John Woods of Minas Energy
The 200 people who attended the tidal symposium in Parrsboro yesterday heard that tidal power will be very expensive, at least in the near future. The electricity that the tidal companies are planning to generate at the FORCE site will cost nearly four times more per kilowatt hour (kWh) than the rate that Nova Scotia homeowners are paying now.
Melissa Oldreive, a policy analyst with the provincial department of energy, said Nova Scotia Power will be required to pay the tidal companies 53 cents per kWh. At present, the home electricity rate for NSP customers is just under 15 cents per kWh.
John Woods of Minas Energy, one of the companies planning to install turbines at Black Rock, told the symposium that the 53 cent rate assumes that the turbines will operate at peak capacity only 35 per cent of the time.
He added the tidal industry is so new, no one knows for sure what the real peak capacity figure will turn out to be. Generating peak capacity depends on the speed of the currents which varies considerably from hour to hour and day to day.
Woods showed a chart illustrating how crucial the peak capacity number is in calculating the cost of tidal electricity.
For example, he said that a 2MW turbine operating at 30 per cent capacity would generate revenues of nearly $2.8 million per year. But the same turbine operating at 80 per cent capacity would bring in almost $7.5 million. Ten such turbines would cost NSP customers $75 million a year and Woods said that’s the last thing tidal developers want.
“We don’t want these things running at 80 per cent,” he said, “unless the rate can go way, way down.”
Province promises to control costs
In 2012, the province released its Marine Renewable Energy Strategy, which promises to cap the impact of tidal power on electricity rates at a maximum increase of two per cent.
That means that unless the rate per kilowatt hour falls sharply, the tidal industry would be limited in the number of turbines it could deploy.
Tidal developers are predicting that once they get their turbines up and running, they’ll find ways to generate cheaper electricity.
But, as John Woods of Minas Energy pointed out, the high costs of operating in the Minas Passage and the uncertainties over how much electricity the turbines will actually generate are two problems the industry will have to face.
Industry has moral obligation
Woods said that because provincial ratepayers will be footing the bill for the development of tidal energy, the industry has a “moral obligation to work inside Nova Scotia.” He also mentioned the need to bring economic benefits to Parrsboro after showing a photo of the town’s dry harbour at low tide.
“We have to figure it out,” he said. “We can’t say that Parrsboro has no water 12 hours a day. It’s not good enough. If we’re going to get the 53 cents (per kWh) to something much, much lower, we have to set up here.”
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John Woods’ formula for calculating the annual cost of tidal power for a 2MW turbine at the guaranteed rate of 53 cents per kWh or $530 per MWh.
24 hrs/day X 365 days = 8760 hours
Calculation for turbine operating at (1) 30%, (2) 35%, (3) 50% (4) 80% capacity:
(1) 8760 hrs X 2MW X .30 X $530 = $2,785,680
(2) 8760 hrs X 2MW X .35 X $530 = $3,249,960
(3) 8760 hrs X 2MW X .50 X $530 = $4,642,800
(4) 8760 hrs X 2MW X .80 X $530 = $7,428,480
