Nova Scotia Power Inc. 2020 Integrated Resource Plan DRAFT REPORT October 30, 2020 Table of Contents 1 IRP Summary .......................................................................................... 1 1.1 Introduction ............................................................................................. 1 1.2 Nova Scotia Power’s System Transformation ................................. 1 1.3 Evolving Planning Landscape ............................................................ 4 1.4 Planning Objectives .............................................................................. 5 1.5 The IRP Planning Process .................................................................. 6 1.6 Exploring a Diverse Set of Scenarios ............................................... 8 1.7 Developing Optimal Resource Plans .............................................. 11 1.8 Overview of Key Findings .................................................................. 14 1.9 Overview of Action Plan and Roadmap .......................................... 23 1.10 Going Forward ..................................................................................... 27 2 IRP Introduction and Process............................................................. 28 2.1 Nova Scotia Power’s Mission ........................................................... 28 2.2 Objectives of the IRP.......................................................................... 28 2.3 Process for the IRP ............................................................................ 30 2.4 Advancements in the IRP Approach ............................................... 33 2.5 Role of the IRP Working Group........................................................ 36 2.6 Stakeholder Consultation and Public Process .............................. 37 3 Meeting Future Objectives .................................................................. 39 3.1 Ensuring Reliability ............................................................................. 39 3.1.1 Planning Reserve Margin (PRM) ..................................... 40 3.1.2 Effective Load Carrying Capability .................................. 42 3.1.3 Ancillary grid services and Variable Renewable Energy Integration ............................................................................ 44 3.2 Maintaining Affordability ..................................................................... 48 3.3 Supplying Clean Energy .................................................................... 49 3.3.1 Air Emission Legislation and Regulation ........................ 50 3.3.2 Renewable Electricity Standards ..................................... 53 3.3.3 Coal Phase-Out Regulations ............................................ 54 3.3.4 Modeling of GHG Emissions and Coal Unit Retirements ................................................................................................ 55 3.3.5 Maritime Link ....................................................................... 56 3.3.6 Economy-Wide Decarbonization ..................................... 57 4 Loads and Resources .......................................................................... 60 4.1 Load Forecast ...................................................................................... 60 4.1.1 Base Load Forecast ........................................................... 61 4.1.2 Electrification ....................................................................... 63 4.1.3 Demand Side Management .............................................. 65 4.1.4 Distributed Energy Resources ......................................... 66 4.1.5 COVID-19 Impacts ............................................................. 67 4.2 Existing Resources ............................................................................. 67 4.2.1 Overview .............................................................................. 67 4.2.2 Resource Screening .......................................................... 69 4.3 Future Supply Options ....................................................................... 73 4.3.1 Renewable Resources ...................................................... 75 4.3.2 Energy Storage Resources .............................................. 78 4.3.3 Thermal Resources ............................................................ 80 4.4 Future Demand Options .................................................................... 82 4.5 Regional Integration ........................................................................... 84 4.5.1 Existing Transmission Interconnections ......................... 84 4.5.2 Transmission Expansion Options .................................... 86 4.5.3 Characteristics of Imported Energy and Capacity ........ 87 4.6 Resource Strategies ........................................................................... 88 5 Scenarios, Methodology, and Evaluation Framework .................... 91 5.1 Key Scenarios...................................................................................... 91 5.2 Sensitivity Analysis ............................................................................. 93 5.2.1 Demand Side Management .............................................. 94 5.2.2 Wind ...................................................................................... 94 5.2.3 Mersey Hydro ...................................................................... 95 5.2.4 Imports .................................................................................. 95 5.2.5 Sustaining Capital ............................................................... 95 5.2.6 Gas and Import Prices ....................................................... 96 5.3 Methodology ........................................................................................ 96 5.3.1 Developing Resource Portfolios ...................................... 96 5.3.2 Assessing Reliability .......................................................... 97 5.3.3 Assessing Operability ........................................................ 97 5.3.4 Assessing Relative Rate Impacts .................................... 98 5.4 Evaluation of Resource Portfolios .................................................. 100 6 Modeling Results ................................................................................ 102 6.1 Resource Additions and Retirements ........................................... 103 6.2 Energy Mix ......................................................................................... 107 6.3 Greenhouse Gas Emissions ........................................................... 109 6.4 Resource Plan Cost.......................................................................... 110 6.5 Relative Rate Impacts ...................................................................... 111 6.6 Reliability ............................................................................................ 113 6.7 Operability .......................................................................................... 115 6.8 Sensitivity Analysis ........................................................................... 115 6.8.1 DSM Levels ....................................................................... 116 6.8.2 Wind .................................................................................... 117 6.8.3 Mersey System ................................................................. 118 6.8.4 Imports ................................................................................ 119 6.8.5 Sustaining Capital ............................................................. 120 6.8.6 Gas and Import Prices ..................................................... 121 7 Key Findings, Action Plan, and Roadmap ...................................... 123 7.1 Key Findings ...................................................................................... 123 7.2 Action Plan ......................................................................................... 131 7.3 Roadmap ............................................................................................ 133 Appendices ................................................................................................. 136 IRP Summary 1 IRP Summary 1.1 Introduction In the 2020 Integrated Resource Plan (IRP), Nova Scotia Power puts forward a long-term strategy for delivering safe, reliable, affordable and clean electricity to customers across Nova Scotia. At its core, the plan illustrates Nova Scotia Power’s commitment to supporting provincial decarbonization as outlined in the Nova Scotia Sustainable Development Goals Act (SDGA), both by transitioning to a cleaner electricity grid and by enabling electrification of other sectors, such as transportation and heating. Given the unprecedented nature of these initiatives, as well as the increasingly dynamic and complex resource planning environment, Nova Scotia Power incorporated extensive stakeholder engagement, including input from nine public workshops, six rounds of formal submissions from stakeholders, independent expert analyses, and ongoing consultation with participants. This engagement generated critical insights at each stage of the IRP process. Supported by this collaborative effort, Nova Scotia Power produced a set of resource plans to explore a broad range of potential futures and provide insights on trade-offs between these approaches. As detailed in the Action Plan, Nova Scotia Power has identified common themes and no-regrets actions that can