Resetting the switch on its energy future

When, in the waning months of 2009, former New Brunswick premier Shawn Graham announced his deal to sell the province’s energy utility to Hydro-Quebec, he did so with the confidence and bravado of a man who truly believed he was doing his fellow citizens an enormous favour.

After all, at that time, NB Power accounted for half of New Brunswick’s accumulated $7-billion debt. The refit of the Point Lepreau nuclear generating station outside Saint John was foundering (years behind schedule, and millions of dollars over budget). Natural gas development was hobbled by regulatory red tape and a 15-year-old arrangement with western-Canadian-owned Enbridge that many industrial users considered monopolistic and uncompetitive. Coal and oil-fired plants needed expensive facelifts. And renewable energy technologies were not yet in the wind, the water or the sun-baked soil for those fortunate enough to own a piece of heaven on uncertain earth.

Why not, then, make the grand play for solvency? Why not solve the energy and fiscal problems of a province teetering at the brink of bankruptcy with one bold move? Why not make the clarion of “transformational change” and the boast of economic “self-sufficiency by 2020 or bust” hardcore reality? Why not, indeed?

Flash forward a year, and the future of New Brunswick’s energy options remains no less murky, though the debate has utterly reshaped the province’s political landscape. David Alward and his Progressive Conservatives swept into power last September – assigning Graham and his Liberals the dubious distinction of becoming the first one-term government in modern New Brunswick history – by tapping public outrage over the attempt (which ultimately failed) to sell out to Hydro-Quebec. Now, a new premier sits in Fredericton, aware of the difficulties and yet cognizant of just how explosive the energy file can be for anyone who seeks to remain in public office.

Still, the November Throne Speech did provide some clues to Alward’s priorities. “Your government [is committed] to putting New Brunswick first with focussed leadership,” it promised. “[We] will act on this by addressing [the province’s] energy challenges. [We] will put in place a legislative committee to ensure that the refurbishment of Point Lepreau is the number one priority for NB Power and help bring that project to a successful close. NB Power has been directed to establish a mechanism to implement a three-year freeze of electricity rates for New Brunswick ratepayers. That work is underway. As well, an Energy Commission has been established to develop a progressive, long-term provincial energy policy and provide guidance on both the future direction of NB Power and New Brunswick’s energy sector. The commission will release a 10-year strategy with specific recommendations in 2011.”

Meanwhile, the speech declared, “your government will foster the growth of the mineral and petroleum sectors in New Brunswick. In particular, the expansion of the natural gas sector in an environmentally responsible manner will be promoted. New regulations will be developed under the Petroleum Act to govern the exploration and extraction of minerals and gases.”

Of course, none of this will be easy, as Craig Leonard told Atlantic Business Magazine in an interview not long ago. The province’s new minister of Energy and the minister responsible for the Energy Efficiency and Conservation Agency of New Brusnwick (which incorporates the operations of Efficiency NB), knows he has his work cut out for him. But, he appeared both calm and optimistic, even about Point Lepreau – where Atomic Canada of Energy Ltd. (AECL) has been struggling with engineering and mechanical problems related to the reactor’s calandria tubes – and the possibility of constructing a second nuke in the not-too-distant future.

“Obviously, our first job is to get that plant back up and running,” he said. “But we certainly feel a lot better about that today than we did a few months ago. We’re confident that AECL has actually figured out the problems and have come up with solutions that work. As for the potential of building a second nuclear reactor, this is an idea that is on my desk, for sure. But I think everyone understands that we’re going to have to reset the whole process and take a look at what the business case actually is, and move forward from there. The key thing we have to remember in New Brunswick is that Lepreau, itself, is a great asset.”

Apart for this, however, Leonard and other energy experts in New Brunswick agree that the province’s main strategic advantage lies in the diverse mix of generating options in can deploy to erect a more efficient and cost-effective generation, distribution and transmission system. At the moment, the province’s energy needs are largely supplied by coal, diesel and oil-fired thermal stations (2,400 megawatts); hydroelectric plants (890 megawatts); and Point Lepreau, when it’s operating (700 megawatts). Less significant sources are natural gas and renewable forms of power, specifically wind.

And about this last option, Yves Gagnon, a professor of mechanical engineering at the University of Moncton and the province’s recognized authority on the subject, doesn’t hide his enthusiasm. “The fact remains,” he says, “New Brunswick has the potential to become the Saudi Arabia of wind. The wind resource map my team and I unveiled in 2007 clearly showed exceptional wind potential for 4,000 megawatts of installed wind-generating capacity along the Acadian Peninsula.”

Moreover, he says, another research document he released at around the same time stipulated that, “The profits generated by a 100 megawatt wind farm can reach $200-million over the 25-year life cycle of the project. Furthermore, since these estimates do not take into consideration eventual revenues from the trading of carbon credits, the profits could be much higher once carbon markets are introduced into the economy.”

For this reason and others, Gagnon is sceptical about the benefits of nuclear technology, which he believes is dirty and horrendously expensive once all the “externalities” are considered, such as plant refurbishment costs and the safe disposal of spent, radioactive fuel. “There are a lot of misconceptions about renewable energy,” he says. “Too many people here think wind, tidal, solar and biomass alternatives aren’t viable. But these technologies and processes are being put to use and to good effect in other parts of the world.”

Leonard doesn’t disagree. Not exactly, at any rate. New Brunswick currently maintains less than 300 megawatts of installed wind generation; and there’s a reason for this. “When he [Gagnon] says New Brunswick could be the Saudi Arabia of wind, I think he’s absolutely right in that we have the right geography,” the minister says. “I also think there’s no question about the eventual ascendancy of renewables.”

But, he adds, “There are also commercial and market realities to consider. Wind has its own set of challenges. It’s a more expensive form of electricity for us to produce and bring on to the grid. It’s more expensive also in terms of balancing it with other forms of generation. The windmills only blow so much of the percentage of the day. Again, it’s about the balance. In New Brunswick, we have excellent hydro, wind, nuclear (when it’s back on line, we will own a fantastic, brand new 30-year reactor). We have all these attributes to our generation mix. I’m very leery of going full bore in one direction.”

Indeed, new opportunities for energy diversification are emerging. Shale gas exploration in the province promises new export potential thanks to New Brunswick’s advantageous proximity to energy hungry customers in New England, where the cheap, reliable fuel is quickly displacing other sources of power in the marketplace.

As well, Newfoundland and Labrador’s and Nova Scotia’s partnership to wheel Lower Churchill hydro power via undersea cable into the Maritimes could have an enormously beneficial effect on rate stability and transmission revenues in this province, should the new government in Fredericton cooperate with its regional counterparts.

In the end, if New Brunswick’s energy options remain murky, at least – or so it appears – there are options for a change. And this should be cheery news to legislators who might, for once, wish to avoid committing political suicide.

2 Comments to “Resetting the switch on its energy future”

  1. Avatar Samantha Maclean // January 10, 2011 at 11:03 am // Reply

    Once again Alec Bruce has done a bang-up job … of ignoring the Irving Empire/Elephant in the room!

    It was chiefly for the benefit of the Irving interests that the Point Lepreau plant was conceived and carried out. The Irvings’ energy needs “forever” [into the next generation of Irvings…] would be nicely met by the Canadian taxpayer. The CANDU turned out to be the little engine that can’t do, so the Irvings pressed for rationalizing the energy grid of the Maritimes under Hydro-Quebec. The peasantry were revolting, the deck-chairs at Titanic- on-the-St.-John (i.e., the Legislature at Fredericton) suitably rearranged, and… Kenneth-Colin’s your uncle! here we are…

    • Thank you, Samantha Maclean, for your comments. As you clearly know far more than I about the Irving agenda, I suggest you write a book enumerating and delineating the basis of your present thesis. I’m certain it would be a great, rollicking read for lovers of fiction.

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