The winds of change (part 3): Newfoundland and Labrador releases wind energy guidelines

By: John Samms, Matthew Craig, Dave Randell,  and Jayna Green

On July 26, 2022 the Province of Newfoundland and Labrador (the “Province”) released “Guidelines: Nominating Crown Lands for Wind Energy Projects” (the “Guidelines”). Described as “the first step of certainty,” by Minister Andrew Parsons, this announcement and release of the Guidelines marks a substantial development in renewable energy in the Province. This article provides a brief overview of the Guidelines and details the future path ahead for entities looking to invest in wind farm projects in the Province.

Stated Purposes of the Guidelines

The Guidelines explain the evolution of the Province’s wind power policies, mentioning the establishment of the 2007 wind moratorium and the subsequent changes announced on April 5, 2022. For a more detailed description of those rules please see here.

The Guidelines suggest that renewable energy in the Province is abundant, with opportunities to develop green hydrogen and ammonia resources in addition to wind generation. The Guidelines are cited as an initiative to move the Province’s 2021 “Renewable Energy Plan” forward while ensuring long-term benefit to the people of the Province.

While the underlying goals of the Guidelines are important, the Province’s announcement is clear: the time for change has come and those looking to capitalize on the Province’s abundance of renewable resources must act quickly and effectively.

The Nomination and Bid Process Starts Now

Proponents intending to capitalize on wind generation opportunities must hit the ground running. The Province has introduced a two-phased approach to wind generation on Crown Lands and the clock has started ticking.

Phase 1, Calls for Land Nominations, begins immediately and will run until October 1, 2022. Government is asking that interested parties provide nominations for areas within which they wish to develop wind energy projects. At this stage, all Crown lands are available for submission subject to specific exemptions. While respondents are encouraged to be strategic with their nominations, it is evident that the Province is seeking to incentivize proponents and gauge the competition for particular parcels of land. The Government has not limited the amount of land a proponent may show interest in nor are proponents limited to one specific geographic location.

Once Land Nominations are received, they will inform the subsequent decisions made by the Department of Industry, Energy and Technology (“IET”) in selecting land area(s) to be included in future bidding processes. While the Call for Nominations is a non-competitive process, Phase 2, Call for Land Bids, is a competitive process. Details on the evaluation process will be announced in mid-December.

Newfoundland and Labrador Hydro Interfacing

Newfoundland and Labrador Hydro (“NL Hydro”) will be involved in the review of Land Nomination and bid submissions. NL Hydro will be responsible for reviewing the technical viability, and potential rate impacts of assessments. In doing this, NL Hydro may provide insights into the cost of interconnection and supply of energy to respondents where applicable, and will be responsible for providing technical parameters to support respondents as they develop land nominations. In a press conference, the Minister of IET explained that technical viability will be assessed prior to the commencement of the Phase 2 competitive process.

Currently, NL Hydro is conducting wind integration studies to assess the amount of wind generation that can be supported by the grid. The results will be made public, with the goal of ensuring transparency regarding project viability.

NL Hydro will also support project proposals throughout the bidding process by providing reasonable preliminary consultation to proponents and relevant information regarding systems. NL Hydro will not be performing individual system studies for proponents, rather it will initiate detailed system studies for successful bidders through it’s Interconnection Process.[1]

NL Hydro’s involvement will not stop here, as it’s currently involved in a “Reliability and Resource Adequacy Review” to “ensure sufficient and reliable long-term supply of energy and capacity for customers.” The results of the review will influence the number and location of new wind resources, with the final report submitted to the Public Utilities Board on September 30, 2022.

Conclusion

The Province is no stranger to natural resource development. A recent feasibility study of hydrogen production, storage, distribution, and use in the Province estimated that development of hydrogen production in the Province and attraction in new industry could result in new green jobs and a hydrogen sector valued at more than $11 billion per year by 2050. That same study found that if Atlantic Canada captured 5% of the European market for hydrogen, the export opportunity could be $9 billion annually in the Province. While questions remain, a new industry is upon us.

Now publicly described as being a global “best in class resource,” with respect to wind energy, the Province’s opportunity to demonstrate leadership in the global transition to green energy is upon us and navigating a new industry means having the knowledge and support to foster success. Lawyers within Stewart McKelvey’s Energy Group have the expertise to provide this support, and to help clients navigate this novel process, as well as the policy changes to come.

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] The policy states that the Interconnection Process will begin by proponents submitting a formal interconnection request. Hydro will conduct system impact and facilities studies to confirm costs for proponents and previous preliminary system upgrade requirements. NL Hydro’s interconnection process will be executed in an effort to provide proponents with accurate cost estimates and schedules sufficient to support interconnection and power purchase agreement negotiation and regulatory approval.