New Brunswick can't meet 2030 deadline for coal phaseout, minister says

New Brunswick's energy minister is defending a proposal to keep burning coal in the province past a federal deadline, saying it's the only way the province can meet greenhouse gas targets without having to build an expensive new power plant.

Mike Holland says the federal government's 2030 deadline for phasing out coal doesn't give the government enough time to put in place alternatives such as small nuclear reactors.

"Give me runway so we can put these things together," Holland said. "Give me some time and we'll put these renewables and non-emitters in place."

Even some of those options remain uncertain.

The province officially submitted draft regulations to Ottawa recently as the next step in negotiating a potential deal to continue burning coal at NB Power's Belledune generating station until 2040.

The proposal would see the province use Belledune only during winter months. The province says that would allow the plant to emit the same total, cumulative volume of greenhouse gases through 2040 as it would operating full-time until 2030.

There just isn't enough time to come up with new sources of power by 2030, Holland said.

"The commitment is there to meet that ultimate goal, but the trajectory needs to come in line with initiatives that we've already completed or are in the middle of.

"We're confident we can meet the target but we need that runway. We need runway."

Without a so-called equivalency agreement, NB Power would have to build a new natural gas-fired generating station, a $1.5 billion expense that would have to be passed on to ratepayers.

While natural gas is cleaner than coal, it still emits greenhouse gases, meaning a new plant would be subject to carbon pricing and other climate policies. 

Anticipating new federal generating standards

Environmental researcher Louise Comeau says she expects new federal standards soon on electricity generation that would aim to "drive fossil fuels out of the electricity system" by 2035.

The Belledune dilemma isn't new, but every day that goes by without a solution, or an agreement with Ottawa, is a day closer to the plant's shutdown.

And the timeline is even more pressing in light of new, even more aggressive greenhouse gas emissions goals from the federal government.

They would require New Brunswick to get emissions from electricity generation down to a cumulative 54.2 megatonnes between 2021 to 2040.

Previously, Ottawa's modelling would have allowed a maximum of 63 megatonnes during those two decades.

The old requirement worked out to 3.15 megatonnes per year. In 2019, the most recent year with records available, emissions from electricity generation in New Brunswick were 3.3 megatonnes, down from 3.7 in 2019.

Under the regulations proposed to Ottawa, the province would cap the emissions at an average of 2.9 megatonnes a year from now until 2025, and then at annual averages of 2.8, 2.4 and 2.3 megatonnes in each five-year period after that.

Another option for making up lost generation at Belledune is small modular nuclear reactors.

But NB Power doesn't expect them to be generating as much electricity as Belledune until the mid-2030s, says Brad Coady, the executive director of business development and strategic planning at the utility.

And it's not clear there'll be a viable business case for the reactors.

"History doesn't tell us that that's how it's going to go, necessarily," says Comeau, citing the huge debt NB Power accumulated from the Point Lepreau generating station.

"We need something that's affordable and reliable, and I'm trying to keep an open mind, but I'm not convinced that's going to be the saviour for them." 

In fact, so far NB Power's projections don't rely on any electricity from SMRs.

It is expecting to get more of the output from the Bayside natural gas generation plant in Saint John, which it bought two years ago.

Bayside will reach the end of its natural design life in 2026 unless NB Power spends $144 million to extend it into 2038, according to the utility's most recent integrated resource plan. 

That's also factored into the projections, as is the time the plant would be down for its upgrade.

Another potential substitute is hydroelectric power that New Brunswick will import from Hydro-Quebec under an agreement signed last year.

The utility says in its 2020 integrated resource plan that non-emitting solar and wind power present "an interesting challenge" because it relies on weather, making it "varied and largely unpredictable."

In 2017 the province's three largest wind farms operated at less than one-third capacity during more than half the year, the report says.

Because conventional generating stations can't be easily turned on and off based on whether it's sunny or windy, "this highlights the challenges of balancing intermittent resources such as wind or solar," it says. 

Holland says reducing demand for electricity is another potential piece of the puzzle.

The province has already looked at and discarded two other ideas to convert Belledune.

One would have used a new hydrogen technology, but it was revealed to be flawed. A second would have seen the plant burn byproduct gas from an iron plant that would have been the biggest greenhouse gas emitter in the province.

Canada's latest emissions-reductions goal is 40 to 45 per cent below 2005 levels by 2030.

New Brunswick emitted 12 megatonnes of greenhouse gases in 2019, which was 38 percent below 2005 levels, exceeding reductions called for in the Paris climate agreement.

But the province's official reduction target in its climate change law is to reach 10.7 megatonnes by 2030. That's 47 per cent below 2005 levels, which would surpass the new federal target.