Nova Scotia

Emera pulls out from troubled Cape Sharp Tidal project

The announcement of Emera's departure from Cape Sharp Tidal Venture comes weeks after its partner company, OpenHydro, filed for liquidation.

Energy company says it was left with 'no practical choice' but to withdraw

A specially designed barge moves the turbine into position in Minas Passage for a demonstration project by Cape Sharp Tidal. The fate of this turbine now rests with liquidators for OpenHydro. (Cape Sharp Tidal)

Nova Scotia energy company Emera Inc. is ending its involvement with the tidal turbine in the Minas Passage weeks after partner OpenHydro Group Ltd. filed for liquidation.

In a statement from Emera released Monday afternoon, the company said it was left with "no practical choice" but to withdraw from Cape Sharp Tidal Venture.

Cape Sharp Tidal was a collaboration between the Irish company OpenHydro — which had an 80 per cent stake — and Emera to generate power using the tides in the Bay of Fundy.

"From the beginning, we understood that OpenHydro's in-stream tidal energy technology was cutting edge and required investment in a non-commercial demonstration project to prove its viability," the release from Emera said.

"Without support from the technology developer, OpenHydro, to operate and maintain the technology and the turbine, we do not believe that there is further value in pursuing this project for our business."

Nova Scotia's energy minister says the turbine cannot stay in the Bay of Fundy indefinitely. (Andrew Vaughan/The Canadian Press)

The first demonstration turbine was deployed in the Minas Passage and connected to the grid in November 2016. It was removed from the water six months later.

The new tidal turbine was deployed on July 24 and connected to the power grid. Fishermen in the area said the company rushed to install the equipment days before announcing its liquidation.

A press release issued on July 26 from OpenHydro's parent company, Naval Energies, said a board meeting the day before was where the company determined it would no longer be investing in tidal energy.

The Irish High Court appointed Grant Thornton as liquidator for both OpenHydro Technologies Ltd. and its parent group, OpenHydro Group Ltd., on July 26.

In its statement Monday, Emera said the company notified both OpenHydro and Grant Thornton earlier in the day that it was withdrawing.

The company is "in the process of examining our rights and obligations under our various commercial agreements with OpenHydro," the statement reads.

Christian Richard, vice-president of special projects with Emera, could not speak to the timeline of the legal proceedings of withdrawing from Cape Sharp Tidal, or what it would mean for Emera's role with the turbine going forward.

"In the interim we will continue to convey to Grant Thornton the importance of safety with the turbine, the importance of environmental compliance and ensuring local suppliers are paid," Richard said.

"All I can say is it is a legal process and I can't get into detail of what that process looks like, it's between ourselves, OpenHydro and Grant Thornton," Richard said.

​​Weekly monitoring

Cape Sharp Tidal isolated the turbine from the power grid last month and it is not currently generating electricity, meaning the environmental monitoring equipment is also not powered.

The turbine is subject to weekly monitoring, but a contingency plan put in place for when that monitoring cannot be done was initiated during the week of Aug. 2.

However, spokesperson Stacey Pineau said the turbine is still turning — and it is up to Grant Thornton to make a plan to ensure environmental compliance.

Last week, Energy Minister Derek Mombourquette said the turbine cannot be allowed to sit at the bottom of the Bay of Fundy for an extended period of time.

The release from Emera said it is the company's understanding that a number of local suppliers have been paid, but Pineau could not elaborate on who exactly those local suppliers were.

Many restaurant and hospitality businesses in Parrsboro, N.S., have claimed to be out thousands of dollars because of the sudden liquidation of OpenHydro.

Richard said Grant Thornton is looking at "the options of what the next steps are," with regards to both the fate of the turbine and local suppliers seeking payment.

Christian Richard, vice president of special projects at Emera Inc., says he could not speak to the legal proceedings of Emera's departure from Cape Sharp Tidal Venture. (CBC)

Richard was on the OpenHydro board for just over a year, but said the company left the board in March.

"Emera made that decision at the time because the investment level within OpenHydro was 2.2 per cent, so a relatively small stake," Richard said. 

"Instead the company decided we should focus our attention on the project itself and Cape Sharp itself, which was a 20 per cent stake in that partnership."

Court documents revealed that minority shareholders and senior managers of OpenHydro voiced concerns about the viability of the company before the liquidation date.

When asked whether those concerns reached him during his time on the board, Richard said simply, "No, that came after."

No short-term tidal energy plans

Emera plans to continue to support other tidal energy projects in the Bay of Fundy through its involvement in the federal ocean supercluster initiative, the company said in a statement.

But Richard said they are not contemplating any direct investments in the short term.

"We'll continue to evaluate the industry as it proceeds and as it develops, and if an opportunity presents itself in the future we'll certainly evaluate it."

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