A Clean Energy Policy for Nova Scotia

Larry Hughes and Sandy Scott
Whale Lake Research Institute
P.O. Box 631, Station M, Halifax, Nova Scotia, Canada. B3J 2T3

This paper was originally presented in November 1993 to the IEE Conference on Renewable Energy, Clean Power 2001, held in London, England. In January 1995, the paper was submitted to the Electricity Review Panel Hearings (Nova Scotia Department of Natural Resources), held in Halifax.


INTRODUCTION

In 1990, Canadians produced some twenty-one tonnes of carbon dioxide (CO2) per person [1], ranking them among the highest per capita producers of carbon dioxide in the world [2]. Within Canada, there are regional differences in carbon dioxide production; for example, the province of Nova Scotia contributed over twenty-two tonnes of carbon dioxide per person [3].

Furthermore, energy usage in Nova Scotia is neither sustainable nor efficient. In 1988, over 90 per cent of Nova Scotia's energy requirements were satisfied by fossil fuels; by 2005, the demand for fossil fuels is expected to rise and the percentage supplied by fossil fuels may reach 93 per cent [4]. Nova Scotia's energy intensity (i.e., the ratio of energy consumption to gross domestic product) at 21 MJ (megajoule) per dollar of GDP is one of the highest in Canada and has essentially remained constant over the latest reporting period (1984 until 1991).

Nova Scotia's high carbon dioxide emissions can, in part, be traced to the Canadian Oil Substitution Program, a cooperative agreement between the Canadian federal government and the various provincial governments [5]. The oil substitution program was implemented to reduce Canada's dependence on foreign oil after the oil shocks of the 1970s. In Nova Scotia, the indigenous replacement for oil was coal, large deposits of which are found in the northern and western parts of the province.

The province's present energy policy is essentially one of laissez-faire, in which market forces are allowed to dictate the price and end-usage of fuels. This approach does not bode well for the future, either economically or environmentally. First, despite the reduction in imported oil, Nova Scotia still purchased over $600 million dollars (note, all dollar figures are given in terms of the Canadian dollar, worth approximately $0.78 U.S.) worth of oil in 1991 [6]; this figure is expected to rise slightly over the next decade. Second, despite the downturn in the Nova Scotian economy and the associated drop in electrical demand, projections by the provincial electrical utility indicate an increased electrical demand by the turn of the century [7], a demand expected to be met through coal-fired electrical generation [4]. This forecast suggests a policy that is diametrically opposed to the Canadian government's pledge to stablize national carbon dioxide emissions at 1990 levels by the year 2000 [8].

This paper recommends a policy whereby Nova Scotia's carbon dioxide emission levels could be reduced through the replacement of oil by wood and the implementation of co-generation (i.e., electricity and district heating) systems throughout the province. The paper also discusses the potential economic benefits of this scheme, notably increased local employment and decreased dependence on foreign oil.

BACKGROUND

Nova Scotia is the most easterly of Canada's three Maritime provinces. It is Canada's second smallest province (5.55 million hectares) and has a population of almost 900,000. Over the past decade, there has been a gradual decline in the traditional industries of fishing, mining, and forestry, with a corresponding rise in unemployment.

Primary Energy Demand

Nova Scotia's energy demand is supplied by four primary energy sources: coal, hydro-electricity, petroleum, and wood (see table 1). Of these four sources, all are indigenous, except petroleum, which is imported from Venezuela and the North Sea. Coal is found in the north and west of the province where there are some one billion tonnes of recoverable resource, enough for about 200 years at present rates of consumption [4]. All major hydro-electric sites have been developed in the province; however, there is some potential for privately-run micro-hydro stations.

Table 2 shows the sectoral energy demand for Nova Scotia. Unlike other provinces, residential energy demand is higher than all other sectors (except transportation), a reflection of the loss in traditional heavy industries associated with fishing, mining, and forestry.

Electricity

Electricity is generated, transmitted, and distributed by a single, privately-owned utility, Nova Scotia Power Incorporated (NS Power). As shown in table 3, NS Power relies heavily on coal for the generation of electricity. As of March 1992, NS Power's installed capacity was as follows: coal (1218 MW), oil (350 MW), hydroelectric (381 MW), and gas turbine (180 MW) [9]. NS Power is committed (by provincial legislation dating back to 1989, when NS Power was a provincially-owned utility) to purchasing some 50 MW of privately generated electricity. This electricity is expected to be produced by a variety of sources including small-scale hydro-electric stations, as well as co-generation plants located at several paper mills [10]. No future purchases of electricity from private producers are projected by NS Power.

Carbon Dioxide Sources

Three sectors of Nova Scotia's economy are responsible for more than eighty per cent of the province's anthropogenic sources of carbon dioxide: electrical generation (40%), transportation (27%), and residential (14%) [8].

THE FOREST RESOURCE

The land and fresh water area of Nova Scotia is some 5.55 million hectares, of which a total of 4.1 million hectares is forested [11]. Ownership of this land is broken down into federal government (0.1 million hectares), provincial government (1.16 million hectares), and private ownership (2.8 million hectares) [12]. Of the forested area, approximately 89 per cent (or 3.8 million hectares), is considered productive for forest management purposes.

Private ownership of the forest land is broken into small private (parcels less than 400 hectares in size) and large private (parcels larger than 400 hectares). Almost 50,000 parcels of land totalling over 1.9 million hectares are classified as small private and owned by some 30,000 individuals and organizations. The remaining 0.9 million hectares are in the large private category [12].

The Forest Industry

At present, Nova Scotia's forest industry consists of three broad segments: pulp and paper, wood products, and other speciality products and services [13]. The pulp and paper segment of the industry is composed of five mills: a kraft pulpmill (Scott Maritimes), a sulphite pulpmill and newsprint mill (Stora Forest Industries), a newsprint mill (Bowater Mersey), a paperboard mill (Minas Basin), and a hardboard plant (Canadian Pacific Forest Products). There are some 294 sawmills in operation throughout the province, the vast majority which produce under one million board feet of lumber. Speciality services include Christmas trees plantations, poles and pilings production, firewood, and maple syrup. There has been a slight decline in the number of people employed in the forest industry in Nova Scotia, from a high of 11,300 in 1987 to 8,200 in 1992 [14].

In the forests, softwoods are the predominant species, the majority of which are spruce. Although some forest land is quite productive at 36.6 tonnes per hectare of roundwood [12]; the provincial average is quite low. For example, in 1989, the total cut was 4.232 million cubic metres of roundwood [11], a figure that approximates 1.11 cubic metres per hectare or 0.41 tonnes per hectare.

Forest Management

Over the past thirty years, the rate of deforestation has increased dramatically in the province without an adequate reforestation program. This rate coincides with the province's opening up of the forest through a variety of legislative moves intended to attract industry to the province [15]. During this period, provincially owned land has been made available to the pulp and paper industry, and stumpage fees are some of the lowest rates in the country [16]. Furthermore, reforestation has been the responsibility of the federal and provincial governments; to date, the results of this policy have proved to be less than adequate. Where reforestation has taken place, the approach has been to plant a monoculture (typically spruce). As a result, there have been major infestations of spruce budworm, destroying large areas of forest [17]. In short, forestry practices in Nova Scotia are generally conceded to be poor and unsustainable [18].

Ironically, countries such as Russia are now considering the same techniques adopted by Nova Scotia in order to attract foreign industry. There is growing concern in Nova Scotia that given the opening up of regions such as Siberia, the remaining pulp and paper mills will shut down their operations and leave the province [19].

ENERGY FROM BIOMASS

Despite the gloomy outlook for Nova Scotia's forests, a number of studies suggest that, given proper forest management techniques, the forests could thrive and yield biomass in a sustainable fashion. If the forests could be worked as productive ecosystems, then selective cutting could supply much of Nova Scotia's energy needs.

There are a number of reasons why wood is an attractive fuel in Nova Scotia. First, under optimal circumstances, the forest industry is labour intensive, potentially offering employment to a large number of people. This is an important issue in Nova Scotia where unemployment stands at 13 per cent. Second, the net carbon dioxide emissions can be held at zero when using wood as a fuel if the trees that are removed are replaced [20].

Energy Potential

In 1989, 4.232 million cubic metres of roundwood were cut in Nova Scotia. Using the ratio of one cubic metre of wood to 0.37 ODt (oven dried tonnes) of wood, then Nova Scotia produced some 1.56 million tonnes of roundwood. Assuming that an equal amount of wood waste is left within the forest (i.e., 1.56 million tonnes), then the total energy available from the wood is 25 PJ (based on 16 MJ per kilogram of wood). This amount of energy is equivalent to roughly one-quarter of the province's total energy demand of petroleum in 1988 (excluding transportation), some 4 million barrels of oil. If the average yield per hectare could be increased to 1 tonne of wood, the available energy from Nova Scotia's forests would be about 60 PJ or more than 9.5 million barrels of oil.

Energy Utilization

There are clearly a number of ways in which this energy could be utilized, the most common way being direct combustion (the fuel of choice in about one-quarter of Nova Scotia's residential sector). Another alternative is co-generation (or CHP, combined heat and power), in which the wood is combusted, producing both electricity and district heating.

Given that a number of small co-generation plants could be established around the province (each producing 25 per cent power and 40 per cent heat), and assuming that a yield of 60 PJ per annum is achieved, then 15 PJ of electricity and 24 PJ of district heating could be produced. The amount of electricity produced is roughly half the provincial demand in 1988, meaning that there would be no need to import some 2.9 million barrels of oil; furthermore, there would be a decline in the demand for coal-fired electricity.

Ideally, every home in Nova Scotia would be connected to a local co-generation station. However, this is an unrealistic scenario given the provincial distribution of population. According to the 1986 census, only 38 per cent of the population lived in towns or cities where the number of dwellings exceeded 500 and had a population density of more than 400 people per square kilometre [21]. Despite this figure, the 24 PJ for heating could replace some three-quarters of the light and heavy-fuel oil demand for all sectors (excluding transportation), a reduction of over 3.9 million barrels of oil.

Costs

There are a number of commercial and public adminstration buildings throughout Nova Scotia that are using woodchips for heating purposes. For example, the Nova Scotia Agricultural College has a central heating plant that, in 1987, the heating plant was converted from oil to wood. Over the past three years the College has used some 7,800 tonnes of woodchips per year at a cost of $36 per tonne (this price varies depending upon moisture content).

At $36 per tonne (or 2.3 mills per MJ), woodchips compare favourably with the price paid by NS Power for coal and oil [9]. For example, in 1992, NS Power paid $70 per tonne of coal, a rate of 2.4 mills per MJ. Oil, at the world price of $24 per barrel, has a rate of 4.3 mills per MJ.

Employment Prospects

According to an earlier survey by the provincial Select Committee on Woodchip and Biomass [18], there are considerable economic benefits to using wood as a fuel. Some of the findings include:

DISCUSSION

Assuming that the co-generation scenario described in the previous section could be fully implemented, the province could reduce its foreign oil demand by some 6.8 million barrels of oil per year. Such a saving would keep over $160 million in the country while reducing the annual carbon dioxide emissions by over 2.8 million tonnes. Even if the penetration were only 30 per cent, the economic and environmental benefits would still make the proposal attractive.

However, there are a number of issues, peculiar to Nova Scotia, that will influence the possible implementation of a wood-based energy scheme.

First, despite vast sums spent over the past decade on questionable road projects, the province's transportation infrastructure has been sadly neglected. Of the four rail lines that spanned the province as recently as three years ago, one has been abandoned and two others are in the process of being abandoned. Without a good, reliable transportation network, moving wood to the centres of demand will be problematic, potentially reducing the public's acceptance of wood energy.

Second, coal is a politically sensitive issue in Nova Scotia since the coal mining regions elect almost one-quarter of the members of the provincial assembly. Therefore, any proposal that might threaten coal-mining jobs is avoided by provincial politicians. Since an increased usage of biomass could result in a reduction in the demand for coal, it is apparent that in the short term, at least, use(s) must be found for the displaced coal. Several alternatives exist, such as the gasification or liquifaction of the coal, ideally to produce a fuel for transportation.

Third, the refusal of NS Power to purchase privately generated electricity means that the electricity generated locally will probably have to be consumed within the region where it is produced. If sufficient co-generation plants begin operation, they could seriously cut into NS Power's profits, with potentially damaging results to all involved. There are a number of possible alternatives; for example, NS Power could replace its aging coal-fired plants with smaller co-generation plants, thereby staying in the generation business. On the other hand, NS Power could evolve into the provincial grid company, carrying electricity from independent producers to their contracted customers.

Fourth, the prospect of employment in a province where high unemployment has become a way of life should appeal to most people. The employment potential is not restricted to the forest industry: local construction industries could be involved in the construction of the district heating systems; the province's steel mill could be used to build the district heating pipe; and local foundries could construct the boilers. In addition, new employment opportunities could open within communities for people to operate the co-generation plants.

POLICY RECOMMENDATIONS

To achieve the potential economic and environmental benefits described in this report, the following policies are recommended:

CONCLUDING REMARKS

This paper has made several recommendations for a policy whereby Nova Scotia could improve both its economic and environmental climate. On the economic front, up to $160 million could be kept within the province, creating local employment; while on the environmental front, the substitution of co-generated biomass for oil could reduce the province's carbon dioxide emissions from twenty-two tonnes per person to nineteen tonnes per person. Further savings could be made by replacing coal-generated electricity with electricity from wood.

It is worth noting that during the research for this report, a number of earlier studies, all tax-payer funded, pertaining to the application of wood as a fuel source in Nova Scotia were uncovered, such as that done by CBCL Limited [22]. In every case where district heating was considered, it was recommended. None of these studies were ever implemented.

In the May 1993, provincial general election, an overwhelming majority of votes went to the former opposition party, who campaigned vociferously on two primary issues: job creation and improving the economy of Nova Scotia. The recommendations in this paper could help the newly elected government meet these campaign promises.

References

  1. A.P. Jaques. Canada's Greenhouse Gas Emissions: Estimates for 1990. Technical Report EPS 5/AP/4, Environment Canada, December 1992.
  2. L. Hughes and S. Scott. Canada, carbon dioxide, and the greenhouse effect. International Journal of Energy, Environment, Economics, 1(2):111-117, 1991.
  3. Nova Scotia Action Strategy on Global Warming. Summary of public consultations, April/May 15 1992. Technical report, Nova Scotia Department of Natural Resources, March 1993.
  4. Voluntary Planning, Halifax, Nova Scotia. Energy - A New Outlook, July 1991.
  5. Canadian Energy Supply and Demand 1990 - 2010. National Energy Board, June 1991.
  6. Nova Scotia Department of Natural Resources. Nova Scotia End Use Energy Demand (Adjusted), 14 May 1993.
  7. Nova Scotia Power Inc. 1992 Annual Report.
  8. Nova Scotia Department of Natural Resources and Nova Scotia Department of the Environment. Nova Scotia Action Strategy on Global Warming - First Phase. (Draft).
  9. Nova Scotia Power Inc. Preliminary Prospectus Dated 6 July 1992.
  10. Nova Scotia Power (Corporate Communications). NSPC Announces Signing of Private PowerContracts. News release, 30 June 1992.
  11. Statistics Canada. Canadian Forestry Statistics 1989, cat. 25-202 annual edition, March 1989.
  12. Canada - Nova Scotia Cooperation Agreement for Forestry Development (1991-95), 1991.
  13. Nova Scotia Department of Natural Resources. Nova Scotia Forest Production Survey 1992.
  14. Nova Scotia Department of Natural Resources. The Forest Industry of Nova Scotia in 1992. Statistical Review, 1993.
  15. H. Thurston. Nova Scotia: Squandering Tomorrow. In A. Schneider, editor, Deforestation and 'Development' in Canada and the Tropics, pages 162-165. Centre for International Studies, University College of Cape Breton, 1989.
  16. J. McMahon. The New Forest in Nova Scotia. In A. Schneider, editor, Deforestation and 'Development' in Canada and the Tropics, pages 159-162. Centre for International Studies, University College of Cape Breton, 1989.
  17. Standing Committee on Environment and Forestry. Nova Scotia Forests. In First Report - Forest Resources and Industries in Eastern Canada pages 38-67. House of Commons, Canada, June 1986.
  18. Report of the Select Committee on Forestry. Woodchip and Biomass. House of Assembly, Halifax, Nova Scotia, May 1987.
  19. H. Epstein. Forest products market must be diversifed. Between the Issues, 1992.
  20. M.E. Harmon, W.K. Ferrell, and J.F. Franklin. Effects on Carbon Storage of Conversion of Old-Growth Forests to Young Forests. Science, 247:699-702, 9February 1990.
  21. Statistics Canada. Census Divisions and Census Subdivisions - 1981 and 1986, cat. 91-111 edition, 1992.
  22. CBCL Limited. Study of wood fired, hot water district heating in Nova Scotia. Technical Report 88526, Nova Scotia Department of Mines and Energy, 13 November 1988.

Tables

Table 1: Primary Energy Demand (Petajoules)
Fuel1988
(Actual)
1991
(Estimated)
2005
(Projected)
Coal65.266.9147
Hydro-electric12.115.411
Petroleum169.8166.4177
Wood11.811.713

Table 2: Demand by Sector (Petajoules)
Sector1988
(Actual)
1991
(Estimated)
2005
(Projected)
Industrial/Agricultural34.432.246.5
Commercial/Public Admin.27.326.938.9
Transportation69.465.982.6
Residential44.041.951.4
Total175.2166.9219.4

Table 3: Fuel sources for electricity (Petajoules)
Fuel1988
(Actual)
1991
(Estimated)
2005
(Projected)
Coal62.265.3143.7
Hydro-electric12.115.411
Petroleum17.623.922.4
Total electrical production29.232.348.3