NB Energy Commission Final Report 2011
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NEW BRUNSWICK ENERGY COMMISSION Final Report New Brunswick Energy Commission 2010-2011 Jeannot Volpé Bill Thompson Bill William M. Thompson Volpé Jeannot 2010-2011 Nouveau-Brunswick Commission de l’énergie du du l’énergie de Commission Rapport final final Rapport DU NOUVEAU-BRUNSWICK DU COMMISSION DE L’ÉNERGIE DE COMMISSION NEW BRUNSWICK ENERGY COMMISSION Final Report New Brunswick Energy Commission 2010-2011 Jeannot Volpé William M. Thompson Energy Efficiency • Renewable energy • Transition • Natural gas • Petroleum products • Regulatory • Education and awareness • R&D Final Report New Brunswick Energy Commission 2010-2011 Printed in New Brunswick CNB 8082 Table of contents i) Executive summary . 1 1 . Introduction . 3 1.1 Composition and mandate . 3 1.2 Process . 3 2 . New Brunswick in profile . 4 2.1 Population and economic profile . 4 2.2 Challenges facing New Brunswick. 4 2.3 Strengths of New Brunswick . 5 3 . Energy profile for New Brunswick . 6 3.1 Energy demand . 6 3.2 Electricity in New Brunswick . 7 3.3 Natural gas in New Brunswick. 8 3.4 Petroleum products in New Brunswick . 9 3.5 Energy efficiency in New Brunswick . 9 4 . Energy plan overview . 10 4.1 2001 Energy Plan . 10 4.2 Role of government . 10 4.3 Assumptions . 11 4.4 Energy plan strategy overview . 11 4.5 Objectives of recommendations . 13 4.6 Targets of recommendations . 13 5 . Recommended sector strategies . .15 5.1 Energy efficiency . 15 5.2 Renewable energy . 22 5.3 Transition to renewable electricity sources . 29 5.4. Natural gas. 36 5.5 Petroleum products . 42 5.6 Regulatory matters . 47 5.7 Education and awareness . 52 5.8 Research and development . 54 6 . Closing comments . 56 Appendix A Report on public engagement: engagement activities . .59 Appendix B Report on public engagement: engagement outcomes . .71 Appendix C . .77 Appendix D New Brunswick Energy Commission List of stakeholders . .99 i) Executive summary The Energy Commission was appointed by Premier David Alward in October 2010 and given the mandate to recommend a progressive 10-year energy plan for the province. The 10-year strategy is based on a broad public engagement process that was carried out through the Internet, public meetings, public presentations and meetings with interested parties, utilities and governments. The energy sector in New Brunswick is facing many challenges similar to other jurisdictions with the changing global market for oil, natural gas developments in North America, technology improvements and changing market conditions. Environmental emissions are becoming the major factor in energy planning as renewable sources become cost competitive compared to traditional sources and governments work to determine the strategy for managing carbon. The public engagement process identified objectives for the Energy Commission to use in developing the 10-year plan. The objectives are: • develop a plan for low and stably-priced energy; • ensure the security of energy supplies; • set high standards of reliability in the generation and delivery of electricity; • produce, transmit and distribute energy in an environmentally responsible manner; and • strengthen and expand the role of the independent energy and utility regulator. These objectives were considered in the context of New Brunswick with a population of just over 750,000 aging residents who have average incomes of just over 75 per cent of the national average. The Energy Commission heard clearly from residents that they want reliable, low and stably priced energy. Energy efficiency is seen as the first priority for consumers to manage the energy future. People understand that the lowest-cost energy is the energy they do not use. They also feel energy users should be contributing to the cost of reducing demand by supporting efficiency programs. The engagement process identified the desire of residents to move to renewable sources of energy wherever practical. The transition to a renewable electricity supply would need to be supported by natural gas as the lowest-emissions fossil fuel that has projected cost stability for at least the next 10 years. Use of the existing fleet of generators to reduce their long-term cost was seen as part of the transition to new sources of electricity while protecting jobs. Natural gas was also seen as a potential alternative transportation fuel, an expanded heating source and numerous other applications. New Brunswick has a natural gas supply from a number of sources which could include our own resource and is priced on a regional (North America) approach rather than a global price like oil and has lower emissions. People are looking for flexibility in deciding how they manage their energy future. They want to be able to use new technologies, switch sources of heating fuel, connect to renewable sources of electricity or do what is new. They want to let future generations decide their own direction on energy use. Increased collaboration with neighbouring jurisdictions in a regional approach to energy supply, transmission and environmental reductions was identified as an approach to follow. Regulatory oversight of the energy sector with a full-time, professional board was seen as the approach to take in protecting the interests of New Brunswick energy consumers. Final Report 1 Having trained board members with the expertise to understand the professional working climate of the energy systems in New Brunswick is a necessity. Decisions on rates, long-term spending plans and choice of fuel source for electricity generation are just some of the decisions facing the board on a regular basis. The public’s interest needs to be protected by an Energy Advocate Office that can appear consistently before the board. Regulating the price of petroleum products (gas, diesel, heating oil) was considered a good approach that should continue but people would like more regular information about how the prices are set and what influences the price change. People are also looking for information on energy issues and available options with costs applicable to New Brunswick. They want to be able to find it easily and have it relative to our province and their personal situation. Information does exist in the province with different groups and websites but needs to be coordinated and promoted. New Brunswick has to look at its research and development priorities to direct available resources to address the ability of the province to compete on energy costs and work to reduce our environmental impact. We also need to work to improve the education and training of the workforce to have what is required to operate the emerging technologies and production facilities. Energy contributes emissions through the generation of electricity and the transportation sector. These two sectors are the major contributors to be addressed in our new Climate Change Action Plan for 2012. The movement to more renewable fuels and a more regional approach will assist in reducing our emissions to the levels required to support the national goals. This is a 10-year plan that government needs to address in a practical, focused manner to give the public a clear understanding of where the province is going with energy policy and consumer protection. 2 New Brunswick Energy Commission 1 . Introduction 1.1 Composition and mandate The New Brunswick Energy Commission was established by Premier David Alward on October 15, 2011. The Energy Commission has been tasked with developing recommendations for a progressive 10-year energy plan for New Brunswick. The Energy Commission was established as a result of the recommendations made in “The Path Forward” by Darrell Stephenson and Pierre-Marcel Desjardins. The Path Forward identified many of the challenges facing the New Brunswick energy sector and provided recommendations on approaches to follow. The Energy Commission was given a mandate to look out 10 years and provide a plan for government to use as it commits financial, human and legislative resources to the energy sector. The mandate did not include dealing with current operational issues that are best handled by the Department of Energy. These operational issues would include the refurbishment of the Point Lepreau nuclear plant, the approach to natural gas extraction from shale rock and NB Power structure and debt, which are all under separate review. This report is intended to set the direction that New Brunswick should follow over the next 10 years as it prepares its energy future and not lose sight of where we want to be. The Energy Commission is co-chaired by Jeannot Volpé, former minister of natural resources and energy (1999-2003), and William Thompson, former deputy minister of energy (2003-2006). 1.2 Process The Energy Commission was established with the mandate to engage the residents of New Brunswick in the creation of a 10-year energy plan. Government wanted residents to be involved and aware of what was being considered for the future direction of the province’s energy sector. Numerous steps were taken to engage the public during the course of the six-month process by the Energy Commission. The process included: • Creating a website to give background information on the energy sector as well as to keep residents aware of the feedback it was receiving; • Publishing a document entitled “Consumer Backgrounder on Energy” to give an overview of the province’s current energy situation; • Holding stakeholder meetings; • Conducting Internet surveys; • Conducting public sessions with public presentations, information sessions and “world café” discussion sessions in nine communities; • Producing a Public Feedback Document containing 49 recommendations for the energy plan; and • Receiving public feedback and holding further stakeholder meetings on the Public Feedback Document. The information and direction gained during the consultation process was combined with knowledge gained from research and meeting with experts to produce this report. A more complete description of the public engagement process can be found in Appendix “A.” Final Report 3 2 .