Introduction

In the most recent sitting of Nova Scotia’s House of Assembly, Energy Minister Michel Samson introduced Bill No. 110, the Marine Renewable-energy Act.² If enacted, it will make Nova Scotia the first province to have a distinct and comprehensive regulatory framework for the development and oversight of marine-based renewable energy activities. The proposed Act encompasses all forms of marine renewable energy, including marine wind energy and wave energy as well as tidal energy, but it is primarily directed to the development of tidal energy resources, particularly those within Nova Scotia’s portion of the Bay of Fundy. This reflects the origins of the Act in the decade of attention successive Nova Scotia governments have given to understanding, testing, developing and promoting the tidal energy potential of the Bay.

From the beginning of this process, it has been clear the development of tidal energy in the Bay will depend on development and implementation of a regulatory framework that supports the development of the industry, protects the environment, enjoys public confidence, and contributes to the achievement of Nova Scotia’s energy policy objectives. The attempt to build such a framework has taken place while sharp debate about regulation and economic development in multiple natural resources sectors has been at the centre of policy and political debate in Nova Scotia.³ Along with the growing global interest in tidal energy and the recognized richness of the Bay of Fundy as a potential tidal energy resource, this makes Bill 110 and Nova Scotia’s wider approach to regulation of tidal energy of interest from a broader energy regulation perspective.

Background and Context

Tidal Energy Technology and Technology Testing in Nova Scotia

Nova Scotia already obtains some of its electricity from Bay of Fundy tides via the 20 MW Annapolis Royal Tidal Power Plant, commissioned in 1984.⁴ This plant, the only one of its kind in North America and third largest of its kind in the world, uses barrage technology: water entering and leaving a tidal estuary is forced through a barrage built across the full width of the estuary. Like all electricity produced from tidal energy, the electricity produced has the intermittent quality of wind and solar generated electricity but the predictability associated with hydroelectric generation. The problem with barrage technology is its environmental impact, including its impact on silt build-up. This is one of the reasons it is not being considered for wider deployment in Nova Scotia, even though it produces cheaper electricity (in the range of $0.14 to $0.27 per kWh) than the electricity that alternative tidal technologies are currently capable of producing (in the range of $0.44 to $0.51 per kWh).⁵

Starting roughly in 2005, Nova Scotia – and New Brunswick – started to consider the possibilities provided by tidal in-stream energy conversion (TISEC) technology. This technology uses devices similar to wind turbines to extract kinetic (free-flowing) energy from tidal currents.⁶ In general, this technology comes in one of three configurations – horizontal axis turbines, vertical access turbines and oscillating hydrofoils – all of which can be deployed on the surface, on the sea-bottom or in the water column.

TISEC’s strength is its potentially negligible environmental impact. While there are unanswered questions about the impact the technology may have on the biophysical environment when deployed at a commercial scale in a “tidal array” of TISEC devices, analysis to date has not identified the potential for significant environmental hazards. In addition, TISEC devices, unlike barrages, can be re-oriented, relocated or removed from the tidal environment to address or mitigate detected problems.

To encourage and facilitate the testing of TISEC technology in the Bay of Fundy – and more specifically in the part of the Inner Bay of Fundy called Minas Basin – Nova Scotia commissioned the construction of a test centre at Minas Basin in 2008.⁷ The centre, the only facility of its kind in Canada, is operated by the Fundy Ocean Research Centre for Energy (FORCE), a not-for-profit company formed and governed as a collaboration between the provincial Department of Energy and the developers selected by the province after a request for proposals to undertake TISEC demonstration projects at the site. It is funded by grants from the federal and provincial governments and Encana, as well as by the developers who will test TISEC devices at the centre.

The centre currently has four offshore “berths” for demonstration projects. Each berth is connected to an onshore substation by a subsea power cable. This substation is connected to the NSP transmission grid by a 10 km transmission line. The centre is currently approved for a 5 MW capacity but could be upgraded to 64 MW of capacity.⁸

The completion of a joint federal-provincial environmental assessment on the FORCE centre in 2009 means that each developer who uses the site does not have to incur the costs of a separate environmental assessment.⁹ The centre also reduces the costs of TISEC testing by offering developers a shared observation facility, submarine cables, grid connection, and environmental monitoring facilities and services. This sharing of infrastructure is also designed, like FORCE’s shared governance model, to ensure that projects are consistently and transparently monitored and evaluated from both energy conversion and environmental performance perspectives. Provincial oversight, both by Environment and Energy, an Environmental Monitoring Advisory Committee, and a Community Liaison Committee are all in place to ensure FORCE and developers fulfill these monitoring, evaluation and transparency objectives.

Economic, Environmental and Energy Objectives

Nova Scotia’s interest in testing TISEC technology in the Bay of Fundy was propelled by a mix of economic and environmental policy considerations. Bay of Fundy tides are the highest and strongest in the world.¹⁰ There is growing global interest in the potential contribution of tidal energy to climate change mitigation.¹¹ TISEC technology is however still in a developmental stage: it has yet to be commercially deployed anywhere.¹² Together, these factors suggest that the development of the Bay’s tidal energy potential could put Nova Scotia, as well as New Brunswick, at the forefront of an emerging energy sector of significant proportions.

In 2006, a study by California’s Electric Power Research Institute gave weight to these aspirations by concluding that the Bay’s tidal energy potential – currently estimated at more than 2400 MW – was among the highest in the world.¹³ Combined with the Bay’s relatively harsh conditions, this confirmed that the Bay offered good opportunities for testing both the efficiency of TISEC technology in generating electricity and its durability and functionality in harsh operational conditions. The idea is that technology proven in the Bay of Fundy would be technology proven for application in most locations – it would have met the “Bay of Fundy Standard”.

The greening of Nova Scotia’s electricity system also made the energy potential of the Bay of Fundy attractive. In 2005, roughly 90 per cent of Nova Scotia’s electricity was generated from fossil fuels, primarily coal, by Nova Scotia Power.¹⁴ Starting in that year, successive regulations made under the Environment Act placed escalating emission limits for sulphur dioxide, nitrogen oxides, mercury and other greenhouse gasses on the utility.¹⁵ In 2007, a policy commitment to reduce greenhouse gas emissions to 10 percent below 1990 levels by 2020 was legislated by the Environmental Goals and Sustainable Prosperity Act.¹⁶ In 2010, renewable energy standards were adopted under the Electricity Act (in accordance with a Renewable Electricity Plan of that year) which established renewable energy standards of 25 per cent for 2015 and 40 per cent for 2020.¹⁷ These regulatory requirements are now the basis of an equivalency agreement between Nova Scotia and the federal government under the provisions of the Canadian Environmental Protection Act.¹⁸ Compliance with the provincial regulations is deemed to be equivalent to the compliance with federal regulations – the Reduction of Carbon Dioxide Emissions from Coal-Fired Generation of Electricity Regulations – that would otherwise apply to NSP.¹⁹

Optimism about the Bay of Fundy’s tidal energy potential had both a cause and effect relationship to these regulatory developments. Especially before the development and regulatory approval of the Maritime Link Project, tidal power was regarded as potentially important to the extent of Nova Scotia’s opportunity to significantly green its electricity system. Nova Scotia was an energy island, connected to the North American grid only by the intertie at the New Brunswick border that the two provinces use to manage peak demand. This meant that renewable energy on the scale required to green the province’s electricity system would have to come from within Nova Scotia. In that context, it was important from a system reliability perspective that tidal power promised a volume of renewable energy that was, unlike wind and other indigenous alternatives, predictable.

The Maritime Link project has altered this context.²⁰ That project will give Nova Scotia access to hydroelectric power from the dams being constructed in Labrador and carry Newfoundland hydroelectricity to North American markets through an expanded transmission cable between Nova Scotia and New Brunswick. It will therefore supply Nova Scotia with a large block of renewable energy that will not only be predictable but constant and cheaper than tidal power is likely to be for some time. It also gives Nova Scotia access to additional sources of renewable energy from the east and west.

The context for the development of tidal power has changed in a broader sense: the assumptions about relentless and sharp increases in the price of fossil fuels that informed analysis of tidal energy’s economic potential in the period between 2005 and 2010²¹ have proven off the mark, at least in the short-term, due to the combined effect of the shale-gas revolution, the recession and the production decisions made by leading oil producing countries. The result is that changes in the price of fossil fuels have not narrowed the gap between the cost of producing electricity with fossil fuels and the cost of producing it with tidal energy to the extent some anticipated.

These circumstances call for realism and caution in the development of the Bay of Fundy’s tidal energy potential – as recognized in virtually every official document on tidal power produced over the past 10 years.²² Another factor is the fate suffered by the OpenHydro device put in the water by NSP in 2009: it had to be removed in 2010 when it was severely damaged by the force of the tides.²³ References to this event now emphasize the successful retrieval of the device but the event also clearly shows that the mastery of the Bay of Fundy by TISEC technology cannot be assumed.

Still, the rationale for continuing with concerted effort on Fundy’s tidal energy potential remains strong. The transmission line being built between Nova Scotia and New Brunswick for the Maritime Link will also give Nova Scotia an ability to export tidal energy it otherwise would not have. Demand for that energy beyond Nova Scotia may be increased by the combined effect of many factors, including consumer demand for clean energy, the limitations of renewable energy alternatives and the outcome of political decision-making on climate change mitigation. This same complex mix of factors will shape the longer-term demand for renewable energy within Nova Scotia, possibly in directions that cannot be economically satisfied by the alternatives to the abundant supply of tidal energy available from the Bay of Fundy. Meanwhile, the cost of tidal energy will decrease if the efficiency of TISEC technology is improved. This requires technological innovation that can only happen from deployment and testing in tidal environments, including those as challenging as the Bay of Fundy. Jurisdictions that host that innovation will have opportunities to export the resulting technology and expertise.

Nova Scotia claims it can, with the benefit of strategic partnerships with other jurisdictions,²⁴ be one of these jurisdictions because of the resource richness of the Bay of Fundy and the human, institutional and infrastructure resources it has in many of the relevant disciplines (such as oceanography and marine engineering) and sectors (including a variety of marine industries and professional services sectors).²⁵ Currently, its objective is to achieve 300 MW from commercial production by 2020. The regulatory objective is to operationalize a regulatory system that will facilitate and enable the development of the industry to this level and beyond. It is to make regulation one of the province’s jurisdictional advantages in tidal energy.

The Role of Consultative Processes

In 2008, the Department of Energy, with the benefit of academic advice²⁶ and stakeholder support, mandated Offshore Energy Environmental Research Association (OEER) to complete a strategic environmental assessment (SEA) of renewable energy in the Bay of Fundy, particularly tidal energy produced by TISEC technology.²⁷ OEER in turn established a multi-disciplinary and multi-stakeholder Technical Advisory Group to lead the process and a 24-member Roundtable of stakeholders and Mi’kmaq representatives.²⁸ The process included: a background report prepared by Jacques Whitford;²⁹ community forums; funding for community research and input from community groups; and the website posting for comment of the background report and the draft SEA report.³⁰ The context included uncertainty and therefore apprehension about how tidal energy’s development might damage the fishing industry, including the lucrative lobster fishery, and interfere with Mi’kmaq rights and interests or disrupt other users of the Bay, as well as potential for opposition based on these uncertainties. The broader context is a persistent concern in Nova Scotia about the rationale for more cohesive and integrated management of coastal zones and resources and a widely held perception that resource industries are not properly or sufficiently regulated.

The overriding conclusion reached by the SEA was that the newness of the technology precluded definitive or even firm conclusions on the potential impact of TISEC technology on the biophysical and socioeconomic environments. For example, the impact the removal of significant amounts of energy from tides could have on their velocity and connected hydrodynamic and biophysical processes was identified as a significant unknown.³¹ Such unknowns led the SEA to emphasize an incremental approach to development in which, for example, successful completion of demonstration projects would be a prerequisite for commercial projects and commercial projects would be required to scale up incrementally as monitoring showed the safety of expansion, using only removable equipment.³² The unknowns also led the SEA to emphasize the importance of robust monitoring, evaluation and research, as well as the infrastructure needed to make them possible, and ongoing consultation with potentially affected constituencies. Of 27 recommendations, at least 10 dealt wholly or partly with the themes of research, monitoring and evaluation, while at least 15 could be said to be primarily, mostly, or significantly about continuing engagement with stakeholders or the Mi’kmaq.³³

The SEA did however confirm that TISEC technology does not involve known harms to the environment. Implicitly, this was the basis for the recommendations that demonstration projects proceed and for the enactment of marine renewable energy legislation, encompassing 10 principles of sustainable development, to encourage the “safe and environmentally sound” development of the industry.³⁴ It was also the basis for two other recommendations: the development of a marine energy benefits strategy and a Marine Renewable Energy Community Participation and Benefits Strategy.³⁵

The Department of Energy response was to quickly promise action on all SEA recommendations, albeit not the action proposed by the SEA in all cases.³⁶ Specifically, it accepted the SEA recommendations most directly connected to regulation and legislation, including those calling for: an incremental approach to development; a demonstration project program; marine renewable energy legislation; a requirement that developers carry out Mi’kmaq ecological knowledge studies and consult with Mi’kmaq communities; environmental assessments before permitting of demonstration and commercial projects; and procedures and protocols to ensure consultations with fishers and fisheries stakeholders “at every stage of tidal development.” It also endorsed the principle emphasized in the SEA, that tidal resources must remain and be developed as public resources.

In the bigger picture, the SEA, which was updated in 2014,³⁷ accomplished much of what proponents for SEA claim it can do:³⁸ it gave those outside of government and industry a meaningful ground-floor opportunity to influence decisions on planning and policies and the design of legislation and regulation. It gave them a forum for influencing the goals and objectives that government and industry decision-making should be both guided and judged by. It thereby contributed to open-mindedness about the development of a new industry that is bound to have an adverse effect on some even if it is broadly beneficial for the province. This has given social licence to tidal energy’s development in Nova Scotia.³⁹ The SEA also helped to inform, facilitate and streamline the joint federal-provincial environmental assessment that was subsequently completed on the FORCE test centre by Nova Scotia’s Minister of Environment, Transport Canada, Fisheries and Ocean Canada and Environment Canada.

The SEA’s recommendations specifically relating to regulation and legislation were developed in a further consultative process led by Dr. Robert Fournier of Dalhousie University’s Department of Oceanography and Marine Affairs Program in 2010-11.⁴⁰ His recommendations called for: a regulatory and legislative framework informed by a strategic plan for the marine renewables sector; continuing engagement with the Mi’kmaq; a licensing system containing clear quantitative criteria for transition from the demonstration to commercial stage of operations; strong and explicit commitment to transparency in regulatory decision-making; adoption and use of marine spatial planning in regulatory decision-making; a comprehensive regulatory plan; a federal/provincial working group on regulation and a model of regulatory collaboration like the Nova Scotia offshore oil and gas regime whereby the province and the federal government could incorporate their respective laws into a common regulatory framework; the consolidation of regulatory authority in a position or office conforming to the model of a “trusted regulator”; and the use of SEA where industry expands, at regular intervals and when there are strong indicators of physical, biological and socioeconomic change.⁴¹

Many of Fournier’s recommendations and those of the SEA are reflected in the Marine Renewable Energy Strategy released by the Department of Energy in 2012, which is itself a response to the SEA’s recommendation for a strategic approach to the development of the sector and Fournier’s call for legislation and regulation based on a strategic plan.⁴² As proposed by both the SEA and Fournier, the province’s strategy encompasses distinct but interconnected plans for research, sector development and regulation. Most broadly, the influence of the SEA and of Fournier, and of consultations with Nova Scotia’s Mi’kmaq, is seen in the “Strategic Objectives” chapter of the Nova Scotia Renewable Energy Strategy: to build and maintain public trust through science, accountability and transparency; to develop approaches that are technically, economically and environmentally sustainable; to build an industry in Nova Scotia; and to consult and collaborate with the Mi’kmaq. ⁴³

Economic Regulation and the Market for Tidal Energy

One of the priorities within the “build the industry” component of Nova Scotia’s strategy is marketplace development for the electricity tidal energy projects will produce. This reflects recognition that although it must become “commercially viable over time” primarily through technological innovation, “tidal power will, initially at least, require market supports”.⁴⁴

Feed-in-tariff (FIT) programs have been created to provide some of this support. In 2010, amendments to the Electricity Act created a community feed-in-tariff (COMFIT) for “low-impact electricity” from projects owned by community organizations such as Mi’kmaq band councils, municipalities, universities, community economic development corporations, and co-operatives.⁴⁵ Consistent with the SEA’s recommendation for attention to community participation and benefits, “small-scale in-stream tidal”, defined as tidal power from a device with a capacity under .5 MW capable of being connected to the grid through a distribution system, qualifies as “low-impact electricity” eligible for the COMFIT.

The 2010 amendments also provided for a separate feed-in-tariff for privately owned “developmental tidal arrays”, defined to be one or more devices with a capacity greater than .5 MW capable of being connected with the grid through a transmission system.⁴⁶ This is the tariff that will apply to developmental projects at the FORCE test centre.

Responsibility for setting both tariffs was assigned to the province’s Utility and Review Board (UARB) and responsibility for deciding applications to participate in the tariff programs to the Minister of Energy. An application for approval for the development feed-in tariff is required to be more extensive than one for the COMFIT.⁴⁷ In addition to a “project concept”, a “business case”, evidence of community support and demonstrated knowledge of various matters, an application for the development tariff must also include a project plan, a full description of the technology to be used, a business plan, a risk management plan and information on how the project will build and maintain public trust in tidal development and contribute to the tidal energy industry in Nova Scotia. Another difference is that an application to participate in the developmental tidal tariff can only be made in response to a Ministerial invitation or public call for applications.

In 2011, the Board characterized tidal technology as “experimental” in setting the COMFIT for tidal at $652/MWh, on the assumption of a production costs of $10,076 per kilowatt.⁴⁸ The rationale was recognition both that development demanded a high tariff and that ratepayers were protected by the reality that tidal was “likely to be a small component of the overall COMFIT program.” In 2013, the Board ruled that the feed-in-tariff for “developmental tidal arrays” could be structured, at the option of developers, either as a “test tariff” or as a “developmental tariff.”⁴⁹ Under the first, the tariff is either $575 or $455/MWh for three years, depending on whether annual production is below or above 3,300 MWh, and either $495 or $375/MWh for 15 years, depending on whether annual production is below or above 16,650 MWh. For developers choosing the developmental tariff, the rate is either $530 or $420/MWh for 15 years, depending on whether annual production is below or above 16,650 MWh. Both “paths” will provide developers with the same revenue on a net present value basis. The test path option allows front-ending some of that revenue.

In its Marine Renewable Energy Strategy, the province stated that the total impact of tidal feed-in-tariffs on rates would be between 1 and 2 per cent.⁵⁰ In January of 2015, it put consideration of new applications for the COMFIT, including new tidal applications, on hold.⁵¹ By then, five tidal projects, all owned by community economic development organizations, had been approved.⁵² Meanwhile, the four tidal energy developers who had previously been given approval to test their technology at FORCE have all been approved for the developmental tariff for a combined total of 17.5 MW of electricity.⁵³

As noted above, the longer-term market prospects for Nova Scotia tidal energy will be improved when the Maritime Link project fully connects Nova Scotia into the North American grid. The UARB’s approval of that project may prove to be economic regulation’s greater contribution to the development of a market for Nova Scotia’s tidal energy industry.⁵⁴

Proposed Marine Renewable-energy Act⁵⁵

Under the proposed legislation, “marine renewable energy resources” are defined to include tides and currents (as well as waves and wind over marine waters). “Marine renewable electricity” is defined as electricity produced from marine renewable energy resources.⁵⁶ A “generator” will be defined to mean any device or technology, including an “in-stream tidal-energy converter” used, or tested for use, in producing marine renewable electricity.⁵⁷ Generators will be “connected generators,” used to produce electricity for use or consumption onshore, or “unconnected generators.”⁵⁸

The Act will establish two “areas of marine renewable-energy priority”, including the “Fundy Area of Marine Renewable-energy Priority”, and authorize the creation of others.⁵⁹ Constructing, installing or operating a generator – and related cables, structures and equipment – will be prohibited within these designated areas unless a licence (for connected generators) or permit (for unconnected generators) is obtained under the Act.⁶⁰ The Minister will be authorized to issue licenses to those already issued a feed-in tariff approval for a developmental project at the FORCE site.⁶¹ Otherwise, it will only be possible to apply for a licence in response to a call for applications.⁶² A call for applications must relate to a geographic area “within a marine renewable-electricity area”.⁶³

It will be unlawful to interconnect a generator with the electrical grid or an onshore electricity consumer except from within a “marine renewable-electricity area.”⁶⁴ The Act will create the first of these, the “FORCE Renewable-electricity Area”, located in the Fundy Area of Marine Renewable-energy Priority. Cabinet will have the authority to designate other marine renewable-electricity areas.⁶⁵ These must be within a designated “area of marine renewable-energy priority”. So, building a connected generator outside of a renewable-electricity area located within an area of marine renewable-energy priority will be prohibited.

These provisions, as well as the provisions giving extensive oversight and directional powers to the Minister, seem responsive to the call for a regulatory framework that avoids or minimizes locational conflict with other marine activities and that otherwise ensures a strategic, planned, cautious and incremental approach to development. Along with the deliberate choice not to require or provide for the leasing of marine space to those given licences or permits, they are also responsive to the call for an approach that keeps marine resources firmly in the public domain. It may however be asked if the emphasis on control of development will be at the expense of investment and innovation.

Other provisions respond to the call for a continuation of the proactive engagement of the public and stakeholders in the strategic planning level of decision-making. The Act will require consultations with the public before a marine renewable-electricity area is established or the regulations establishing one are materially modified.⁶⁶ It will specify the content of the public notice that must be issued to initiate these consultations.⁶⁷ It will require the Minister to issue a background report on resource potential and environmental and socio-economic factors before the consultation and a report, for public comment prior to decision, summarizing the information received from the consultation after it is completed.⁶⁸

By the standards of Nova Scotia resource development legislation, these consultation requirements are very specific and directive. Bill 110 goes further: it says the creation of a marine renewable-electricity area (or material modification of a regulation establishing one) must be proceeded by a strategic environmental assessment.⁶⁹ In a Nova Scotia and perhaps a Canadian context, this is an exceptional legislative commitment to SEA,⁷⁰ clearly reflective of the role that SEA has already played in tidal power in Nova Scotia. It is interesting that it is proposed in legislation to be administered by the Minister of Energy and not the Minister of Environment. This aligns with the understanding of SEA as a planning and not a regulatory process. It is also aligned with the proposed Act’s stated purpose: “to provide for the responsible, efficient and effective development of marine renewable-energy resources through a regulatory system that is staged, consultative and adaptive and integrates technical, environmental and socio-economic factors.”⁷¹ SEA can play a vital role in the accomplishment of this purpose.

In the licensing process, the Minister will be required to provide the public basic information about the process but not further consultation.⁷² Presumably, the premise is that ample public engagement in the creation of a marine renewable electricity area obviates the need for public participation in licensing, especially once the processes required under the Environment Act have been applied. It will be interesting to see if the premise holds when the Act is brought into implementation in the face of what appears to be a growing citizen expectation in Nova Scotia for more rather than less involvement in the transactional and operational end of regulation. Much will depend on whether Energy acts as the “trusted regulator” envisaged by Fournier and on whether Energy and the sector effectively implement the “Statement of Best Practices for In-Stream Tidal Energy Development and Operation” which Energy released in 2014.⁷³

Bill 110 provides a range of options for collaboration and coordination with other regulators, including federal regulators. This is responsive to the reality that federal and provincial jurisdiction will both apply to in-stream tidal energy projects, whether they are located in provincial or federal waters.⁷⁴ The Minister would, for example, have the authority to delegate “any power or duty” to a provincial, federal or municipal employee; to transfer administration of a provision of the Act to another minister, a federal agency or a municipality; and to enter into agreements with another province, Canada or another state for the “coordination of regulatory activities.”⁷⁵ While extensive, the provisions of the Bill in this respect fall short of providing for joint management on the model of the federal-provincial legislative framework under which Nova Scotia and Canada jointly manage offshore oil and gas development through delegation of their respective claims to administrative jurisdiction to the Canada-Nova Scotia Offshore Petroleum Board, as Fournier had contemplated.

Bill 110 contains extensive regulation-making powers. Envisaging the day when tidal energy will not only be feasible but profitable, these include the power to make regulations creating a system of royalties, rents and fees that the producers of marine-renewable electricity would be required to pay.⁷⁶

Conclusion

Over the past 10 years, Nova Scotia has taken a “slow and steady” but determined and sustained approach to development of its tidal energy resources. Within this approach, it has given considerable attention to building a regulatory framework that will facilitate and enable development while ensuring development occurs on terms and conditions that Nova Scotians will support or at least accept. Success will depend on how the framework is operationalized, not only on how it is designed, but so far, the approach taken to both design and operationalization is encouraging. The test will come when the turbines hit the waters, especially on a commercial scale. That will test not only the energy potential of the Bay of Fundy and the technical capacity of the machines used to harness it but also the regulatory capacity of Nova Scotia to ensure it is all governed and seen to be governed in the public interest.

1. William Lahey, Associate Professor, Schulich School of Law, School of Health Administration and College of Sustainability, Dalhousie University. Thanks to Kaleigh Henry for her superb research assistance with this article.
2. Bill 110, An Act Respecting the Generation of Electricity from Marine Renewable-energy Resources, 2nd Sess, 62nd Leg, Nova Scotia, 2015 [Bill 110].
3. Nova Scotia, Commission on Building Our New Economy, Now or Never: An urgent call to action for Nova Scotians (Report) (Commissioner Ray Ivany) (Halifax: the Commission, 2014); Independent Panel on the Regulation of Aquaculture, A New Regulatory Framework for High Value/Low Impact Aquaculture in Nova Scotia, by Meinhard Doelle & William Lahey (Final Report) (Halifax: Province of NS, 2014); Independent Panel on Hydraulic Fracturing, (Report) (Chair David Wheeler) (Halifax: NS Department of Energy, 2014); Nova Scotia Tax and Regulatory Review, Charting a Path for Growth, by Laurel Broten (Halifax: Province of NS, 2014).
4. Marine Renewables Canada, “Marine Renewable Energy in Canada & the Global Context: State of the Sector Report” (2013) at 8, online: MRC <http://www.marinerenewables.ca/wp-content/uploads/2012/11/State-of-the-Canadian-MRE-Sector-20131.pdf> [Marine Renewables Canada]; Fundy Ocean Research Center for Energy (FORCE), “Tidal Energy: A history of innovation”, online: FORCE <http://fundyforce.ca/renewable-and-predictable/a-history-of-innovation/>; International Renewable Energy Agency, “Tidal Energy: Technology Brief” at 11, online: <http://www.irena.org/DocumentDownloads/Publications/Tidal_Energy_V4_WEB.pdf> [IRENA].
5. Nova Scotia, Department of Energy, Marine Renewable Energy Strategy, (Halifax: Department of Energy, May 2012) at 11 [Marine Renewable Energy Strategy].
6. Electric Power Research Institute (EPRI), “North America Tidal In-Stream Energy Conversion Technology Feasibility Study”, (Palo Alta: EPRI, 11 June 2006) at 3 [TISEC Feasibility Study]. <http://oceanenergy.epri.com/attachments/streamenergy/reports/008_Summary_Tidal_Report_06-10-06.pdf>; OEER (now OERA), “Fundy Tidal Energy: Strategic Environmental Assessment”, Final Report (Halifax: NS Department of Energy, April 2008) at 13-14, online: <http://www.oera.ca/wp-content/uploads/2013/06/FINAL-SEA-REPORT.pdf> [SEA Final Report]; Marine Renewable Energy Strategy, supra note 5 at 11-12; FORCE, “Tidal Energy: Tidal Energy Generation”, online: <http://fundyforce.ca/renewable-and-predictable/tidal-energy-generation/>.
7. Marine Renewables Canada, supra note 4 at 13, 35-36; FORCE, “About: FORCE”, online: <http://fundyforce.ca/about/>.
8. Re Tidal Energy Feed-in Tariffs, 2013 NSUARB 214 (13 November 2013) at paras 28-29, accessed online with docket number M05092: <http://nsuarb.novascotia.ca/> [Re Tidal Feed-in Tariffs].
9. SEA Final Report, supra note 6 at 1-2; Marine Renewable Energy Strategy, supra note 5 at 18.
10. FORCE, “Tidal Energy: Bay of Fundy”, online: FORCE <http://fundyforce.ca/renewable-and-predictable/the-bay-of-fundy/>.
11. RenewableUK, “Ocean Energy in Europe’s Atlantic Arc: Policy assessment report”, prepared for Strategic Initiative for Ocean Energy (March 2013), online: SI Ocean <http://www.si-ocean.eu/en/>; Abbie Badcock-Broe et al,“Wave and Tidal Energy Market Deployment Strategy for Europe” (June 2014) at 19, online: SI Ocean <http://www.oceanenergy-europe.eu/images/OEF/140037-SI_Ocean_-_Market_Deployment_Strategy.pdf>; Channel MOR Project, “The MRE Sector and its Governing Regulations” (April 2015), online: <http://channelmorenergy.eu/wp-content/uploads/2015/05/channel_mre_governing_regulations.pdf>.
12. IRENA, supra note 4 at 28; OERA, “Value Proposition for Tidal Energy Development in Nova Scotia, Atlantic Canada and Canada”, prepared by Gardner Pinfold Consultants Inc. & Acadia Tidal Energy Institute (Halifax: April 2015, OERA) at I, online: <http://www.oera.ca/wp-content/uploads/2015/04/Value-Prop-English-Summary_Aprl-21-2015.pdf> [OERA Value Proposition].
13. TISEC Feasibility Study, supra note 6; Richard Karsten et al., “Assessment of tidal current energy in the Minas Passage, Bay of Fundy”, Proceedings of the Institution of Mechanical Engineers, 222, Part A: Power and Energy, (2008), 293-507.
14. Nova Scotia, Department of Energy, “Renewable Electricity Plan” (Halifax: April 2010) at 2 [Renewable Electricity Plan].
15. Air Quality Regulations, NS Reg 28/2005; Greenhouse Gas Emissions Regulations, NS Reg 260/2009.
16. Environmental Goals and Sustainable Prosperity Act, NS 2012, c 42, s 4(f).
17. Renewable Electricity Plan, supra note 14 at 2; Renewable Electricity Regulations, supra note 42, ss 6(1), 6(1)(5), 6A(1), 6A(4).
18. An Agreement on the Equivalency of Federal and Nova Scotia Regulations for the Control of Greenhouse Gas Emissions from Electricity Producers in Nova Scotia, online Environment Canada : <http://www.ec.gc.ca/lcpe-cepa/default.asp?lang=En&n=1ADECEDE-1>; Canadian Environmental Protection Act, SC 1999, c 33.
19. Reduction of Carbon Dioxide Emissions from Coal-Fired Generation of Electricity Regulations, SOR/2014-265.
20. William Lahey, “The Contributions of Utilities Regulation to Electricity Systems Transformation: the Case of Nova Scotia” (2014) 2 Energy Regulation Quarterly, online: ERQ <https://www.energyregulationquarterly.ca/articles/the-contributions-of-utilities-regulation-to-electricity-system-transformation-the-case-of-nova-scotia#sthash.puFdrJJh.IJ2b8MPd.dpbs>. For more information on how the Maritime Link will affect the energy portfolio and subsequent demand for renewable electricity within the Province of Nova Scotia, view the application documents relating to the Maritime Link Project, Matter No. M05419 of the Nova Scotia Utility and Review Board, online: <http://nsuarb.novascotia.ca/>.
21. SEA Final Report, supra note 6 at 10, 27.
22. For example, in responding to the strategic environmental assessment completed on tidal energy in 2008, the Department of Energy referred to the need for caution or a cautious approach six times in a 33-page document. The document may be viewed online at <http://fundyforce.ca/wp-content/uploads/2012/05/Tidal-SEA-Response1.pdf>.
23. Nova Scotia Power Inc., “Deployment and Recovery of the OpenHydro In-stream Tidal Turbine”, Environmental Effects Monitoring Report, Appendix B (Halifax: NSPI, 20 June 2011), online: <http://fundyforce.ca/wp-content/uploads/2012/05/Appendix-B-NSPI-Deployment-and-Recovery.pdf>.
24. Offshore Energy Research Association, “Nova Scotia and U.K. Collaborate on Tidal Industry Development” (4 March, 2014), online: http://www.oera.ca/nova-scotia-and-u-k-collaborate-on-tidal-industry-development/.; Nova Scotia, News Release, “Nova Scotia and British Columbia Collaborate on Tidal Energy” (21 July, 2014), online: NS <http://novascotia.ca/news/release/?id=20150721003>.
25. Marine Renewable Energy Strategy, supra note 5; OERA Value Proposition, supra note 12 at ii-iii; Marine Renewables Canada, supra note 4 at 21, 54-56.
26. Meinhard Doelle et al, “The Regulation of Tidal Energy Development Off Nova Scotia: Navigating Foggy Waters” (2005) 55:1 UNBLJ [Doelle et al].
27. OEER was incorporated in 2006 with funding from the Department of Energy. Its membership as of 2008 was the Department and Acadia University, St. Francis Xavier University and Cape Breton University. It has merged with the Offshore Energy Technology Research Association, an association with membership from industry, to form the Offshore Energy Research Association of Nova Scotia.
28. SEA Final Report, supra note 6 at 5-6.
29. The background report was co-funded with New Brunswick, which used it for its own SEA process. New Brunswick and Nova Scotia government officials participated in each other’s SEA process.
30. SEA Final Report, supra note 6 at 1.
31. Ibid at 5.
32. Ibid at 40-47.
33. OEER, “Fundy Tidal Energy: Strategic Environmental Assessment”, Appendix A: Recommendations Summary (Halifax: NS Department of Energy, April 2008) at 75-83, online: <http://www.oera.ca/wp-content/uploads/2013/06/FINAL-SEA-REPORT.pdf> [SEA Recommendations Summary].
34. SEA Final Report, supra note 6 at 26-28.
35. Ibid at 64-65; SEA Recommendations Summary, supra note 33 at 81.
36. Nova Scotia, Department of Energy, Bay of Fundy Tidal Energy: A response to the strategic environmental assessment”, online: <http://fundyforce.ca/wp-content/uploads/2012/05/Tidal-SEA-Response1.pdf>.
37. AECOM Canada Ltd and Acadia Tidal Energy Institute, Tidal Energy: Strategic Environmental Assessment (SEA) – Update for the Bay of Fundy (Halifax: Offshore Energy Research Association, 2014), online: <http://www.oera.ca/wp-content/uploads/2014/05/Bay-of-Fundy-SEA-Update-PART-A-B_Background-Study-and-Community-Response-Report.pdf>.
38. Doelle et al, supra note 26.
39. See Michael Cleland, “The Social Licence to Regulate: Energy and the Decline of Confidence in Public Authorities” in present issue of ERQ for more information on the notion of social licence within the context of energy regulation.
40. Robert Fournier, “Marine Renewable Energy Legislation: A consultative process” (Report) (Halifax: Government of NS, 18 July 2011) online: OERA < http://www.oera.ca/wp-content/uploads/2013/05/Fournier-Final-Report.pdf>.
41. Ibid at 70-76, “Summary of Recommendations”.
42. Marine Renewable Energy Strategy, supra note 5.
43. Ibid at ch 4.
44. Ibid at 21.
45. Renewable Electricity Regulations, supra note 17, NS Reg 155/2010, s 20.
46. Ibid, s 18(2)(a)(3), 19(1), 20(3)(a).
47. Ibid, s 22.
48. Re Renewable Energy Community Based Feed-In Tariffs, supra note 8.
49. Ibid.
50. Marine Renewable Energy Strategy, supra note 5 at 23.
51. Nova Scotia, News Release, “Community Feed-In-Tariff Program Achieves Goal, on Hold”, (15 January 2015). This review has resulted in the decision to end the COMFIT Program: see Nova Scotia Department of Energy, “COMFIT”, online: http://energy.novascotia.ca/renewables/programs-and-projects/comfit.
52. Nova Scotia, Department of Energy, “COMFIT Project Status List”, online: <http://energy.novascotia.ca/sites/default/files/files/Comfit%20Status.pdf>.
53. Nova Scotia, Department of Energy, News Release “Awards Support Tidal Industry Development” (19 December 2014), online: NS <http://novascotia.ca/news/release/?id=20141219004>. The four developers are Minas Energy, Black Rock Tidal Power, Atlantis Operations Canada and Cape Sharp Tidal Venture, each representing a consortium of local and international companies.
54. Re NSP Maritime Link Incorporated, 2013 NSUARB 154 (4 November 2013) accessed online with docket number M05419: <http://nsuarb.novascotia.ca/>.
55. Bill 110 covers much wider ground than can be fully summarized here. In particular, it contains numerous provisions on research and its promotion, on monitoring of the industry as a whole, on collection and sharing of data by licensed operators and the development and operation of non-regulatory programs. This summary concentrates on the Bill’s regulatory provisions.
56. Bill 110, supra note 2.
57. Ibid, cls 3(e)-(g).
58. Ibid, cl 3(1)(c), (g), (v).
59. Ibid, cls 10-11.
60. Ibid, cl 12.
61. Ibid, cl 27(1).
62. Ibid, cls 22-23(1).
63. Ibid, cl 23(2); In contrast, a person may apply to the Minister for a permit to construct, install or operate an unconnected generator and associated cables, structures and equipment: Bill 110, cl 32(1).
64. Ibid, cl 21.
65. Ibid, cl 66(1)-(2).
66. Ibid, cl 15ff.
67. Ibid, cls 16(1)-(2).
68. Ibid, cls 16(3)-(4).
69. Ibid, cl 17(1)(a).
70. Doelle et al., supra note 26.
71. Bill 110, supra note 2, cl 2.
72. Licenses can include terms and conditions requiring development and adherence to plans, including plans on “public consultation”, as well as “environmental protection, research, monitoring, risk-management, generator decommissioning and site restoration”: Bill 110, cl 28(a)(vi).
73. Nova Scotia, Department of Energy and Marine Renewables, “Statement of Best Practices for In-stream Tidal Energy Development & Operation” (Halifax: 2014), online: <http://energy.novascotia.ca/sites/default/files/files/Statement%20of%20Best%20Practices%20Booklet.pdf>.
74. For example, federal jurisdictions over fisheries and navigation and shipping will apply whether the waters are provincial or federal. The more fundamental question is ownership of the tidal energy resource. Nova Scotia’s claim that, subject to its boundary with New Brunswick, it has jurisdiction over the waters of the inner Bay of Fundy based on ownership of those waters, is very strong constitutionally. Its claim to jurisdiction based on ownership extending to and over the continental shelf adjacent to its land mass is more debatable; see Doelle et al, supra note 26. With respect to the development of the oil and gas resources there, Canada and Nova Scotia have basically “agreed to disagree” on their respective jurisdictional claims by adopting “mirror legislation” under which they jointly manage oil and gas development and political accords and legislation under which the revenue from this development accrues to Nova Scotia by agreement. It is of interest that “Province” is defined under the Electricity Act for the purpose of defining the locational requirement of tidal projects eligible for feed-in-tariffs to include: “the lands and submarine areas within the limits of the offshore area described in Schedule 1 to the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation (Nova Scotia) Act”. This jurisdictional claim seems to be outside the agreement to set aside jurisdictional dispute embodied in the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation (Nova Scotia) Act and the “mirror legislation” of Canada.
75. Bill 110, supra note 2, cls 7(1), 8(1), 9(b).
76. Ibid, cl 59.