As world leaders from 196 countries gathered in Paris and ironed out a first-of-its-kind multilateral treaty on climate change, the Nova Scotia Legislature on 11 December 2015, by passing the Marine Renewable Energy Act- Bill No. 110 (the “Act”), signalled its own commitment and intent on the leadership role it wishes to play in not only reducing the Province’s GHG foot-print, but to also develop the use of technologies that maximize the vast alternative and renewable energy resources of the region. The legislation now awaits Royal Assent which is expected in January 2016.

Marine Renewable Energy Strategy

The legislation is the culmination of a public and industry consultation process initiated by the Province in 2007 which was led by Dr. Robert Fournier of Dalhousie University. Based on Dr. Fournier’s recommendations the Province developed a Marine Renewable Energy Strategy (the “Strategy”). The Strategy identified that marine environment is a shared resource supporting multiple industries and interests and involving multiple federal and provincial regulatory authorities. Until now, the tidal energy activities, which are primarily being carried out by the Fundy Ocean Research Center for Energy (FORCE), were being coordinated by means of an informal standing committee and were regulated under direct agreements between the Province and FORCE. The Strategy, however, recommended establishment of a customized regulatory regime for commercial development of the industry, which not only provides an integrated regulatory system protecting the public interest, but is also suitable to the evolving trends and technologies involved in this sector. The Act represents the implementation of the Strategy and provides a comprehensive regulatory framework to the marine renewable energy industry with a particular focus on in-stream tidal, as well as, tidal range, waves, ocean currents and offshore wind technologies.

Priority Areas

The Act identifies two areas of “priority” in the Province located in the Bay of Fundy and Cape Breton Island’s Bras d’Or Lakes, with provisions specifically ensuring that marine renewable energy projects are only undertaken in the “priority” areas under a permit or licence issued by the Minister of Energy. The Act also allows the Province to identify and designate certain areas within the two priority areas as “Marine Renewable-Electricity Areas” (“MREA”). The purpose is to earmark MREAs as areas for developing particular projects and to allow the Province to design specific regulations for such marine renewable energy projects. The Act itself identifies four areas as MREAs specifically for in-stream tidal projects. These include areas near Black Rock-Bay of Fundy, Digby Gut, Grand Passage and Petit Passage. The Act allows the Province to identify further priority areas and MREAs, though extensive research and consultation measures must be undertaken prior to such designation.

Licensing and Permitting Regime

One of the most important features of the Act is the licensing and permitting regime governing the marine renewable energy projects that are undertaken within the priority areas and MREAs. The Act requires that a licence or permit from the Minister must be obtained prior to installing, constructing and operating any generator which generates electricity from marine resources, as well as, for constructing and operating any related installations. The Minister has the authority to determine the areas subject to the issuance of licenses and the terms and conditions of such licences; to initiate a call for applications; and to issue license to a successful applicant. However, what is of particular significance is that the Act provides that any licence issued must contain terms focused on environmental protection, such as terms requiring the licence holder to comply with an approved environmental monitoring plan and requiring rehabilitation of licence areas upon decommissioning.  The regulatory regime caters to both the private industry and research organizations working in the marine renewable energy sector and allows for issuance of permits to entities interested in testing generators and other related installations.

The Regulatory Environment

The Act is pioneering legislation focused on the marine renewable energy industry and has the potential to provide a balanced regulatory environment addressing a variety of issues covering the entire spectrum of regulation including, licensing, data collection, environmental protection, cross-ministerial consultation, community engagement and revenue generation. The Act delegates considerable allowance and scope to the Province in making regulations to accomplish the purposes of the Act, perhaps signifying a recognition of the potential challenges that the Province will face in regulating such a novel industry.

According to a recent study commissioned by the Offshore Energy Research Association of Nova Scotia, the tidal energy industry has the potential to contribute up to $1.7 billion to Nova Scotia’s gross domestic product (GDP), create up to 880 jobs and generate as much as $815 million in labour income. In the short term, however, the Act provides the industry, researchers, innovators, and the public with a foundation on which Nova Scotians can develop a sustainable carbon neutral marine renewable energy industry.