Nova Scotia Power Allocates $20M to Refurbish Soon-to-Retire Coal Plant

Nova Scotia Power has announced plans to invest $20.8 million to refurbish the Lingan 2 coal-fired generator, which is set for retirement in 2028. This decision came to light during a public hearing before the Nova Scotia Energy Board, where the utility sought approval to adjust power rates for its customers. The project has sparked concern over the substantial expenditure on a plant that is nearing the end of its operational life.

During the hearing, Roland Deveau, vice-chair of the Nova Scotia Energy Board, expressed his frustration. “It’s disheartening that ratepayers might have to spend $18.4 million on something that’s going to be retired in the next year or two,” he stated. This figure represents a significant portion of the projected costs for Lingan 2, which is one of four units at the Lingan generating station located in New Waterford, Cape Breton. The refurbishment is planned for 2026 and 2027.

Company officials explained that Lingan 2’s retirement was initially scheduled for the early 2020s, but has been postponed due to rising electricity demand and delays in renewable energy projects. Jonathan MacIntosh, director of enterprise asset management at Nova Scotia Power, acknowledged the frustration surrounding the refurbishment. He explained that the company has been hesitant to proceed with the work but now feels it must act to ensure the plant’s reliability.

The refurbishment includes critical components that are at risk of failure, which could have severe implications for the plant’s operation and potentially affect other units. MacIntosh emphasized the necessity of validating the integrity of Lingan 2 through this refurbishment.

The planned costs are incorporated into Nova Scotia Power’s application for new power rates for 2026 and 2027. However, approval of this rate adjustment does not automatically sanction the spending of $20.8 million on the coal plant. A separate application will be required for that specific expenditure.

Vincent Musco, a partner at energy consultancy firm Bates White, raised questions regarding the justification of such a large investment on Lingan 2. He noted that while cyclical repairs for power generation equipment are necessary, the proposed amount exceeds expenditures from recent years, which were under $1.7 million for the years 2023 and 2024. Musco stressed the importance of ensuring that Lingan 2 is genuinely needed before approving the significant costs.

The timeline for the retirement of Lingan 2 is currently tied to the completion of new fast-acting generators, a project led by the Independent Energy System Operator (IESO). Bids for contracts to build and operate one or two natural gas power plants in Pictou County are expected to be opened this year, though the completion timeline remains uncertain.

As Nova Scotia Power navigates these developments, the focus remains on balancing the immediate operational needs of the power grid with the legislative requirements for phasing out coal in favor of greener energy sources. The outcome of the public hearing will play a crucial role in shaping the future of the province’s energy landscape.