BESS to automatically respond to.
The total cost for the BESS Project is estimated to be $354 million. However, NS Power received approximately $116.6 million in funding from the Federal Government through Natural Resources Canada’s Smart Renewables and Electrification Pathways (“SREP”) Program, and from Natural Resources Canada’s Electricity Predevelopment Program (“EPP”), thereby reducing the cost to ratepayers to $237.7 million.
The NSUARB approved the BESS Project on June 13, 2024, finding that it is “necessary” as it is required to meet the Regulation, and that the cost of the Project is justified and reasonable, and it aligns with government environmental policies and targets. The NSUARB did impose reporting obligations on NS Power to ensure the Project remains on track. The Project is being developed under an Engineering, Procurement and Construction (“EPC”) contract and on July 2, 2024, NS Power executed an EPC agreement with e-STORAGE, which is part of the Canadian Solar Inc.’s majority-owned subsidiary CSI Solar Co. Ltd.
NS Power plans to have two of the three sites up and running in 2025, with the third running in 2026. This puts Nova Scotia on the right track to reaching its goal of phasing out coal and transitioning to 80 per cent renewable energy by 2030.
This client update is provided for general information only and does not constitute legal advice. If you have any questions about the above, please contact a member of our Energy Group.
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[1] At time of publication, Marina Luro was employed with the Firm as a summer student.
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