Emera Inc. executives remained upbeat on the opportunity offered by the Atlantic Loop transmission project and the broader Eastern Canada clean energy initiative and expect to provide more clarity by early 2022.
The Nova Scotia-headquartered company views the initiative as a significant opportunity to facilitate its transition off coal at an accelerated pace, amid newly proposed climate commitments in the province. Commitments in legislation proposed in late October include the retirement of coal generation assets and the supply of 80% renewable energy by 2030.
"Meeting these targets will require incremental investment in cleaner energy solutions, storage and transmission as well as alignment between regional utilities and provincial and federal policymakers," Emera CEO Scott Balfour said during the company's third-quarter earnings call Nov. 10.
The clean energy initiative includes investments in renewable sources, particularly wind and battery storage, as well as transmission infrastructure to replace coal-fired energy. "[T]he idea of this project [is] around looking to optimize the energy resources that exist in our neighboring provinces to help Nova Scotia and New Brunswick, frankly, both to decarbonize," Balfour said. "A lot of this is around the effort to do it on a basis that doesn't sacrifice affordability for customers."
The Atlantic Loop project, a component of the initiative, would link power grids in the Maritime provinces with Quebec. Executives previously said completing the Atlantic Loop project by 2030 would allow Emera's Nova Scotia Power Inc. utility to accelerate the retirement of its coal-fired generators from the government-mandated out-of-service date of 2040.
Emera is in advanced discussions with stakeholders on the next steps for the Atlantic Loop project, but executives acknowledged the current challenge of setting roles the participating parties will play.
"We've just been hesitant to lock in and set expectations around what it means from a capital cost perspective that's relevant for Nova Scotia Power," CFO Gregory Blunden said. "I do know there's a number out in the media of roughly a [C$5] billion project and order of magnitude, that's obviously about right. But looking as to what the component part of that is for Nova Scotia Power, and therefore, the capex and investment profile for Nova Scotia Power and Emera. It's just — it's still too soon to look at those numbers."
Asked about contingency plans, Emera executives told analysts that could include building more gas generation capacity to backstop more wind or creating more transmission capacity.
"I think our preferred plan, which includes the Atlantic Loop, really is the preferred option from a customer affordability perspective from an achievability perspective and from a reliability perspective," Nova Scotia Power President and CEO Peter Gregg said.
Emera aims for net-zero greenhouse gas emissions by 2050.
Separately, Emera reported third-quarter adjusted net income of C$175 million, or 68 Canadian cents per share, up from C$166 million, or 67 cents per share, a year earlier. The S&P Capital IQ consensus estimate for normalized earnings for the third quarter was 66 cents per share.
