The Nova Scotia government will end the five-year-old community feed-in tariff (COMFIT) program, a decision that came after a program review that began in January.
The COMFIT program, which came into existence in 2010 as a part of Nova Scotia's Renewable Electricity Plan, was designed to encourage community-based, local renewable energy projects by guaranteeing a rate per kilowatt-hour for the energy the project feeds into the province's distribution electrical grid. In essence, the incentive helped mostly small-scale energy producers with projects less than 2 MW that typically couldn't compete against larger developers.
According to Bruce Cameron, Nova Scotia's executive director of sustainable and renewable energy, COMFIT exceeded expectations in energy output. He says there are more than 80 MW in production, and more than 125 MW expected by the end of the year - most of that coming from wind.
An economic kickstarter, the program more than exceeded expectations, the government says. It is estimated that COMFIT generated C$35 million in direct investment in communities throughout Nova Scotia.
However after reviewing the program in January, officials determined the project worked perhaps too well.
As part of the 2010 electricity plan, Cameron notes the province wanted to test the effectiveness of three models: COMFIT, competitive bids and cost of service projects owned by a utility.
"And the COMFIT was the most expensive," he says. For example, wind projects under the COMFIT receive C$0.131/kWh. More recent wind projects, however, came in much cheaper. He says a recent power purchase agreement signed for the 102 MW South Canoe Wind Farm fetched about C$0.07/kWh.
Therefore, the province decided to end the incentive. Further, adding wind capacity, notes the province, would negatively impact rates, as Nova Scotians pay more for energy with small-scale, community-based projects than from other sources.
"This is the right time to bring COMFIT to a close; it has achieved its objectives," says Michel Samson, energy minister. "We are now at a point where the program could begin to have a negative impact on power rates."
Effective immediately, no new COMFIT applications will be considered, notes the province. Projects already under way will continue. All unapproved projects, extensions and lapsed-permit renewals will be considered on a case-by-case basis and processed within 60 days.
Nova Scotia will introduce legislation in the fall to enact the necessary changes. More details on renewable energy will be released with the province’s forthcoming electricity plan this fall.
Looking back on COMFIT, Cameron says, "We learned a lot, and it was a great program, specifically from an economic development perspective. However, we're moving on from COMFIT."