The Nova Scotia Co-operative Council sees the development of renewable energy as one of Nova Scotia’s greatest opportunities. Nova Scotia is a region that has an abundance of natural resources. During the age of sail, Nova Scotia used its natural resources to become a wealthy colony and a major trading partner to the world. This period of prosperity was followed by a period of economic decline that was characterised by the export of unprocessed goods, loss of local ownership, and investment money flowing out of the region.
Today, Nova Scotia has the potential to harness its abundance of natural resources to bring economic and environmental sustainably to the province by producing renewable energy for consumption and export. This opportunity is pivotal in that it has the potential to simultaneously improve the economy, the environment, and the health of Nova Scotians.
The co-operative sector is a natural model for the development of the alternative energy sector. There is a long history of co-operatives developing business infrastructure and social infrastructure throughout rural Nova Scotia. The reason for many co-ops to become established was the need to provide competition to monopolies in the processing and grocery sectors in isolated communities. In recent years co-ops have become more diverse as one way of meeting the needs of Nova Scotians. Currently co-ops provide products and services in sectors as diverse as agricultural processing plants, water utilities, farmers markets, rural airports, investment co-operatives and many other sectors of the economy.
Around the world co-operatives have often provided the mechanism whereby new industries can become established in sectors with limited Venture Capital sources and limited traditional financial support. Co-ops have the ability to harness the collective intellect, business acumen, and financial resources of a community to create a sustainable business that has both economic spinoff and social benefits in a community. This collaborative, community-building attitude can be harnessed to see the alternative energy sector flourish in Nova Scotia.
The Nova Scotia Co-operative Council believes that the opportunities around renewable energy are much broader than just electricity generation. All forms of renewable energy including electricity generation, space heating and transportation fuels need to be considered. By taking this broader view of energy, we will achieve the greatest reduction in greenhouse gases as well as strong economic growth without excessive costs to individuals, businesses, communities and government.
The Resource
Nova Scotia’s resources that can be harnessed to produce renewable energy are almost infinite. Some of these resources include:
- Hydro
- Small hydroelectric dams
- Wave energy
- In-stream generation
- Wind
- Solar
- Tidal
- Biomass
- Forestry by-products
- Agricultural grasses
- Other agricultural residues
- Biogas
- Municipal waste treatment plants
- Methane from landfills
- Agricultural biogas operations (manure or silage based)
- Biodiesel
- Rendering plants, used vegetable oil
- Oilseed crushing plants
- Algae
- Ethanol
- Cellulosic ethanol from wood chips or agricultural by-products
- Grain-based ethanol
- Sugar beets
Currently the technology to produce energy from many of these resources is commercially available. Other opportunities such as cellulosic ethanol require more research and development before it can be developed on an affordable level.
The Policy Environment
An environment of supportive and consistent government policy is critical in order for emerging industries such as alternative energy to become widely adopted. When government policies are clearly articulated and incentives are provided to develop renewable energy resources, then the entrepreneurial spirit of residents will be harnessed and strengthened to pursue these initiatives.
Within the past few years, the government of Nova Scotia has put in place a number of policies to encourage renewable energy, with a primary focus on electricity generation. In 2007, the Environmental Goals and Sustainable Prosperity Act was proclaimed. This Act outlines 21 specific goals for the province to achieve by 2020 or earlier. These goals include reduced air emissions and waste, new energy standards for buildings and sustainable purchasing by government.
In December 2009, Dr. Michelle Adams and Dr. David Wheeler released the ‘Stakeholder Consultation Process for: A New Renewable Energy Strategy for Nova Scotia.” This report was primarily focused on the government’s goal of producing 25 percent of electricity from renewable resources by 2015.
Many of the recommendations in this report were centered around mechanisms to facilitate the growth of the renewable sector. This included recommendations around Community Feed In Tariffs, consistency in planning guidelines and by-laws (both municipal and provincial), guidelines for the forestry sector on allowable levels of biomass harvesting, etc. This renewable energy strategy has set short timelines for the various government departments to develop their various strategies and policies to meet the goals of the report. While this report is geared towards electricity generation, it is hoped that the recommendations will be applied to the broader energy picture. This will provide the clarity for community-based investments to take place.
The Co-operative Connection
According to the
Statement on Co-operative Identity, co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity, and solidarity. If a community develops renewable energy resources, it can meet many community needs. These include providing jobs for the unemployed, reducing greenhouse gases, supporting the natural resource sectors, providing reliable sources of fuel and electricity, and providing other sources of income for the community.
A co-operative provides a structure where a community can take on and develop a project that no one individual can develop on his or her own. This self-help makes a community stronger, rather than waiting and hoping for government to solve their problems. By taking responsibility for their future, the community becomes engaged and can see how their efforts have been instrumental in creating a better future for themselves, their families, and their community.
The Nova Scotia Co-operative Council has a team of development officers located around the province. The role of the business development officers is to assist new co-ops to become established as well as assist established co-ops thrive and grow. For more information on the services offered by the Council’s Business Development Unit see
Could Your Co-operative Use Some Help?
The role of the Council is to be a supportive player in your co-operative endeavour. However, for any project to be successful and sustainable, the initiative and leadership must come from the community.
Financing for Alternative Energy Projects
When a community group has researched the opportunities available in the alternative energy field and have completed a business plan, they may decide to start a co-operative for the benefit of the members. Many of these business ventures will require significant financial commitment to proceed. There are several source of financing available. The most important part is member equity. If the project proponents and community members are unwilling to contribute to the project, then financial institutions and government will be unlikely to support the project.
In Nova Scotia (and PEI) there is a program called the Community Economic Development Investment Fund (CEDIF). This is a pool of capital raised through the sale of shares that is invested in new or existing local businesses. When a co-operative sets up a CEDIF offering, community investors receive a 35 percent tax credit against their provincial income tax. The investment can also be held within a self-directed RRSP, which qualifies the investor for RRSP tax credits in addition to the provincial tax credit. For more information see the
Department of Economic and Rural Development’s website.
By receiving tax credits, this program minimizes individuals risk in investing in their own community. This increases the number of investors who will invest in a CEDIF offering and increases the potential equity that can be raised.
Another way for a co-op to raise equity is through the issuance of preference shares. In February 2009, legislation was proclaimed in Nova Scotia that allows co-operatives to issue preference shares. This is another vehicle whereby a co-op can raise additional equity from the community.
Once the CEDIF has raised a significant pool of equity, it can approach a credit union or other financial institution for debt financing. Some of the significant factors that affect the likelihood of receiving debt financing include:
- The credibility and business experience of the board of directors
- The amount (percentage) of equity in the project
- The quality of the business plan that is presented
- The certainty of the revenue stream
- The policy environment that the project operates within
It is anticipated that in the upcoming months there will be more detail and clarity as policies are further developed to advance the adoption of renewable energy. Well thought out strategies have the potential to make investments in renewable energy more attractive, bring more certainty to business revenue projections, and increase the interest in community led projects.
Summary
In conclusion, the opportunities that renewable energy presents are significant. Increasing production of energy (electric, transportation fuels, and space heating) in a decentralized way will add to economic growth throughout Nova Scotia. This has the potential to revitalize our agricultural, forestry, marine, and manufacturing industries. This in turn will result in increased employment, stronger small towns and rural areas and an improved quality of life for our citizens.
For further information on the Council’s renewable energy initiative, please contact our
business development team.
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