Despite Federal Promises, Atlantic Loop Stands on Shaky Ground for Timely Completion
SAINT JOHN — The Atlantic Loop got a mention as a priority in last month’s federal budget but there are lingering concerns that time is running out to complete this critical piece of net-zero infrastructure by the 2030 deadline.
“The federal government is committed to advancing the Atlantic Loop – a series of interprovincial transmission lines that will provide clean energy between Quebec, New Brunswick, and Nova Scotia – and is currently negotiating with provinces and utilities to identify a clear path to deliver the project by 2030,“ promised Finance Minister Chrystia Freeland in a budget speech, stopping short of attaching a dollar figure or time commitment to the project.
As the 2030 deadline draws closer, the Atlantic Loop, or lack thereof, is proving to be a stumbling block for Atlantic businesses moving forward with their net-zero plans.
Shifting manufacturing or other processes towards clean electricity is a big gamble for businesses, especially when it’s not clear that the infrastructure will be in place to deliver on the promise of net-zero energy.
Just before Easter, Infrastructure Minister Dominic LeBlanc delivered an optimism-heavy, but detail-light, boost to the project. He indicated he was “hopeful” an agreement in principle would be in place by as early as June, following “sensitive commercial conversations” with utilities in Quebec, New Brunswick, and Nova Scotia.
The following day, Nova Scotia Premier Tim Houston countered the remarks by stating that he “was not optimistic about the Atlantic Loop.”
“I’m not investing a lot of time into it until I understand that the federal government is there in a meaningful way to support the ratepayers,” he said.
That sentiment was echoed by Nova Scotia’s Natural Resources and Renewables Minister Tory Rushton who said “without the federal government at the table, assisting with the project, the ratepayers of Nova Scotia cannot afford this.”
The project is expected to take several years to complete and cost tens of billions of dollars.
LeBlanc, in his remarks about the Loop, acknowledged that things have been off to a slow start for this integral piece of infrastructure.
“Time is of the essence and we recognize on our side we can’t cause any delays and we hope that the utilities and the provinces are as committed as we think they are,” he said.
Given the enormity of the task ahead involving coordination between several jurisdictions, public and private utility companies, and navigating supply chain issues, the 2030 goal may already be out of reach.
“Six and a half years to construct a major transmission line to bring clean electricity into Atlantic Canada that would replace the baseload generating facilities that are currently powered by coal, which are required to be off the grid by 2030. We’re talking about a major project,” says Atlantica Centre for Energy president Michelle Robichaud.
“When you look at six and a half years for a major project like that, it’s really like [saying]: tomorrow.”
Robichaud says a project of this magnitude, involving above-ground and undersea transmission lines, will require significant consultations, strong First Nations engagement, and extensive environmental impact studies and the like.
Robichaud says she thinks some of the obstacles holding the project back will be worked through in the months ahead.
“I do believe that the utilities and the provinces and the federal government are working very closely together. I believe that there is a plan that they’re trying to work through. And I think part of the issue with moving forward was resolved with this budget,” she says.
“My position is that time is of the essence. This is a major project, but there’s a lot happening in that energy transition, and it’s happening around the world. We’re all doing this at the same time.”
With everyone working in lockstep, racing toward that 2030 deadline, the resources needed to complete projects like the Atlantic Loop are going to be in high demand.
“If you want to get those transmission lines if you want to get those windmills built, if you want to get those solar panels, your dedicated supply chain pipeline, so to speak, you have to book your contractors, you have to book your cranes, you have to procure shipping routes.”
“There’s a lot that needs to happen.”
Looking back at the budget, there were a couple of items that could support the creation of the Loop from a financial point of view.
“The federal budget’s 15 percent clean electricity investment tax credit (ITC) supports clean electricity generation, storage, and transmission, at a cost of $26 billion over 10 years,” notes Atlantic Provinces Economic Council senior policy analyst Fred Bergman.
“APEC and some media outlets have noted that this tax credit could support investment in the Atlantic Loop because electric utilities would also be eligible for this ITC.”
In addition, the federal government expanded the eligibility for the clean technology tax credit which helps businesses pay for new clean tech in their operations. That credit is growing to $7 billion over five years.
But ultimately, time is up for talk about how to address meeting net zero goals in 2030 and beyond. If Atlantic Canada is going to come close to meeting these ambitious targets, the time to act is now.
Robichaud says vision and leadership are needed to light the path ahead.
“I think what’s missing from a lot of this conversation is that Atlantic Canada needs a powerful, strategic, clear energy plan that enables our communities to prosper as we move towards these more carbon neutral goals…and energy systems.”
Alex Graham is a Huddle reporter in Saint John. Send her your feedback and story ideas: [email protected].