Beware the Tides of March and September.

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2 Beware the Tides of March and September. Wednesday, September 23, 2015, 10:20 AM - A full moon. A perigee moon. The fall equinox. All joining forces to bring thehighest tides on Earth to Canada's own shores. Though each phenomenon is, in its way, related to the sky, they all reach down to Earth to alter that most predictable of natural forces. But in the lead-up to next week, coastal dwellers are in for a rarity: A convergence of all of these cosmic happenings, that coincides with the apex of an 18-year cycle that will make for the highest global tides in almost two decades, peaking on Tuesday, September 29.

3 Cumberland Energy Authority 1st Annual Energy Symposium Tidal Energy in Nova Scotia: Building the Opportunity PRESENTED BY DANA MORIN- DIRECTOR OF BUSINESS DEVELOPMENT SEPTEMBER 25, 2015 PARRSBORO LEGION, PARRSBORO, NOVA SCOTIA

4 Personal Introduction Founding President- Fundy Tidal Inc.(Fundy Tidal) Co-Chair- Fundy Energy Research Network (FERN) SocioEconomic SubCommittee Secretary/Treasurer- Marine Renewables Canada Founding president of 6 Community Economic Development Investment Funds (CEDIFs) collectively referred to as The Scotian WindFields

5 Fundy Tidal Inc. Introduction A Marine Renewable Energy Development company based in Digby County, Nova Scotia comprised of community shareholders, local businesses and most recently, a minority interest from International Marine Energy. Founded in 2006 on Brier Island, the company vision remains that of community ownership, management and maximizing socioeconomic opportunities to local communities and businesses Fundy Tidal is a Community Economic Development Corporation and eligible Community Feed-In Tariff (COMFIT) proponent Awarded 5 small-scale COMFITs totalling 3.55 MW to generate electricity for sale to Nova Scotia Power

6 WHAT ARE THE POTENTIAL DIRECT & INDIRECT BENEFITS? HOW DO WE PROACTIVELY LEVERAGE THE OPPORTUNITY? HOW DO WE KEEP THE BENEFITS LOCAL?

7 Nova Scotia Tidal Resource Potential Location Typical Mean speed (m/s) Minas Channel Petit Passage Provincial policy seeks 300MW in the years ahead. Dr. Richard Karsten 2013 Grand Passage Digby Gut Great Bras d'or Channel Barra Strait Karsten and Hay (2012)

8 Fundy Tidal Digby County Project Locations Community Feed-in Tariff (COMFIT) projects kw in Grand Passage - 500kW in Petit Passage MW in Digby Gut ~ $35 million budget Project size limited not by resource potential but by grid limitations and local electricity consumption needs

9 Feed-in Tariffs Feed-in tariffs for tidal energy projects include: small-scale tidal COMFIT (distribution grid) Developmental Tidal Array FITs (transmission grid) 3.55 MW of small-scale tidal Community Feed-in Tariffs (COMFIT) awarded to Fundy Tidal Inc MW of Developmental FITs awarded to Fundy Ocean Research Centre for Energy (FORCE) berth holders in 2015 ~ $175 million over next 2-3 years

10 About COMFIT Established in 2010 to provide a guaranteed rate for community renewable electricity projects and meet renewable electricity targets of the province 100MW in total for small and large wind projects, biomass and tidal projects connected to the distribution system Power sold to NSPI for a 20-year term Eligible Proponents are Universities, First Nations, Community Economic Development Investment Funds (CEDIFs), Municipalities & non- profit groups Majority control of the project must reside with eligible proponent

11 Small-scale tidal COMFIT Devices (not projects) up to 500 kw in size. Connected to distribution system. Based on a cost of $10.2 million per megawatt installed Fundy Tidal is an eligible proponent through status as a Community Economic Development Corporation or CEDIF (NS investors) Must retain a minimum of 20% project ownership Purchased by NSPI at a Rate of 65.2 cents per kwh for 20 years Rate assumption of a 15% ROI. Rate assumes no debt MW in total awarded. hour

12 Demystifying small-scale Community Tidal Energy Who owns and benefits from the project is the only distinguishing characteristic. The projects are smaller because the distribution grid capacity to receive new generation is limited. The conditions, technologies, expertise, challenges, supply chain, researchers and players are the same as at FORCE The business of renewable energy development and finance is not new! Large capital costs require large equity and debt contributions. Dealing with millions of dollars is serious business. Securing debt for projects requires a high level of guarantees and assurances and/or demonstrated performance and detailed actual costs

13 Digby Gut Overview MW in 2 phases - Moderate flow speeds - Preferred turbine berth site selected - Nearing end of preliminary design - Current design consists of 16 x 125 kw (approx.) Tocardo T200 turbines on 4 floating platforms - Finalizing Interconnection with NSPI - Engaging Regulators

14 Petit & Grand Passage Overview kW COMFIT approvals - Continuing to assess appropriate technologies - Hub of R&D Activity - Extensive Site & Resource Assessment - Grid limitations a key factor; replacement of existing wind turbine or storage solution required - Strong Currents and conditions require more robust solutions

15 Fundy Tidal Timeline 2015: Complete engineering & design, environmental monitoring plan, regulatory and financing 2016: Target of a minimum of one system installed with Environmental Monitoring Program & System active : All COMFIT Projects Operating in Digby County 2017 onwards: Ongoing R&D, Testing & Demonstration; Expansion if grid limitations are overcome or as local electricity demand increases over time

16 Current Activities Financial Engineering Legal Project Structure & Capitalization Project Budget, Cash-flow & Projections Performance Guarantees & Warranties Engineer, Procurement and Construction Contracts Insurances Project Engineering Marine Mammal Observation Site Characterization & Resource Assessment Micrositing Acoustics Mooring & Platform Design Stakeholder Engagement Interconnection to NSPI grid Regulatory

17 In the short term 3 MW of small-scale tidal developments in Digby County (~$35 million) ~17.5 MW of large-scale developments at FORCE (~$125 million) Ongoing O&M ( years) Undetermined amount of R&D funding, infrastructure funding, etc.. How much will be spent locally? How many new jobs will be created? How many jobs will be retained or expanded? Where will the project benefits accrue?

18 For the long term Over the next twenty-five years, the tidal energy industry could contribute up to $1.7 billion to Nova Scotia s gross domestic product (GDP), create up to 22,000 full time positions and generate as much as $815 million in labour income, according to the study. These impacts are largely concentrated in Nova Scotia with spill-over effects in the Atlantic Region and elsewhere in Canada. (Value Proposition for Tidal Power Development)

19 The Impetus Between 2000 & 2005, The Province of Nova Scotia witnessed the rise of both the CEDIF Program and community energy initiatives including the network of companies referred to as the Scotian WindFields. Digby County proponents the first to establish a CEDIF and erect a wind turbine Meanwhile on Brier & Long Islands, Digby County, Nova Scotia a small but formidable group were addressing a Challlege.

20 The Challenge A core group of local community and business leaders ponder the challenge of stimulating the local economy severely impacted by the decline of the fishery and it s population. Dwindling population. Seasonal businesses. Youth leaving to find work. Heavy reliance on fossil fuels for industry, transportation and heating. How do we bring our kids home? How do we attract new residents and visitors? How do we keep essential health, community and educational services? How do we create yearround employment for existing businesses and attract new ones? What are out strengths and what do we need to turn things around? What will grow our population and economy once again? But what was the Enabler, the juggernaut that could perhaps create the demand for all the other socioeconomic Bigger Picture benefits the community aspires to?

21 The Bigger Picture The vision for the Community is complex and all encompassing which must be understood and embraced to be successful: Sustainable Transportation Local Food Supply & Agriculture EcoTourism & Recreation Cultural & Heritage Health & Wellness Public Infrastructure Real Estate Developments Sustainable Energy

22 The Enabler If Digby County and the Islands could become a hub for tidal energy research, development, and generation maybe the rest of the Bigger Picture could follow: Local community-owned Tidal Projects would create opportunities for local supply chain and profits back to community Ongoing operations & maintenance would create new jobs The amount of R&D required to achieve our goal would bring many new people and new skills to the Islands Establishing ongoing testing and demonstration infrastructure, services and educational opportunities would attract industry and academia from around the world Becoming world leaders and applying our expertise and resources to larger initiatives in the Bay of Fundy, and those around the world, would bring further opportunities back to the community

23 Potential SocioEconomic Benefits As a Focal point of small-scale tidal innovation, R&D and commercialization in Canada our region will have: 1. A locally owned and operated company tidal power company with benefits and profits remaining in community 2. More people working in the area permanent and part-time, year round 3. University R&D personnel in community, including young, energetic students 4. New Residents 5. New Businesses in the Community 6. More Business for existing Businesses 7. Media attention to promote the wonders of Digby County and attract new visitors and residents

24 Reference/Resources Nova Scotia Marine Renewable Energy Strategy (2012) Community Engagement Strategies & Resource Guide To Support Small-Scale Tidal Power in Nova Scotia (2013) Community and Business Toolkit for Tidal Energy Development (2012) Value Proposition for Tidal Energy Development (2015) NS Offshore Energy Research Association Fundy Energy Resource Network (FERN) Marine Renewables Canada NS Department of Energy

25 Thanks!