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Will the new Nova Scotia Independent Energy System Operator advance coordinated offshore grid planning?

What’s next for Nova Scotia?

Last week, an interesting report1 was released publicly in Nova Scotia, recommending the government to unbundle the currently vertically integrated local utility Nova Scotia Power Inc. and create a separate independent Nova Scotia Independent Energy System Operator (NSIESO) and a standalone Nova Scotia Energy Board (NSEB) to oversee it.

“The independent energy system operator will take a whole-system approach to coordinating and planning electrical generation to optimally integrate renewable resources on the provincial grid, including onshore wind and solar, the need for auxiliary services to support the grid (when the wind doesn’t blow and/or the sun doesn’t shine), with a view to emerging markets such as hydrogen, and offshore wind, as well as energy usage, demand side management, energy storage and customer costs.”

As noted by the experts at PowerAdvisory2, these ‘significant, complex, and far reaching changes to Nova Scotia’s energy landscape will enable competitive procurements of generation and storage that will create a meaningful opportunity for third-party investment in clean electricity resources in Nova Scotia’.

But where does that leave transmission?

The report acknowledges that “the existing Nova Scotia transmission system is not capable of meeting planning criteria for the 2030 IRP scenario” and that upgrades would be needed to maintain system reliability. The creation of a NSIESO would strengthen system reliability by ensuring that solid holistic planning practices are in place. The IRP3 does not, however, strongly include offshore wind. This is remarkable for a region where the potential offshore wind generation capacity of 17 GW4 vastly outstrips the peak local demand of 2.5 GW5, and which has already stated6 an offshore wind goal of 5 GW by 2030. How can the proposed changes to the Nova Scotia power system governance structure enable the optimal offshore transmission expansions needed to connect the offshore wind resource?

It is important to have a clear plan towards offshore transmission system realization as it is significantly riskier and more expensive than onshore. The lead times for offshore transmission equipment can extend well into the 2030s, and often no clear regulatory regime is in place to assign roles, responsibilities, risks, costs, and benefits.

Coordinated offshore grid planning has been shown to realize major socio-economic benefits and has been applied in varying degrees in different regions of the world. Coordinated planning essentially means fixing some or all the design parameters of a series of succeeding offshore transmission projects to unlock a greater benefit. This requires a degree of centralized governance over the offshore transmission system, and a long-term planning horizon of at least 10 years. The basic transmission planning tenets of ‘how much power’, ‘from where to where’, and ‘by when’ should be determined before lease areas are finalized. This enables a technical solution and masterplan to be determined to minimize costs and maximize benefits for the Nova Scotia rate payer, whilst avoiding the risk of stranded assets and restraining technology development.

What’s next for Nova Scotia?

What are the opportunities for Nova Scotia and how do the proposed changes play into this? There are several key questions to answer.

Accountability

  • Who is responsible for offshore transmission system planning? 
  • To what extend will the NSEB and NSIESO provide direction into what the offshore transmission system will look like? 
  • How will they cooperate with the announced Canada-Nova Scotia Offshore Energy Board (CNSOEB)7 on offshore wind area leasing and the local province and utility regarding offshore wind solicitations? 
  • How will they coordinate with regulators, system operators of neighboring provinces and the U.S., and the regional reliability council Northeast Power Coordinating Council, Inc. (NPCC)?

The potential capacities of lease areas, the offshore wind solicitation sizes, the timing, and the sequence of offshore wind farm deployment must be coordinated to enable an optimal modular offshore grid design.

Models and roadmaps

  • Who will be eligible for offshore transmission infrastructure ownership?
  • Will Nova Scotia follow the current North American paradigm in which the offshore wind farm developer owns all the offshore transmission infrastructure including the onshore substation?
  • Or will they move to a more European approach where the incumbent transmission system owner or a dedicated offshore transmission owner will own offshore transmission infrastructure up to the offshore wind farm inter array cable system?

A model like the one in the UK8 where the ownership is transferred from the offshore wind farm developer to an offshore transmission owner through a competitive tender at the start of commercial operation could be a compromising solution. Transparent and fair models for cost-allocation of inter-provincial or even international offshore infrastructure should be worked out and agreed on as soon as possible. In any of these models, which party could or should be responsible for pre-determining some of the electrical system design aspects to maintain future compatibility and expandability with other offshore transmission infrastructure to enhance system performance? 

Roles and responsibilities

  • Who is responsible for the offshore system operation?

In case of so-called radial connections between offshore wind farms and the onshore grid, the dispatch of such lines is uncomplicated and simply follows the offshore wind generation and any curtailment orders coming from the onshore grid operator. In case offshore connections are made between such radial links and an offshore network is created, it then becomes NERC-jurisdictional and needs to be compliant with all of NERC’s requirements for design and operation. 

  • Will this responsibility be extended to the NSIESO?
  • Or will there be a separate offshore transmission system operator which still needs to be defined?

In the case of Nova Scotia—where a significant amount of offshore wind power may flow to neighboring provinces and the U.S. by means of an offshore power system—it is important to establish which party is responsible for operation of the offshore power grid.

What can Nova Scotia learn from the U.S.?

The U.S. has seen attempts at coordinated grid planning which may hold lessons for Nova Scotia:

  1. The New Jersey Board of Public Utilities and PJM State Agreement Approach 20219:
    This state driven offshore transmission solicitation attracted a lot of attention from developers and multiple bids were received for both onshore and offshore transmission solutions. Ultimately, only onshore grid reinforcements and the creation of an onshore connector point with pre-build duct banks to shore were awarded10. The valuable lesson from this procurement was that even in the absence of an offshore grid coordination strategy, it is still beneficial to coordinate the points of interconnection, required onshore grid reinforcements, and the cable landing points to drive down cost for rate payers and impact on local communities.
  2. The NYSERDA Meshed-Ready11 and New Jersey BPU Offshore Transmission Network Preparation12 requirements
    In their respective offshore wind solicitations, they require offshore wind developers to use HVDC export links to minimize the number of cables going to shore, and to equip the offshore HVDC platforms with the equipment necessary to realize high-voltage AC interlinks between offshore HVDC platforms. The interlinks can be used to improve the availability of the offshore grid, and to exchange power between different onshore POIs. The additional equipment, however, leads to higher costs, additional engineering effort, larger platforms, and the resulting limited number of installation vessels. This could be a viable strategy for Nova Scotia, although, it is recommended to also consider the possibility of creating HVDC interlinks to enable long distance and high-capacity connections at a lower cost compared to AC interlinks.

The adopted regulatory framework for the offshore grid should be conducive to what is called ‘multi-purpose’ 13 or ‘hybrid’ infrastructure in Europe. This refers to offshore transmission systems that can fulfil more than one purpose such as offshore wind export as well as Canada-U.S. trade. This would be particularly interesting for realizing cost-effective transmission solutions for the George’s and Brown’s Bank offshore wind resources which are located close to the U.S. border, as highlighted by consortia such as NEMOEC14

The coordinated offshore grid planning should aim to maximally exploit today’s state-of-the-art transmission technology to achieve the lowest cost, lowest impact on environment and local communities, and highest performance. For near shore solutions such as in the Northumberland Straight, standardized modular AC solutions should be developed, and depending on the distance to the point of interconnection and availability of sufficient cable corridor right-of-way, either use a direct connection to shore with multiple 132 kV collector cables, or modular collector platforms and higher voltage AC cable connections. For large-scale and remote offshore wind farms—such as Sable Bank, Banquereau Bank and Georges Bank (and possibly some of the Gulf of Lawrence areas)—today’s state-of-the-art is 2 GW bipole offshore 525 kV HVDC technology. The use of this technology minimizes the number of cables coming to shore and hence the reduces the impact on the environment and local communities to a minimum. It also minimizes the cost per megawatt and enables the transport of power to markets such as the U.S. north east by submarine cable. 

To enable the use of such systems requires CNSOEB to assign offshore lease areas with a potential generation capacity that matches the 2 GW rating to avoid underutilization of either the lease area or the HVDC link (i.e., areas that accommodate multiples of 2 GW transmission capacity). More crucially, it requires the onshore transmission system to be adapted to handle the potential loss of such a 2 GW system by increasing the ‘most severe single contingency’ (MSSC) level. The MSSC effectively places an upper limit on the maximum allowed capacity of the submarine cables that connect offshore wind farms to shore. Currently, in Nova Scotia, this contingency is in the order of 250 MW, the size of the largest coal power plant and the rating of the each of the two Maritime Link poles. To illustrate the impact of this, it would take sixty 250 MW high voltage AC cables to bring 15 GW of offshore wind power to shore, as opposed to only eight 2 GW bipole, HVDC cable circuits. The permittable MSSC can be increased by procuring more frequency reserves, or by using battery energy storage systems for that purpose, by reinforcing connections to neighboring grids, or by exploiting frequency support from large flexible loads such as data centers or future power-to-X facilities. 

To determine the right offshore transmission system design, governance, and deployment plan, the characteristics of the offshore wind resource, growth and location of different types of offtake, incumbent onshore grid operation and constraints, costs of onshore and offshore upgrades, and cost of grid operation should all be balanced.

Net Zero Atlantic15 recently issued an RfP for an ‘Atlantic Canada Offshore Wind Integration and Transmission Study’ which among other things aims to understand the impact of coordinated offshore transmission planning and aims to provide a roadmap for how to get there. Below shows a first draft approach for how such coordination may be achieved through the collaboration of all the newly-formed and announced organizations.

DNV and our partners, united by global expertise, local experience, and political acumen, transform research into decisive action. We stand alongside governments, the private sector, and stakeholders, guiding them through the intricacies of the energy transition. Our commendation extends to industry players, including governments, for their strides forward. 

Together, we forge the path toward a dynamic energy landscape.

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Figure 1 - DNV's proposed approach for coordination and collaboration of newly-formed and announced organizations.


1    https://cetaskforce.ca/wp-content/uploads/2024/02/FInal-Report-February-23.pdf

2    https://www.poweradvisoryllc.com/reports/nova-scotias-clean-electricity-solutions-task-force

3    https://irp.nspower.ca/documents/annual-evergreen-materials/

4    https://ftp.maps.canada.ca/pub/nrcan_rncan/publications/STPublications_PublicationsST/331/331855/gid_331855.pdf

5    https://www.halifaxexaminer.ca/morning-file/during-the-early-february-cold-snap-the-peak-power-demand-was-nearly-10-higher-than-the-previous-record/

6    https://news.novascotia.ca/en/2022/09/20/province-sets-offshore-wind-target

7    https://www.canada.ca/en/natural-resources-canada/news/2022/04/canada-and-nova-scotia-announce-intent-to-expand-the-mandate-of-offshore-energy-regime-to-support-the-transition-to-a-clean-economy-and-create-sust.html

8    https://www.ofgem.gov.uk/energy-policy-and-regulation/policy-and-regulatory-programmes/offshore-electricity-transmission-ofto

9    https://www.nj.gov/bpu/about/divisions/ferc/saa.html

10    https://www.roi-nj.com/2022/10/26/industry/energy-utilities/bpu-in-historic-move-awards-onshore-transmission-project-to-joint-proposal-from-maod-jcpl/

11    https://portal.nyserda.ny.gov/servlet/servlet.FileDownload?file=00P8z000000gjB1EAI

12    Att-11-OTN-Preparation-Requirements.pdf (njoffshorewind.com)

13    https://www.nationalgrid.com/stories/energy-explained/what-are-multi-purpose-interconnectors

14    https://nemoec.com/

15    https://www.linkedin.com/posts/netzeroatlantic_request-for-proposals-atlantic-canada-offshore-activity-7153098673826988033-f96c

2/28/2024 2:00:00 PM

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Cornelis Plet

Cornelis Plet

Global Practice Lead - HVDC