Nova Scotia opens competition to remove massive tidal turbine
Developers offered long-term deal at high price in exchange for removal of OpenHydro's orphaned turbine
And it's offering a sweet deal to get the job done.
On Monday, Nova Scotia regulators posted a competition for a new operator at Berth D in the province's original tidal power demonstration site in the Minas Passage.
Berth D is where OpenHydro installed a two-megawatt turbine in July 2018, just days before the company folded.
15-year contract to be won
The winner has to remove the OpenHydro device and in return will get a 15-year contract to supply up to four megawatts of electricity from Berth D to Nova Scotia Power at a premium price.
The maximum rate is 53 cents per kilowatt hour — well above the 15.6 cents residential customers currently pay for electricity.
The province appointed Power Advisory LLC to run the competition for the long-term power purchase agreement.
"The basic thrust is that the province is offering long-term power purchase agreement to the party who agrees to remove the open hydro turbine and to remove and dispose of it," said John Dalton, president of Power Advisory.
"And in return they'll receive a long-term power purchase agreement which will guarantee them a price for the energy that they deliver."
Hope that 'competitive pressures' will secure a lower price
"We're hoping that because this is a competitive process, through competitive pressures we will secure a lower price which will be to the benefit of customers," Dalton told CBC News.
Whatever the winning bid, the guaranteed rate will be at a premium.
"It's likely to be higher than the existing wholesale price of energy. So there will potentially be an impact on rates," said Dalton.
He said the impact on rates is likely to be small.
The price paid by customers is a blend of all sources of electricity, including much cheaper sources like large wind farm electricity which costs 7.5 cents per kilowatt hour to produce.
The power purchase agreement competition posted Monday by the Nova Scotia Utility and Review Board (UARB) does not rule out bidders using the OpenHydro turbine.
But given that it's been stuck on the bottom of the Minas Passage for 18 months, severed from the grid and buffeted by powerful currents, it's not clear whether any company would go that route.
"I think it's probably a remote possibility but it is a possibility," said Dalton. "We're not precluding that and we're kind of leaving it up to proponents to figure out what's the best technical solution."
The UARB has given interested parties until Jan. 15 to comment and told Power Advisory to respond by Jan. 31.
Once the regulator signs off on the proposed power purchase agreement, there will be a 60-day competition.
The winning bidder must be generating power by Dec. 31, 2024.
The proposed power purchase agreement includes a change that gives Nova Scotia Power the right to kill the deal if the developer ceases energy production for six straight months and does not "provide a reasonable plan for restoring operations" within a year.
Under the old power purchase agreement a developer had five years to submit a plan to restore power, with no requirement that it be reasonable.