next message in archive
no next message in thread
previous message in archive
Index of Subjects
Before you pay NSP's Green Power premium, read this...
Larry Hughes
Electricity can be generated from a variety of sources. In Nova Scotia,
Nova Scotia Power expects to produce electricity from the following
sources in 2002: coal (60 percent), petroleum coke (15 percent), natural
gas (12 percent), and renewables (that is, hydroelectric and tidal, 8
percent).
The cost of electricity depends upon a variety of factors, including the
cost of building the power station, maintaining it, and, not surprisingly,
the cost of fuel (which, if imported, is affected by the exchange rate).
The cost of production is directly related to the fuel source:
coal-generated electricity is typically cheaper than oil, which in turn,
is usually cheaper than natural gas (hydroelectricity is generally the
cheapest, since it does not require a fuel source). Fuel prices do
fluctuate and utilities try to keep their costs down by using the least
expensive fuel -- Nova Scotia Power switches between Bunker 'C' (oil) and
natural gas at its Tufts Cove power station, using whichever is cheaper.
Despite the variations in fuel prices, most utilities charge individual
classes of consumers (such as residential) a single rate per kilowatt-hour
of electricity consumed. In other words, although electricity from a
hydroelectric station may be cheaper than electricity from an oil-fired
power station, only one rate (generally the higher) is available to
consumers. Although there are fuel price differences, utilities normally
don't allow customers to pick-and-choose how their electricity is
generated. For example, Nova Scotia Power's domestic service rate for
residential customers is 8.35 cents per kilowatt-hour, regardless of the
type of fuel used.
The fact that Nova Scotia Power's customers are charged a single rate and
they have no choice in how the electricity they use is generated raises an
interesting question: Why does Nova Scotia Power's 'Green Power
Initiative' require customers to pay a premium if they choose
wind-generated electricity?
The answer given on Nova Scotia Power's Green Power Web Page is "with
Green Power, Nova Scotia Power and Nova Scotians can feel good about
making a contribution to a cleaner, greener, environment."
It will take more than Nova Scotia Power's "feel good" premium pricing for
green power to contribute to a "cleaner, greener, environment". An
alternative to "feel good" premium pricing is the Renewable Portfolio
Standard (or RPS). RPS programmes are typically legislated by local
governments and require utilities to include renewable energy in their
energy mix. RPS is different from existing green power programmes in that
the utility cannot charge a differential fee for renewable energy. Most
RPS programmes require their utilities to supply a small percentage of
their power as renewables; this percentage increases each year until it
reaches a maximum, which must be maintained by the utility. In the United
States, RPS is being adopted for a number of reasons, including improving
local air quality and encouraging the development of green energy
industries.
The provincial energy strategy document, "Seizing the Opportunity",
proposes a two-phase approach to encouraging the generation of electricity
from renewable energy in Nova Scotia. In the first phase, Nova Scotia
Power's Green Power Initiative will operate for three years, with
environmentally conscious customers paying a premium for wind-generated
electricity from a limited number of independent power producers. After
three years, the second phase will begin with the Green Power Initiative
being reviewed by the provincial government and Nova Scotia Power, then a
Renewable Portfolio Standard will be considered. According to "Seizing
the Opportunity", the increase in the cost of electricity to consumers
would be less than one-half of one percent with the introduction of RPS.
It is unclear why anyone would want to pay a premium on electricity for
three years only to have it reduced when RPS is introduced. A further
unknown is whether RPS will be instituted if there is little public
interest in the Green Power Initiative. (It is probably too soon to gauge
public reaction in to the Green Power Initiative in Nova Scotia, but in
PEI, Maritime Electric has been able to sign up only 210 customers willing
to pay a premium for wind-generated electricity.)
Generating electricity from renewable energy sources will have many
benefits for Nova Scotia, both environmental and economic. The provincial
government should institute a Renewable Portfolio Standard now, requiring
wind to be part of Nova Scotia Power's energy mix without premium pricing.
The province has more to lose than to gain by waiting three years and then
consulting with Nova Scotia Power about a Renewable Portfolio Standard.
Larry Hughes, PhD
Associate Professor
Department of Electrical and Computer Engineering
Dalhousie University
Halifax, Nova Scotia, B3J 2X4, Canada
v: 902.494.3950
f: 902.422.7535
e: larry.hughes@dal.ca
u: http://www.dal.ca/~lhughes2
-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-
SUST-MAR TIP: messages to sust-mar must be plain text format (no HTML)
-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-
next message in archive
no next message in thread
previous message in archive
Index of Subjects