Regulator OKs Nova Scotia Power's $354M battery project

Nova Scotia Power is gearing up to build battery systems at three sites to help bring energy stability to the grid as the province moves to replace fossil fuels with renewable energy sources.

The utility expects the project to cost about $354 million, with about $116 million covered by a federal grant and the remaining $237 million footed by ratepayers.

NSP has financed some of the cost through the Canada Infrastructure Bank, with investment fromthe Mi'kmaw-ownedWskijnu'k Mtmo'taqnuow Agency.

The Nova Scotia Utility and Review Board approved the expenditure last week.

A spokesperson for the utility said some site preparation has begun, and now, with the regulator'sapproval, construction will ramp up.

All three 50-megawatt four-hour durationlithium ion batteries are supposed to be operational by2026.

Sites have been selected in Bridgewater, Halifax Regional Municipality and Kings County near existing Nova Scotia Power substations. The substationswill be needed to convert electricityto different voltagesand move it on and off adjacent transmission lines.

Grid stability

In its application to the regulator earlier this year, Nova Scotia Power said utility-scale battery storage "is poised to play a key role in Nova Scotia's energy transition."

It said that as more renewable energy is added to the grid, batteries will provide stability by storing energy when the wind is blowing or the sun is shining, and then dispatching that energy at times of peak demand.

In the first quarter of this year, Nova Scotia Power got 43 per cent of its electricity from renewable sources, primarily hydro electricity brought in from Newfoundland and Labrador's Muskrat Falls through the Maritime Link, and wind energy from local turbines.

The remaining 57 per cent of Nova Scotia's electricity comes from fossil fuels, predominantly coal.

Nova Scotia Power is obligated, through provincial legislation, to get off coal and reach 80 per cent renewable energy by 2030. When it missed its last renewable target in 2022, the province levied a $10-million finethat the utility is now appealing.

Nova Scotia Power has been planning for a battery project for several yearsand the province mandated the undertaking in regulations last year.

"Significant investments are required to meet 2030 climate goals," the utility said in its application.

Reporting requirement

The project's largest expense is materials, namely the batteries' primary component lithium. It has been a hot commodity in recent years and subject to major price swings.

Nova Scotia Power noted the challenge this presented to arriving at a cost for the project.

"Utility-scale battery proponents were generally unable to provide pricing certainty beyond a very short time horizon," the utility said in its UARB application.

Such short horizons would not allow for complete project planning and regulatory approval, the application said.

Nova Scotia Power said it was able to secure a price through a limited notice to proceed. Regardless, asmall business advocate who reviewed the plans as part of the regulatory process said he had concerns about the risk of changing costs due to market conditions.

The advocate recommended the board ask for an interim update on costs and funding sources.

The board agreed, and tied to its approval a requirement for Nova Scotia Power to submit a report by the end of September2025. The utility also has to update the board if there is a "significant delay" in getting the batteries up and running.