Nova Scotia and Ottawa reach deal on coal plants

Nova Scotia and the federal government have reached an agreement in principle that will allow the province to keep its coal-fired electricity plants open beyond a 2030 federal deadline to end coal-fired electricity.

But the province will be required to achieve deeper emission reductions to meet the equivalent of closing all the plants by 2030.That means reducing 4.5 megatonnes of CO2 emissions after 2030.

There is no timetable yet for when the plants will actually have to close.

Provincial officials said the agreement in principle is recognition by the federal government that Nova Scotia has already achieved greenhouse gas emissions targets by adopting expensive renewable energy like wind power.

"This is a win-win for Nova Scotia," Premier Stephen McNeil said Mondayin announcing the deal.

Cap-and-trade

McNeil has argued carbon pricing is already embedded in higher power rates because of the use of renewables.

The province saidit will also create its own cap-and-trade system for polluters outside the electricity sector, primarily liquid fuel distributors.

Provincial officials said they wereunable to provide the economic impact of either the new equivalency agreement or a cap-and-trade system.Regulations have yet to be developed.

Welcomed outcome

The province will establish a cap with emitters and create an equivalency agreement by 2018.

The outcome was welcomedMondayby the operator of the province's four coal-fired plants.

"We need to understand more of the detail, but from what we know today this recognizes the investment customers have made in renewables, and getting off carbon. The most investment made anywhere in the country," said Sasha Irving, a spokeswoman for Nova Scotia Power.

The new equivalency agreement will replace the original deal signed in 2014 by the Harper government with Nova Scotia.

• Nova Scotia environment minister hopes Harper-era emissions deal stays