1. Briefly describe your background as it pertains to the study tidal energy.
I am a professor of finance in the School of Business. Since 2011, I have been researching the cost of tidal energy, the economic impact of developing a tidal energy industry in Nova Scotia, and investment timing. Questions of environmental, social, and economic sustainability are top of mind in my research, as they are for my fellow researchers at the Acadia Tidal Energy Institute.
2. How will the implementation of tidal power in the Bay of Fundy affect the economy, electricity prices and emissions in Nova Scotia?
There will be benefits and costs to tidal power. My colleagues at the Acadia Tidal Energy Institute have either written or will write about the environmental and social aspects in this series. I will focus on the economic aspects.
Unlike coal, oil, and natural gas-fired electricity, with tidal energy, the fuel is free. However, getting that energy out of the tides is expensive. Turbines tough enough to withstand the tidal currents, suspended sediment, semi-submerged ice, and salt water for 20 years must be large, precisely engineered and have sophisticated components. Turbine technology is still very new; some designs have not been built to full scale and some components are still in development. The turbines themselves cost millions of dollars. Beyond the turbines, there is equipment to monitor sea life and sediment, subsea connectors, and power and data cables. Once built, installing the equipment in the fastest waters in the world is a logistical challenge, often requiring specialized sea-going vessels. Once in place and operating, regular maintenance will be done, but at this stage, turbine reliability is still difficult to forecast. Unplanned maintenance can be very expensive – potentially much more than the revenue lost while the turbine is not generating electricity.
The price of a kWh of electricity from the tides will be based on all of these costs, divided by the number of kWh of electricity delivered over the life of the asset. The longer the equipment’s life and the more of that time it operates, the cheaper each kWh will be to generate.
As the global tidal energy industry develops, the cost of electricity from the tides will come down. Engineers will improve the designs and installation, and operations and maintenance procedures will become more efficient. There will also be competition. Also important for bringing costs down will be the economies of scale: it is cheaper per turbine to operate 150 turbines than it is to operate 15. In short, it is conceivable the cost of tidal energy will be competitive with land-based wind energy and distributed solar energy but this will take time.
Meanwhile, places with good tidal energy resources, like Nova Scotia, the UK and France, are deciding if and how they should support this new renewable energy until it is price-competitive. It can be supported through higher electricity prices and/or taxpayer support. Is it worth doing, though?
A recently conducted study, called a value proposition, suggests it is. The value proposition estimates the economic spin-offs of developing a new tidal energy industry in Nova Scotia. If we were to build 150 2-MW turbines and install them in the Minas Passage, and 60-80% of the work was done locally, there would be an estimated 22,000 new full-time equivalent jobs and $1.7 billion of additional gross domestic product (GDP) over the 25-year forecast period. That could make quite a difference to a province of 950,000 people. Also, much of the work would be done in small, rural and coastal communities, such as Digby and Parrsboro. If Nova Scotia endeavored to be a leader in this new global industry, expertise and leading-edge technologies developed by our ocean technology sector could be exported around the world. A conservative estimate of the value of the global industry is $900 billion by 2050. Even a 0.1% share of that market would have a big impact here. To support the early development of 300 MW, the value proposition estimates the provincial/federal government investment would need to be $813 million over the 25-year period. The governments would be able to get money back from the new economic activity through personal and business taxes.
Other benefits of tidal energy development come from displacing fossil fuels in electricity generation. Presently, a lot of Nova Scotia’s electricity is generated by burning coal – imported coal, no less. The cost of coal is expected to rise in the future. Installing the 150 2-MW turbines would avoid emissions of an estimated 129,000 tonnes of SO2, 17,000 tonnes of N2O, and 9.6 million tonnes of CO2 over 25 years.
There would be disruption, to be sure. There would be industrialization in areas that are now rural. Industries like fishing and tourism will be affected. The costs and lost income to others have to be factored in.
3. Should Nova Scotia pursue tidal energy as an energy source?
The province has set a goal to develop 300 MW of tidal energy, taking a staged and measured approach. Continued research will tell us if it is environmentally sustainable and testing turbines in our own waters will be key to learning this. There is a further choice: be an early entrant or wait for costs to come down. At this early stage of the technology’s development, the investment costs would be high and would need to be supported by government (read: taxpayers) if we want to build an industry here and garner the early-to-market advantages of innovation. Alternatively, we can wait and buy mature technologies later from companies abroad, as we have done with wind energy. Buying later would still require government support but it would be much less. As the UK and France move forward, Nova Scotia is considering its options.