Nova Scotia has a $60-billion offshore wind vision to develop enough offshore wind capacity to meet up to 27 per cent of Canada’s electricity demand. The plan is huge in scope: 66 gigawatts (GW) of installed offshore wind turbines, with a dependable output of 40 GW, an unprecedented scale in Canadian energy history. Called West Wind, Premier Tim Houston in June unveiled the megaproject, which is aligned with Prime Minister Mark Carney’s national energy ambition to make Canada a clean energy superpower. Three months later, Carney announced a slate of “nation-building” infrastructure projects the federal government would fast-track, and while Wind West wasn’t on the initial list, it was included in a second tier of high-potential proposals requiring more development before approval. Despite the ambitious vision, significant challenges loom. Turbines won’t be in the water for years, and some industry players say this is the most difficult time in more than a decade to launch new offshore wind projects, both politically and financially, and not just in Canada. For example, the Donald Trump administration has halted new offshore wind leasing in the United States, rescinded designated wind energy areas and paused construction on major projects, while Europe — long the global leader in offshore wind — is facing its own challenges, such as skyrocketing costs, failed auctions and mounting investor anxiety. Closer to home, Nova Scotia’s biggest challenge may be finding buyers for its electricity. With limited local demand, the province must sell into larger markets — Ontario, Quebec and New England — requiring the construction of massive transmission infrastructure, which currently doesn’t exist. Still, advocates believe Wind West could play a transformative role in Canada’s energy transition. Power demand is rapidly rising across North America, and they say offshore wind — alongside solar — is critical to meeting future needs. The question now, they say, is not if, but at what scale and when? Wind West is far more ambitious than Houston’s earlier 2022 goal of leasing 5 GW of offshore wind capacity by 2030, but its first step turned out to be quite modest. Last week, the federal and Nova Scotia governments issued a notice of strategic direction to the Canada–Nova Scotia Offshore Energy Regulator (CNSOER) that outlined how to proceed, with the first call for bids expected sometime late this year. The notice instructs CNSOER to begin a prequalification process and a call for information to inform the design and implementation of the upcoming bidding process. The surprise? The initial round is for just 3 GW, not the 5 GW envisioned for the first phase of the original strategic plan. Peter Nicholson, chair of the Canadian Climate Institute and author of Catching the Wind: How Atlantic Canada Can Become an Energy Superpower, believes Wind West could place Nova Scotia at the heart of the national energy strategy if it’s treated as a national priority. “It’s very well understood where the world is headed,” he said. “We’re moving toward an electrical future that’s cleanly generated for economic, environmental, and security reasons. But for that to happen, the economics have to work.” That’s a sore spot for Trump, who once again poked fun at wind at the United Nations last week, saying that European countries were headed to financial ruin in part because they’re replacing oil, gas and “beautiful, clean coal” with unreliable, expensive windmills. Nicholson, who gave Elon Musk his first job in banking at the Bank of Nova Scotia in Toronto, said offshore wind has a cost curve that still offers room for improvement, unlike mature sources such as hydro or gas. “There is still room for technological improvement where there is very little in hydro, gas and coal fire technology,” he said. Nicholson said West Wind’s official designation as a nation-building project, should it come to pass, could shift how major utilities — especially in Ontario and Quebec — engage with Nova Scotia. “It’s not that utilities don’t talk to each other,” he said. “But when you’re thinking strategically — 10, 20 years out — they’re not currently planning around offshore wind. Being designated could change that. It gets you a seat at the table.” Such a designation could also unlock practical benefits such as federal help with regulation, investment tax credits and low-cost financing through the Canada Infrastructure Bank . Still, not everyone is convinced. An executive at a Canadian energy company — who asked not to be named because he’s not authorized to speak publicly — said the timing for Wind West is deeply problematic, thanks in large part to Trump’s attack on renewable energy. “Right now is probably the worst time in 15 years to launch a project like this,” he said. He pointed to recent events such as a failed wind auction in France this month drawing zero bids despite nine qualified companies; Germany’s auction in May was also unsuccessful; and the Netherlands cancelled an auction entirely. “Governments set unrealistic expectations,” he said. He said there was a huge rush during COVID-19 and after the Russian invasion of Ukraine when countries threw public money at alternatives to gas. Offshore wind costs fell steadily from 2010 to 2021, he said, but the cost since then has risen by about 40 per cent, largely due to a surging demand, supply chain constraints, rising commodity prices and higher capital costs. Even industry giant Ørsted A/S is struggling. Its stock has fallen by approximately 85 per cent from its peak in January 2021 and by more than 40 per cent this year. “It’s not Nova Scotia’s fault,” the executive said. “It’s just really bad timing.” Despite political alignment between the federal and Nova Scotia governments, market access remains the single greatest barrier. “The biggest problem here is transmission,” he said. “You can’t build the wind and hope the lines come later. You have to build both — together.” Of the $60-billion Wind West budget, $40 billion is for generation and $20 billion is for transmission; both are massive sums that require long-term federal–provincial coordination, private capital and regulatory clarity. “You can have a world-class wind resource, and you can have federal support,” the exec said. “But until the transmission question is solved, this project won’t reach its full potential.” Without government support such as tax credits and low-cost borrowing, the cost of offshore wind energy in Nova Scotia is projected to be $240 per megawatt-hour, but it could decrease to an estimated $170 per megawatt-hour if those measures were implemented. The province said it would expect a four per cent royalty from offshore production and Houston said he’s in discussion with Carney about securing federal investment tax credits and low-interest financing through the Canada Infrastructure Bank. Separate from the megaproject’s estimated $60-billion price tag is the investment in infrastructure to support it. That includes serious upgrades to ports, infilling and dredging the seafloor. Preparing ports to support the transport and handling of large components for offshore wind construction and maintenance could take anywhere from 21 months to more than nine years, according to a report this month from Net Zero Atlantic, a non-profit renewable energy research group headquartered in Halifax. The estimated cost ranges between $135 million and $654 million. Alisdair McLean, chief executive of Net Zero Atlantic, said building an offshore wind industry comes with massive costs and the potential payoff may still be decades away, but the technology is already proven and Nova Scotia has many of the key ingredients to make it work, including a world-class wind resource and a promising market in the Northeastern U.S. He believes success will heavily depend on whether governments act strategically to attract major players. “We need to understand the scale of the opportunity and the distance to market,” he said. “From a research and development perspective, we’re not trying to invent something new. The technology already exists and that matters.” McLean said such projects need major capital since even building just a transmission line will require a lot of money, never mind the offshore wind turbines. “But the private sector is interested in investing in this technology,” he said. “If governments are skillful, they can help draw that investment in.” Net Zero Atlantic is currently working on a report that will assess the Atlantic Canadian electricity grid and the investments required to support offshore wind energy. Engineering firm Stantec Inc. is leading the research as principal investigator. One of the projects already in the pipeline is NovaEast Wind, which plans to deploy a bunch of floating wind turbines on the French Bank, with a capacity of 300 to 400 megawatts. The project is a joint venture between DP Energy Ireland Ltd. and SBM Offshore NV, two companies with extensive experience in renewable energy and offshore construction. NovaEast has also signed a memorandum of understanding with the Assembly of Nova Scotia Mi’kmaw Chiefs to ensure Indigenous involvement and environmental responsibility. Gerry Sheehan, NovaEast’s project director, said the company has been steadily working for more than three years to advance its plans. “We’ve progressed our vision, we’ve done the community engagement, and now we’re patiently waiting for the actual call for bids and — ultimately — seabed rights,” he said. “That’s what we need to unlock the opportunity. We saw this as attractive years ago, long before others did.” Sheehan said everyone’s interested in timelines and whether others will enter the race. “Now that we’re seeing the details in the call for information — the prequalification criteria — we’ll have to see how the industry responds,” he said. “It has to be sustainable, and it has to move at a responsible pace.” From the international perspective, Philipp Tremer, project manager at the non-profit German Offshore Wind Energy Foundation, said Nova Scotia has strong potential to establish a solid offshore wind industry, citing the province’s offshore oil experience, excellent wind resource and meaningful interest from the federal government as key advantages. “There’s a point where you just have to start,” he said. Tremer said even Germany, a global leader in the wind energy sector, is facing serious challenges today and must reconsider how it regulates the industry. Germany currently has about 9 GW of offshore wind capacity installed, with a target of 30 GW by 2030. By comparison, Houston is aiming for 5 GW by 2033 and 15 GW by 2040. Nova Scotia’s energy demand currently peaks at only around 2.4 GW. “The offshore industry is under a lot of pressure right now,” Tremer said. “Prices are high and unpredictable. There’s a shortage of skilled workers and not enough of the specialized ships needed to install large turbines.” He said every offshore wind project carries major risks since you’re looking at billion-dollar projects with lead times of 10 years or more. “You invest now, and you might only see a return a decade later,” he said. “That’s a major barrier for the industry.” Tremer said a reliable regulatory framework is crucial. He recalls a moment in 2014 when the German government reduced its offshore wind targets to 15 GW from 25 GW in a shift that led to widespread uncertainty, the loss of skilled workers and delays that the industry is still trying to recover from. Trump's war on wind seen blowing investors towards Canadian megaprojectOttawa eyes mega offshore wind project in Nova Scotia “Targets need to stay in place. The industry needs certainty about what’s coming next. Companies aren’t going to invest billions for a single gigawatt of capacity. You have to build it up step by step. That includes a regulatory framework that’s stable and ambitious targets that stay in place,” he said. “And you need subsidies. I don’t know of any offshore wind market that succeeded without them. That’s something governments need to be very clear about. That’s where it starts.” • Email: arankin@postmedia.com