Social Implications of Nova Scotia Renewable Energy Scenarios more

Social Implications of Nova Scotia Renewable Energy Scenarios Brendan Haley Carleton University – School of Public Policy and Administration This paper identifies social issues and implications of the renewable energy scenarios constructed by stakeholders in Nova Scotia and outlines policy best practices, options to mitigate potential costs, and opportunities to explore. The first section highlights social issues that could arise in each scenario. The second section discusses policy options that are consistent with “both/and” rather than “either/or” thinking.1 The third section suggests opportunities for further exploration. This paper considers three broad issues: 1) social acceptance in local communities 2) energy cost issues 3) risk and technology choice. 1 Scenarios Below is an identification of social issues that could arise within each of the four scenarios previously constructed by participants. 1.1 Scenario 1 – “Blowing in the Wind” This scenario considers meeting a majority of the target with wind and some imports. Polling in Nova Scotia found 99% support for wind technology.2 Although this does not mean wind projects will be accepted by local communities or that it will be easy to develop individual wind projects. Social resistance has stalled or cancelled wind projects within Nova Scotia, as in other jurisdictions.3 While wind energy might be supported as a means to prevent global warming on a macro level, this is often not a paramount concern in the context of individual renewable projects. An individual can be consistent in their general support of wind energy, but opposition to it in a particular circumstance because other issues emerge. Researchers have found that landscape, more particularly the type of landscape, to be an important factor in cases of public opposition.4 Opponents may argue that a particular project will negatively impact the cultural historical landscape and that their concerns are not being heard within planning processes. Local opponents are often derogatorily referred to as supporting a “Not-In-My-Back-Yard” (NIMBY) position which suggests a degree of selfishness, conservatism, unwillingness to cooperate or ignorance of environmental issues. Evidence suggests that wind-power attitudes follow a U-shaped pattern over time from initial support before the project; to increased opposition when a project is proposed; and support after development, 1 2 (Wheeler 2009) (Chapman 2009) 3 The US Department of Energy has estimated that 10-25% of proposed wind projects are not built due to environmental concerns and local opposition. (US Department of Energy 2008) 4 (Wolsink 2007, 1188-1207; Wolsink 2007, 2692-2704; Johansson and Laike 2007, 435-451) 1 suggesting that individuals change their opinions when confronted with an actual application.5 A phenomenon of “getting used to” new developments appears to have some historic precedent. Maria Stefanovich has noted that protests existed against the Statute of Liberty and that Parisians signed petitions against the “black blot” of the Eiffel Tower.6 There is also potential for a PIMBY phenomenon to occur (Please-In-My-Back-Yard), which has been identified to exist when turbines can become a source of income.7 The chief beneficiaries of wind project revenue in Nova Scotia could be farmers, rural and coastal communities with access to land and wind resources. Concern about potential health effects of living in close proximity to wind turbines has also been expressed. Clear evidence of direct health links has not been substantiated, but some individuals claim to experience stress-related and other health difficulties. Scientific findings are often contested and unable to resolve political debates and social fears about the unknown consequences of technological development. The use of greater wind resources and energy imports in future years may require increased transmission line development, which also has potential to result in social conflict over land-use. This scenario also considers the use of importing renewable power to assist in meeting the province’s renewable electricity goals and/or to balance increased wind generation. Imports will move many of the social costs and benefits elsewhere. Revenues from renewable energy could be flowing to other jurisdictions at the expense of communities and entrepreneurs in Nova Scotia. Nova Scotia might also avoid some domestic social conflicts over planning and siting of energy development. But the decision to import can implicate Nova Scotia citizens in more serious social conflicts elsewhere. The Lower Churchill Falls project will flood traditional hunting and trapping lands of the Aboriginal Innu.8 Some power can be exercised by jurisdictions as energy consumers9, but as a minority purchaser of electricity from larger projects Nova Scotia will have little influence over social and political issues such as the extent of community ownership and the ecological sustainability of other jurisdiction’s energy plans. 1.2 Scenario 2 – “Big Wind and Big Biomass” Social concerns over the distribution of economic benefits and fairness of planning processes are common to both wind and biomass. Achieving social acceptance for biomass projects could be more difficult since studies have found that the public “do not easily accept technical and economic rationales 5 6 (Wolsink 2007, 1188-1207; Wolsink 2007, 2692-2704; Wolsink 1994, 851-866) (Stefanovich 2009) quoted in (Renewable Energy World Podcast 2009) 7 (Van der Loo, Frans A. 2001) 8 No compensation was provided to the Innu for the Upper Churchill Falls project. The Innu nation has protested the Lower Churchill project. More recently the provincial government, Newfoundland and Labrador Hydro, and the Innu Nation are negotiating a deal that could give the Innu Nation minority ownership of the project. (Innu Nation). Large energy projects have been both opposed and welcomed by aboriginal communities in Canada (see Abele 2005, 223-245) 9 Perhaps most famous is the Cree Nation’s campaign against Quebec’s Great Whale Project which involved a canoe trip from James Bay to New York. This led to consumer pressure from the city and state of New York on Quebec. For any consumer pressure to be placed on Quebec a large consumer needed to make a “credible threat” of cancelling the purchase contract. 2 of biomass” and that social acceptance can be critical to achieving planning permission.10 Biomass development introduces new concerns with respect to the ecological, economic, cultural and aesthetic impacts of forest land-use.11 The site, location and type of power plants increase in importance due to local air pollution concerns.12 Those with the capacity to produce biomass will benefit from revenues. This, most prominently, includes the province’s pulp and paper sector, in which two plants consume roughly 20% of energy in the province. Allowing these plants to offset their electric bills with increased income from biomass production would contribute to the economic stability of existing pulp and paper plants and the communities in which they are embedded. Biomass has also featured prominently in sustainable energy community economic development visions.13 A common social concern in all scenarios is the impact of increased electricity rates. Increased rates can create economic insecurity and have a disproportionate social impact on the poor. Participants on September 10th anticipated that this scenario might be the “least cost plan” and the latest update from the Integrated Resource Plan appears to support this.14 This renewable energy scenario is likely the one most consistent with (or locked into) the province’s current energy structure. Existing social relations with energy are largely maintained. Consumers are passive. Authorities attempt to keep prices low. More active relationships with the utility are left to the largest energy consumers. On top of existing demand response programs that reduce industrial electric bills, large energy consumers are provided with new mechanisms to offset energy costs by increasing their on-site production of electricity (and potentially heat). 1.3 Scenario 3 – “Displacement Plus Technology Push” The spirit of this scenario is to push new technologies such as ocean energy, solar, biogas and redesign for energy efficiency onto the market. The prospect of introducing relatively new technologies could increase concerns about unknown risks. Fear can lead to an over-emphasis of risk, while over-exuberance could lead to an under-emphasis of risk. Concerns have been expressed about the impacts of tidal energy and the use of some biogas feedstocks. Energy efficiency design concepts can be hindered due consumer and the building industry’s unfamiliarity with them. 10 11 (Upreti 2004, 785-800) These concerns are shown to be present in Nova Scotia by (Chapman 2009) 12 Land-use and air quality issues have created environmental justice conflicts in other jurisdictions. Activities with detrimental local effects can be concentrated in low-income and/or ethnic minority neighbourhoods (Hofrichter c1993.)(Bullard 1993). If biomass development is concentrated in existing pulp and paper plants in Nova Scotia this could be less of a concern. 13 (The South West Shore Energy Office 2005). The use of biomass in the pulp and paper sector and for home-heating has featured prominently in Canadian carbon reduction scenarios. For the pulp and paper sector the National Roundtable on the Environment and Economy’s Advice on a Long-Term Strategy on Energy and Climate Change (2006) suggests continued efficiency improvements, co-generation and 80% of the industry’s energy needs coming from wood-waste by 2030. Residential use of wood heating is also assumed to double by 2050. 14 (Nova Scotia Power 2009) 3 Over-exuberance could also lead to attempts to run before you can walk. The history of renewable technological development is one of trial-and-error learning. Big-leap attempts with large wind turbines failed, while the gradual up-scaling of small turbines combined with frequent interaction with turbine owners worked.15 This scenario will be less successful if there is an over-focus on technical considerations and inattention to how new technologies will be integrated into society. Social cohesion and institutions that can adapt to potential disruption and welcome back-and-forth of learning processes are essential. Municipal governments, local communities and households will need to be patient, open, responsive and willing to actively engage with entrepreneurs to improve their products. It is possible for a technological utopia to catch the imagination of the public via a “man on the moon” phenomenon. However opinion of new technology can also follow a “hype cycle” of initial high expectations, followed by disappointment, before a more realistic path of continued progress.16 Future benefits must be probable and equitably distributed to compensate for the efforts inherent in learning processes. Impressive development can occur if social and technical systems work in a self-reinforcing manner. This potential can be seen in solar technologies. NSPI’s polling has also found a particular interest in solar for personal use.17 A social evaluation of solar suggests that a real “take-off” could occur not only because it will one day hit “grid parity” through technical improvements18, but because it is a technology with universal applicability and opportunity for broad participation in its production. 1.4 Scenario 4 – “Diversified Portfolio / Smart Grid” The spirit of this scenario is to develop a wide diversity of renewable technologies. Many of the comments made in previous sections apply. I mentioned scenario 2 being most consistent with an established energy model that views the majority of citizens as passive participants. This scenario, in contrast, could introduce a more active relationship between citizens and their energy production and usage. Previous scenarios discussed what sectors would most likely benefit by becoming renewable energy producers. Farmers and rural communities can benefit from wind and non-forest biomass, and the pulp and paper and forestry sectors can benefit from biomass. This scenario adds the potential for urban households to participate through the production of solar and micro-CHP, for industries to participate through larger CHP projects, and for coastal communities and entrepreneurs to benefit from ocean energies. A wider portfolio of technologies broadens the scope of participation. Encouraging technological diversity can also promote equity.19 15 16 (Kamp 2008) (Borup et al. 2006, 285-298) 17 (Chapman 2009) 18 Potentially user-inspired technical improvements 19 These comments do not relate to the import of energy. As mentioned in section 1.1, imports will see any benefits flowing outside of the province. I suggest that using imports as a hedge in case other technologies fail to perform or to load-follow renewable technologies is VERY different from explicitly importing to meet a renewable energy target. 4 The concept of the “smart grid” introduces not only a citizen-as-producer concept, but also citizens as more active managers of their energy use. Home energy management systems20 coupled with real-time information and differential rates can empower consumers to reduce their bills. Demand response programs exist in Nova Scotia for large industries. The smart grid introduces the potential to improve these existing programs and to universalizing them by bringing them to the residential and small business levels. There is also potential for citizens to earn revenue by selling stored energy from electric cars back into the grid. An unknown with respect to the smart grid is if citizens will make the “cultural shift” from passive consumers of energy towards more active producers and managers. Grid Optimization is one smart grid technology that does not require consumer behavior change. Giving grid operators digital control over power delivery networks through sensor technology and improved communications can advance system reliability, power quality, and reduce the need for new power lines. This could produce very real social benefits given the public frustration with power outages21, and potential conflict over the construction of new transmission lines. 2 Policy Options and Best Practices Dr. Wheeler stated that this consultation process will seek solutions based on “both and” rather than “either or” thinking. This section will outline where some of these solutions can exist in the areas of social acceptance, social technology choice, and energy costs. 2.1 Social Acceptance Unfortunately this issue is often described as the “NIMBY” problem – a framing that is not particularly helpful. NIMBY is a very particular phenomenon whereby individuals generally support the development of projects, but not in their locality.22 Labeling social acceptance problems as NIMBY leaves little room for solutions other than authoritarian imposition of projects onto communities.23 It removes policy-makers and developers from responsibility and obscures the discovery of potential solutions. Solutions are also unlikely to be found if social acceptance is framed as a “communications” problem in need of more “education”. Researchers have not found increased knowledge to be related to greater acceptance24. Information can be contested and opposing sides often use the same information to 20 Home Energy Management is currently attracting large amounts of venture capital. Google and Microsoft intend to develop Home Energy Management Systems and give them away for free. See (Leeds 2009) 21 This problem is likely to augment given aging grid infrastructure and increased storm intensity due to climate change. 22 See (Wolsink 1994, 851-866) for a discussion of the assumptions implicit in the NIMBY theory 23 NIMBY exemplifies what political scientists call a “collective action problem”. Everyone’s individual interest is to oppose developments in their backyard even though they support development in general. Even though the social or collective choice is to development renewable energy, individuals acting in their self-interest will ensure development fails to occur at the socially desirable level. Society is worse-off due to the inability to implement the collective or social choice. 24 (Wolsink 2007, 1188-1207). Upreti (2004, 785-800) did suggest that a lack of awareness of the benefits of biomass energy existed, but it is unclear if increased awareness would lead to increased support. 5 argue different positions. The implication that local communities are ignorant serves to provoke debate rather than resolve conflicts.25 Social science research has found the concepts of procedural justice or a fair process and distributive justice are of use when considering social opposition to projects. Opposition increases when people feel that projects are a fait accompli or that they have been left out of decision making. Concerns over distributive justice occur if people feel that a small group receives the benefits of the project in the form of revenue, while everyone else loses. Two primary solutions are found throughout the literature: increasing local ownership26 and early engagement in fair decision making processes27. Local ownership spreads the benefits of projects more widely, potentially creating a PIMBY28 phenomenon and/or creating a network of supporters for a particular project in local communities. A Dutch farmer once explained to wind energy expert Paul Gipe that locally owned turbines are more acceptable because “your own pigs don’t smell”.29 Leading renewable energy developers such as Germany and Denmark have high rates of local ownership and the Netherlands has experienced increased wind development with local ownership.30 Local ownership is a complement, not a substitute for fair processes. Authors have emphasized the importance of creating a network of support for renewable projects within communities through early engagement.31 A fair process requires that institutionalizing collaboration within planning. The community must have a degree of agency to choose appropriate sites and make other complementary arrangements. In some cases different sites have been chosen, weather balloons have been flown to allow locals to assess impact on landscape and wind parks were integrated into local tourism and development strategies.32 Gross finds the following principles of procedural justice to be important.33 1) Appropriate participation 2) Ability of voice to be heard 3) Adequate information 4) Being treated with respect 5) Unbiased decision-making 6) “decisions that are responsive to information and that are correctable in the face of new information” France has developed a model whereby local actors propose appropriate sites to developers, which then select from the offers. Germany has enabled local communities to define appropriate zones for 25 26 (Barry, Ellis, and Robinson 2008, 67-98) (A representative list includes Jobert, Laborgne, and Mimler 2007, 2751-2760; Strachan, Lal, and von Malmborg 2006, 1-18; Maruyama, Nishikido, and Iida 2007, 2761-2769; Breukers and Wolsink 2007, 2737-2750; Warren and McFadyen; Devine-Wright 2005, 57-69; Toke 2005, 1527-1539; Söderholm, Ek, and Pettersson 2007, 365-400; Toke, Breukers, and Wolsink 2008, 1129-1147) 27 (Dimitropoulos and Kontoleon 2009, 1842-1854; Gross 2007, 2727-2736; Jones and Eiser) 28 Please In My Back Yard. 29 See (Gipe c1995. 374) 30 (Breukers and Wolsink 2007, 2737-2750) 31 (Wolsink 2007, 2692-2704; Toke 2005, 1527-1539) 32 (Jobert, Laborgne, and Mimler 2007, 2751-2760) 33 (Gross 2007, 2727-2736) 6 renewable energy developments, but made it illegal to refuse development in totality.34 Both of these systems give communities a degree of agency. The German system mixes this local agency with federal power, which thwarts NIMBY-type collective action problems. Nova Scotia might consider making resources available to producers and communities to facilitate a fair and early35 integration of local communities into development processes and mechanisms to enhance local ownership. Any restrictions on local agency like Germany and Ontario might be warranted if real collective action problems are occurring36, but establishing these rules should be approached with utmost caution to avoid creating power imbalances that allow developers to abdicate their responsibility to negotiate in good faith with local communities.37 2.2 Technology Choice Public concern over potential social and health implications of renewable energy technologies also exist. Concerns exist over biomass feedstock and air pollution, ecosystem and marine life impacts of ocean energy, “wind turbine syndrome”, and transmission lines in particular. These are high-level concerns that relate to the risks inherent in certain social technology choices. Concerns over technology choice are not NIMBY positions, but potentially not in anyone’s backyard positions or calls for individual accommodation. One cannot deny that technologies can pose new and unanticipated risks. But precaution with respect to new technology must not entail the “blanket rejection of all new technologies” and the de facto acceptance of existing technologies and their risks.38 Concern over the implications of one technology, must be discussed in relation to what alternatives exist. When making technological choices those expressing concern about renewable energy technologies have a duty to recognize risks inherent in alternative choices. Proponents of particular energy sources can accept public concern as an opportunity to self-reflect, learn and innovate. Policy can encourage social cohesion by sponsoring arenas that foster discussions with these ground rules. This is especially the case for emerging technologies, technologies that are expected to significantly scale-up in volume, and technologies that will significantly affect energy structures over the long-term. Scenario planning exercises over choices such as carbon capture and storage vs. decentralized energy and Strategic Environment Assessments39 can be good examples of appropriate social technology choice forums. Scholars have emphasized the need for “reflexive” institutions in the face of uncertain technological risks.40 Societies can enhance their capacity for self-reflection and ability to change course in the face of new knowledge and unintended consequences of both new and existing technologies. We are currently 34 35 Ontario’s Green Energy Act allows renewable projects to override by-laws and other restrictions. Ideally before final siting decisions are made 36 But even in these cases, authoritarian imposition of rules might not solve the problem. See Ostrom (1990.) for general discussion. 37 (Jobert, Laborgne, and Mimler 2007, 2751-2760) note that the German rules might have created cases whereby developers become over-confident in their ability to impose projects on communities. 38 (Stirling 2007, 286-295) 39 Nova Scotia recently conducted a Strategic Environmental Assessment (SEA) for ocean energy. 40 (Beck 1992.) 7 “locked” into the risks inherent in current technologies due to the inflexible nature of large capital projects with long lead times.41 One benefit of many renewable projects is their small unit size which allow for trial and error learning and comparisons of several versions of a technology. The acceleration of widespread experimentation with a diversity of technologies can enhance our understanding of present-day and future risks and increase the ability to respond to new information by altering technology choices. The key is ensuring social objectives such as health and community impact are considered in addition to economic efficiencies and that institutions respond in the face of new risks and new knowledge. A full appraisal of different technological choices is warranted in the face of risk and uncertainty. Evaluation methods such as Integrated Resource Planning are poorly placed to evaluate emerging technologies that will change the structure of energy systems with widespread social, economic and environmental implications.42 Since all low-carbon and renewable energy scenarios will require learning and risk it is very difficult to assess ex ante what will be the most cost-effective solution or what new problems will arise. Nova Scotia will, to some extent, contribute to the actual realization and success of certain futures43 by lending momentum to learning and development processes. Anticipation, judgment and discussion of desirable visions of the future are required, followed by frequent monitoring and selfcorrection. 2.2 Energy Costs Concern over energy poverty and the social insecurity wrought by higher energy costs is common to all scenarios. This very likely includes a “no renewables” scenario due to fossil fuel market volatility, carbon prices, “peak oil” and other energy scarcities.44 The habitual energy paradigm seeks to protect passive consumers from the monopoly power of large energy producers. This, in conjunction with mass energy consumption, has manifested a belief in the right to low energy prices.45 Scenario 2 appears to stay closest to this paradigm by supporting relatively centralized technologies with low unit costs that fit within the current electric system structure. But this paradigm is increasing coming under stress, with numerous electric rate increases occurring in Nova Scotia in the past number of years. Energy poverty and energy cost insecurity46 are not determined by price alone. Energy burdens are expressed as a percentage of income spent on energy.47 It is possible to reduce energy burdens via 41 42 (Collingride 1996., 40-45) See (Lehtonen and Kern 2009, 103-122). IRP will tend to support existing energy structures and cannot evaluate if structural changes to energy systems are desirable. 43 Examples include centralized carbon capture and storage vs. decentralized energy, large-hydro imports vs. smart grid. 44 I wish to acknowledge the lack of agreement that might exist around this statement. The future market price of fossil fuels is not certain. If and when “peak oil” and other energy and resource scarcities are expected to have a significant price impact is contested (see Simpson, Toman, and Ayres 2005). Some have suggested that a higherprice world is inevitable (see Rubin 2009). In addition, whether or not and to what degree carbon pricing is implemented is a social choice. I would suggest that meaningful carbon prices are unlikely to be implemented by governments in North America unless it is coupled with a new social contract with respect to energy cost security. 45 (Nye c1998. chap 8) 46 I’m using this term to express the social insecurity that can result within households due to energy costs. This insecurity can be felt within households and businesses that are not technically in energy poverty and potentially produce the “ratepayer revolt” that participants have discussed. 8 three methods. 1) By reducing price or providing rate assistance 2) reducing and/or managing energy use and 3) increasing income. A comparison with Germany can be instructive. German electricity prices are about 33 Canadian cents per kilo-watt hour (kwh).48 The FIT policy to promote renewable energy generation costs about 1.2 cents, while a series of taxes and generation and transmission costs make up the rest.49 A “representative household” in Germany is estimated to consume 3,500 kwh annually. Such a household would have paid a final electric bill of C$95/month in 2007.50 In 2007, the average consumption for an Atlantic Canadian household was 13,714 kwh annually and the average for a Canadian household was 11,179 kwh.51 Based on 2007 electric rates52, Nova Scotians paid monthly bills of $123/month based on average electric consumption in Atlantic Canada or $100/month based on the Canadian average. Even though German electricity prices are much higher than in Nova Scotia, the actual cost of electricity in Germany is similar, or even lower, than in Nova Scotia because of enhanced end-use energy efficiency and widespread use of solar hot water and district heating. We could also consider that renewable energy generation contributes to reduced energy burdens in Germany as citizens receive revenues from ownership in projects. Nearly half of all German wind turbines are locally owned.53 In addition, the renewable energy industry has provided employment for 278,000 people.54 A relatively stronger social safety net that reduces poverty and inequality also means that energy poverty is less of a concern in Germany as compared to Eastern Europe, UK, US, and Canada.55 47 6% percent of income being spent on energy has been argued to be an unsustainable energy burden. This is based on an estimation that no more than 30% of income should be spent on shelter costs and that no more than 20% of this housing budget should be spent on energy. The UK government’s energy poverty plan defines 10% of income as an unacceptable energy burden. 48 All conversions based on 1 euro = 1.57472 Canadian dollars 49 (wechseln-stromanbieter.de). For a full breakdown. Electric tax (3.2 cents). Sales tax (5.3 cents). Cogeneration charge 0.5 cents. FIT policy (1.2 cents). Power generation (7.9 cents). Grid (10.4 cents). Measurement costs (1.4 cents). Usage fees (3.1 cents). 50 (Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) 2009 26) 51 2007 Survey of Household Energy Use – Table 11.4 Electricity Intensity 52 Based on domestic rate after April 1, 2007 of $10.83/month customer charge and 10.67 cents per kwh. Note that electric rates have subsequently increased in Nova Scotia. 53 (Farrell 2009 4) 54 (Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) 2009 36), 55 th th Germany ranks as the 15 most unequal in OECD, Canada as the 18 most unequal measured by the Gini coefficient. Poverty rates in Germany are below the OECD average, while poverty rates in Canada are above the OECD average. 4.4% of the German population is reported to have inadequate heating, which is below the EU average of 9.5% and the OECD average of 9%. 2.7% of the German population report arrears in paying utilities which is below the EU average of 7.3% and the OECD average of 7.9%. Heat and arrearage data were not available for Canada. (OECD 2008). Green Communities Canada (2006) estimated that in 2003 about 2.3 million Canadians (7.3% of population) lived in energy poverty, based on a 10% of income energy burden threshold. 9 2.2.1 Active Energy Usage and Production Scenario 4 most prominently enhances these non-price methods of reducing energy burdens. Smart Grid energy management systems give the consumers the ability to reduce their energy bills by using energy more efficiently at both the household level and in coordination with the grid operator. Scenario 4, especially if coupled with community ownership, also extends the ability for many actors to receive revenues from energy generation projects. Since many have mentioned that energy prices could rise in all scenarios and in any “no renewables” scenario, it might be desirable to take advantage of new opportunities available through renewable energy and smart grids to maintain acceptable energy burdens. 2.2.2 Energy Poverty and Low-Income If it is the case, as has been suggested during meetings, that a “no renewables” and any renewable energy scenarios will lead to higher energy prices, renewable energy and smart grid technologies might be integral to providing household energy security in the future. If this is the case, we need to consider if the benefit these new technologies provide will be readily accessible and equally distributed to Nova Scotians to avoid the social exclusion of certain populations. While energy cost security can be enhanced for middle-class citizens and businesses56, the ability for low-income individuals to grasp these opportunities is in doubt. Community ownership policies such as feed-in tariffs can make financing more accessible to citizen-producers by reducing costs and uncertainty in the capital market, but low-income people will not be taking out new loans for this purpose. Also, the extent to which smart grid options will be accessible to low-income households depends upon if they will be provided at no-cost to participants. Similar barriers exist for low-income energy efficiency, requiring specific programming.57 Low-income individuals could be excluded from the enhanced energy cost security that others will experience in a renewable energy future. In addition, the lack of a clear social safety net with respect to energy costs could cause fear and nervousness about energy transitions throughout the population. When fear and insecurity exist it is often easier for the public, and much easier for politicians, to maintain a business as usual pathway, even if it is ultimately detrimental. The burden of proof with 56 Large industries will have many opportunities to reduce their energy burden due to their access to land, roofspace and capital for generation projects, and “energy management” staff capacity that will take advantage of smart grid opportunities. A study also found that industrial sites and harbour areas are the most “socially acceptable” landscape for renewable energy developments (Wolsink 2007 2697) 57 It might be possible for low-income individuals to benefit if social housing projects can engage in on-site generation, enhanced energy efficiency and smart grid energy management. Low-income energy efficiency programs in existing housing can be powerful, but are not a silver bullet. Meg Power (2006) simulated that a 40% efficiency improvement amongst low-income households in the US could bring half the people living in energy poverty out of it. Extra measures are needed for the other half. A 40% improvement was the potential efficiency savings found during the short-lived EnerGuide for Low-Income Houses Program. But, this potential was not achieved due to spending limits per household. Even greater savings could be achieved if measures such as fuel switching and district heating are utilized. In addition, we must consider that price increases will affect everyone immediately, while it will not be possible to retrofit every low-income household all at once. Information collected on energy burden can be used to target those houses most in need of efficiency improvements. 10 respect to how energy cost security will be provided in a renewable energy future falls upon those advocating such a future. Since all individuals could fall into energy poverty a long-term, universal, and consistent social safety net could be considered as part of a new social contract for energy cost security. Low-income energy assistance programs in Nova Scotia that have provided income-tested rebates have been politically insecure58, emergency in nature, and not targeted towards a clear objective. An energy poverty program that directly targets energy burden has the advantage of ensuring universal social security; being efficiently targeted towards a clear and measureable objective; and working in conjunction with self-generation, smart grid and energy efficiency efforts that can be accessed by lowincome individuals as well as broader poverty programs such as job creation and increase in social assistance rates. A Universal Service Program that would embed a social safety net within electric energy bills has been developed for Nova Scotia59, but the UARB’s enabling legislation prevents it from being considered. 2.2.3 Three New Rights for Energy Cost Security? Any energy future likely to see higher energy prices highlights the potential for increased energy poverty and energy cost insecurity. Renewable energy and smart grid technologies introduce new ways to maintain acceptable energy burdens. Given this situation, Nova Scotia might wish to provide energy cost security in the future by complementing the social right to non-monopoly pricing that currently informs electricity governance with three new rights. First is the universal right to be protected from energy poverty. Second, is the right to access energy efficiency and energy management services to reduce bills.60 Third is the right to collect revenues by producing renewable energy.61 58 Nova Scotia’s “Keep the Heat” program was often announced in the fall; later cancelled and then brought back in a new form. The level of support has also been inconsistently changed. 59 (see Colton 2004). This program would provide fixed rebates on bills to low-income individuals to meet a household energy burden objective. The plan also includes energy efficiency, arrearage credits and crisis intervention. Costs of the program would be paid by ratepayers. In some cases, these programs have paid for themselves by reducing utility credit and collection costs. The program can also provide a powerful conservation incentive by allowing customers to keep the fixed credit for a certain period of time if they reduce energy consumption or to hold the fixed credit amount constant over a period if the customer increases energy consumption. This program complements broader poverty and sustainable energy initiatives because the fixed credit will be reduced or eliminated (after the conservation incentive delays mentioned above) if households experience increased income and/or improved energy efficiency. This program or a program similar to this could be extended to non-electric fuels as well as part of a broader allfuels energy poverty program. It is obviously easier to implement such a program when energy service is provided by regulated utilities (electric and natural gas). Regulated utilities in the United States have implemented lowincome Universal Service Programs. 60 Previous recommendations made by Dalhousie University with respect to Demand Side Management Administration that recommended maximizing the ability to participate in programs speak to the right. For example, the report states “the three-year targets of the Agency will undoubtedly be set in the full understanding that they must contribute to the provincial sustainability targets whilst maintaining equity between sectors and making special provision for those on low income.” (Wheeler 2008 15) 61 Considerations here could include grid access, reasonable payments for renewable energy supply, and encouragement of a wide variety of technologies to encourage wide participation. 11 3 Opportunities for Nova Scotia 3.1 Feed-in Tariff A feed-in tariff (FIT) policy has real potential to aid in the implementation of many of the solutions discussed in this document. The FIT’s more simplified and certain contracting process has been shown to reduce uncertainty and risk in capital markets.62 The alleviation of contract uncertainty could also encourage developers to invest more time and effort in early planning and outreach with local communities. FITs can also add a level of reflexivity by adjusting incentive levels of different technologies or making rates of return contingent on criteria related to public health, risk and sustainability. FITs also enable community ownership – increasing social acceptance and providing energy cost security. Yet community ownership under a FIT is not automatic. Nova Scotia could explore how to enhance community ownership under a general FIT program, perhaps by including community and First Nation participation adders and a micro-FIT program similar to Ontario. To extend the ability of a wider group of stakeholders and citizens to participate as producers FITs for a variety of technologies should be created. All of the technologies within the scenarios, including CHP, could be developed through a FIT.63 Enhancing citizen ability to manage their energy systems via smart grid technologies could also be enhanced by exploring FITs for energy storage services. 3.2 Mobilizing Community Participation Studies have emphasized the role of particular actors within specific historic and cultural contexts to explain the current leadership role of jurisdictions in renewables. Denmark has a culture of local experimentation, popular grass-roots participation, and a strong co-operative movement.64 German environmental interest stemmed from the anti-nuclear movement.65 Unlike centralized energy systems, renewable energy technologies require bottom-up participation. Nova Scotia’s recent extension of the 2010 renewable target indicates that top-down government mandates are not enough. Framework policies can open the door to renewable energy development, but someone has to be willing to walk through this door. A community capacity building strategy is a necessary complement to procurement and interconnection policies. Nova Scotia must assess what actors and organizations with their own cultural histories will become champions of renewable energy development. Obvious candidates include rural organizations, First Nations and the province’s cooperative sector as well as environmental organizations. Manufacturers’ organizations could also coordinate CHP and on-site generation strategies for industry. These constituencies would be well placed to organize renewable energy resource hubs66, in cooperation with the utility, to facilitate the 62 63 (Mitchell, Bauknecht, and Connor 2006, 297-305; Commission of the European Communities 2005) Except imports which would diminish citizen participation in Nova Scotia 64 (Kamp 2008; Jamison and Baark 1999, 199-218) 65 (Breukers and Wolsink 2007, 2737-2750) 66 A Renewable Energy Resource Centre for Nova Scotia was discussed in (Lipp 2008) 12 development of community renewable projects and the early and fair commencement of community consultations. Higher level issues of social risk and technology choice can be facilitated through mechanisms such as Strategic Environmental Assessments and scenario workshops. 3.3 From Passive to Active Energy Citizenship Renewable energy and smart-grid technologies create opportunities to expand citizen participation in energy systems. Citizen-producers, community micro-grids, home energy management systems, and vehicle power storage have the ability to change the traditional model of the passive citizen-consumer. If they wish, citizens can actively participate in the generation and management of household and community energy systems. This will present new benefits and new responsibilities. The potential for greater household energy autonomy is based on institutions of mutual support. Social contracts between citizens and governance institutions are based on mutual promises of social peace and security. Energy cost security will be a paramount concern in the social governance of all future energy systems, regardless of scenario. Nova Scotia must ask itself if the time has come to replace an energy cost paradigm that seeks to protect consumers by attempting to keep energy prices low with one that expands citizen power over energy production and usage and provides a social safety net to guard against energy poverty. If so, changes to the UARB mandate, changes to NSPI’s business plan, and potentially the creation of new institutions are likely to be required. The technical and socio-cultural changes that smart grid development entails must commence in the coming years.67 4 “Both And” Solutions Throughout this paper I have attempted to show that win-win, “both and” solutions can be found, but that they often involve reframing habitual modes of thinking. If we put aside the NIMBY label, we discover that more occasions exist to develop renewables in a manner that is social acceptable to local communities. If we recognize that all decisions involve risk we can begin to self-reflect and develop new technologies in ways that mitigate new and existing risks. If we accept that the services energy provides are the most important and not the amount of energy, or type of energy used, we are given more room to find mutually beneficial social bargains. And if we recognize that energy cost security is not solely dependent upon energy price, we can implement solutions to energy poverty and energy cost insecurity that complement and accelerate, rather than impede, the transition to sustainability. 67 Market analysts are forecasting a fairly aggressive development of smart grid and energy storage technologies between now and 2015. (Leeds 2009; Clavenna and Kluza 2009) 13 Appendix A: Social Criteria Matrix and Ranking Some common criteria can be pulled out of this paper’s discussion to highlight social considerations within each scenario. These criteria include: 1) ACCEPTANCE Level of social acceptance (or lack of social resistance) 2) PRODUCTION Extent of citizen participation as energy producers 3) USAGE Extent of citizen participation as energy managers (or ability to control energy usage) 4) PRICE IMPACT Social impact of energy prices (e.g. energy poverty, economic insecurity) 5) REFLEXIVE Ability to use new information about social risks, health concerns, unintended consequences to modify, improve, re-adjust development pattern. In the matrix below each criterion is subjectively ranked on a scale of 1 to 5, with one being low and 5 being high. 68 68 An additional significant digit has been added to “price impact”. This is meant to reflect the likelihood of price impacts occurring in any “do nothing” or “no renewable” scenario as well as to reflect that the burden of higher per unit cost of some energy technologies will be spread across all ratepayers. 14 Social Criteria Matrix Scenario 1 - "Blowing in the Wind" ACCEPTANCE PRODUCTION 3 & ?? 1 - w/o community ownership Scenario 2 - "Big Wind and Big Biomass" ACCEPTANCE PRODUCTION 2 & ?? 2 - w/o community ownership 3 - w/ community ownership 3 - w/ community ownership USAGE PRICE IMPACT REFLEXIVE 2 3.2 2 USAGE PRICE IMPACT REFLEXIVE 2 3 2 Scenario 3 - "Displacement and Tech Push" ACCEPTANCE PRODUCTION 3 & ?? 2 - w/o community ownership Scenario 4 - "Diversified Portfolio / Smart Grid" ACCEPTANCE PRODUCTION 4 & ?? 3 - w/o community ownership 3 - w/ community ownership 5 - w/ community ownership USAGE PRICE IMPACT REFLEXIVE 3 3.8 4 USAGE PRICE IMPACT REFLEXIVE 5 3.5 5 15 Social Criteria Matrix Ranking Explanation ACCEPTANCE Scenario All Scenarios 1 2 Rank ?? 3 2 Explanation No scenario speaks directly to procedural justice issues Some resistance due to increased transmission line build and wind capacity More resistance due to added biomass concerns related to land-use, air pollution, sustainability Social concerns related to risk of new technologies Less resistance due to fewer transmission lines and greater ability to couple diverse acceptance of technologies with diverse local communities 3 4 3 4 PRODUCTION Scenario Rank Explanation All Scenarios Greater opportunities for citizen participation enhanced with policies to encourage community ownership Rankings w/o community ownership 1 1 Minimal participation due to imports and use of one technology in exclusion with lack of community ownership 2 3 2 2 Greater participation from industry with addition of biomass tech Some participation due to technological diversity, but demonstration projects prevent direct, long-term participation Increased participation with technological diversity 4 3 Ranking w/ community ownership 1 3 Participation by rural communities in particular 2 3 Enhanced participation by industry and less volume for rural community participation Some participation due to technological diversity, but demonstration projects prevent direct, long-term participation Participation by wide variety of stakeholders and citizens because of technological diversity and potential energy storage through smart grid 16 3 3 4 5 USAGE Scenario Rank Explanation 1 2 Some ability to control usage via existing DSM measures, but nothing new resulting from renewables policy 2 2 Some ability to control usage via existing DSM measures, but nothing new resulting from renewables policy Enhanced ability to control usage due to “displacements”. Some methods are foreign and inaccessible. Smart grid provides ability to monitor and manage usage 3 3 4 5 PRICE IMPACT Scenario Rank Explanation 1 3.2 Added costs for minor system upgrades 2 3 3 3.8 Least-Cost plan according to IRP Higher levelized cost of emerging technologies – big push. Cost of failure and waste inherent in any learning process. Higher levelized cost of emerging technologies 4 3.5 REFLEXIVENESS Scenario Rank Explanation 1 2 No diversity, but increased experience with renewable integration issues that will benefit other intermittent/variable technologies 2 3 4 2 4 5 Little diversity Active monitoring of emerging technologies for risk and unintended consequences Enhanced diversity and ability to scale-up or scale down a variety of technologies 17 References Abele, Frances. 2005. The smartest steward? indigenous people and petroleum-based economic development in canada's north. In Canadian energy policy and the struggle for sustainable development., ed. 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