A detailed analysis of the IESO Nova Scotia Fast-Acting Generation draft RFP (March 2026) - the procurement that will determine what Nova Scotia ratepayers pay for the next 20–27 years.
The original analysis below was written in March 2026 when I first reviewed the draft RFP. The initial focus was on the issues and mitigation: the technology lock-in, the cost risks, the confidentiality barriers. That analysis stands, and it’s kept here for the record.
But as I learned more, my view shifted. Instead of mitigation, there's a chance to look at something different. Ontario’s IESO has already run a successful technology-neutral capacity procurement - LT1 (2023–2025) and is in the midst of it's second - LT2 (2025–2026) - using a similar IESO organizational structure that now operates in Nova Scotia. The results were striking: in LT1, 10 of 13 winning projects were battery storage, delivering 1,784 MW at prices 2.5 times cheaper than the gas bids. 9 of those 10 battery projects had 50–51% Indigenous equity ownership, likely a direct result of making Indigenous participation a scored criterion rather than a non-binding checkbox.
Nova Scotia is in a rare position. The ∼2-year delay caused by the IESO-NS transition pushed the procurement timeline into a window where grid-forming batteries - which didn’t exist at transmission scale when the IRP was modelled in 2023 - are now commercially proven. Two 200–300 MW grid-forming BESS projects are operating in Scotland, providing the same grid stability services this RFP requires. NRStor has proposed a 150 MW / 600 MWh Mi’kmaq-owned facility at Trenton, NS that they say could be expanded to 300 MW / 2400 MWh. The technology has arrived. These gas plants have not been built yet. There is still time to have another look before locking in fossil fuels for 25 years.
The downloadable proposal below shows how the current draft RFP can be made technology-neutral - preserving all of IESO Nova Scotia’s existing site work, the Tolling Agreement, and the Functional Specifications, while adding a parallel Capacity Contract option modelled on Ontario’s LT2. Nothing is deleted; the gas option remains available. The market can decide which technology delivers the best value.
This is the leapfrog opportunity: Nova Scotia can skip the gas peaker era entirely and go straight to the technology mix that Ontario discovered through competitive procurement. Same timeline. Same grid reliability. Lower long-term cost. No 25-year fossil fuel lock-in.
Read the Technology-Neutral RFP Proposal (PDF) The Leapfrog Opportunity (1-page summary)
The RFP uses a tolling agreement - a contract structure where the plant operator receives a fixed monthly payment whether or not the plant generates any electricity. On top of that, every dollar spent on fuel is passed through to ratepayers at 100%. The operator bears no fuel price risk; ratepayers bear all of it.
Under the tolling structure, the monthly payment to the plant operator consists of:
The Fixed Capacity Payment is partially indexed to inflation: 20% is adjusted annually by CPI, with the remaining 80% fixed. The contract term is 20 years from Commercial Operation Date, but IESO can unilaterally extend it to 26–27 years without the generator's consent.
The Fixed Capacity Payment covers the generator's capital recovery, return on equity, and fixed O&M - paid monthly regardless of dispatch. The generator gets paid whether the plant runs 0 hours or 8,760 hours in a year. The minimum availability threshold before a default is triggered is only 70% (12-month rolling average).
The actual bid prices will not be made available to the public. IESO members have stated that they don't want to influence the bid process by even suggesting how much it should cost, but this seems to be a deflection to keep the public reaction manageable. However, the cost structure and order of magnitude can be estimated from publicly available data on North American gas peaker capacity pricing. Ratepayers deserve to know the full costs before making decisions!
These capacity payments are what ratepayers owe before a single MWh is generated. Here is a list of costs that ratepayers will pay:
| Cost Component | Who Pays | Details |
|---|---|---|
| Fixed Capacity Payment | Ratepayers | Paid monthly whether or not the plant runs. CPI-indexed (20%). Up to 27 years. |
| All Fuel Costs | Ratepayers (100% pass-through) | Natural gas and light fuel oil. If gas prices spike, ratepayers cover the increase. |
| Variable O&M | Ratepayers | Per-MWh charge when the plant generates electricity. |
| Electrical Interconnection Overruns | Ratepayers | Estimated at $12M per site; any cost above estimate passed through at $35/MW-month. |
| Gas Interconnection | Ratepayers | Regulated gas distribution connection costs, passed through via GIC Adder. |
| Carbon Pricing | Ratepayers | Fuel combustion carbon costs are embedded in fuel pass-through. As carbon price rises, costs increase. |
Fuel price risk, carbon price risk, and construction cost overruns for interconnection are all borne by ratepayers. The generator's Fixed Capacity Payment guarantees its return regardless of how often the plant runs, how much fuel costs, or how high the carbon price goes.
The two sites have different land arrangements:
Unlike a typical energy procurement, this RFP does not invite proposals for the best available project. The key parameters are locked in advance.
The RFP names exactly two sites: Marshdale and Salt Springs. These are not suggested - they are the only permitted locations. The Proposal Workbook has columns pre-labelled "Marshdale Site" and "Salt Springs Site." No alternative sites may be proposed.
The Economic Bid Statement allows three offer types: Single Project (one site), Independent Project (separate bids for each), or Combined Project (a package deal for both at a discount). One company can lock up all 600 MW of fossil fuel capacity.
Only gas turbines (CT) or reciprocating internal combustion engines (RICE) are eligible. Natural gas is the primary fuel; light fuel oil is secondary. Battery storage, demand response, and renewable alternatives are not eligible.
Proponents must demonstrate 3+ North American examples of their proposed technology operating before January 1, 2021. This excludes newer clean energy technologies that could provide the same grid services.
Proponents must describe a "pathway to future operation without fossil fuels" but face no binding requirement, timeline, or penalty for never following through. NS Power's own IRP rejected hydrogen-enabled generation as uneconomic.
The draft RFP feedback period (March 11-30) was designed for prospective bidders, not the public. There is no formal mechanism in the RFP for community input to affect the procurement terms.
The RFP asks proponents to "Describe the Proposed Project's pathway to future operation without the use of fossil fuels." This sounds forward-looking, but it is purely descriptive - there is no binding requirement, timeline, or penalty for failing to transition away from fossil fuels. It is a narrative exercise embedded in a 25-year fossil fuel contract.
The RFP creates multiple layers of information restriction that prevent the public from knowing what these plants will cost and what environmental data exists for the sites.
To access site-specific data - including aquifer investigation results, geotechnical reports, and land deal terms - a party must clear three barriers:
| Barrier | What It Requires | Effect |
|---|---|---|
| 1. Register as a Proponent | Submit a Registration Form identifying the party as a prospective bidder | Community groups, journalists, and environmental organizations cannot access the data unless they register as entities intending to bid |
| 2. Pay $20,000 + HST | Non-refundable payment by electronic funds transfer to IESO Nova Scotia | Even if you pay and don't bid, you don't get the money back |
| 3. Accept Binding Confidentiality | All information received can only be used "for the purpose of replying to this RFP" and must not be disclosed | Even if a community group registered and paid, they could not share the data with the community, media, or public |
There is no provision anywhere in the RFP that allows non-proponent access, community access, freedom of information requests, or any other mechanism for the public to obtain the site data. The only path to the aquifer test results runs through registration as a bidder, $20,000, and a binding confidentiality obligation that prohibits sharing the information.
The Proposal Package Information (Appendix D of the RFP) includes, for each site:
| Document | Public Interest | Accessible? |
|---|---|---|
| Aquifer investigation results | Determines groundwater impact on neighbouring wells and watercourses | Behind paywall |
| Geotechnical report (test pits, boreholes, lab results) | Determines site suitability and foundation design | Behind paywall |
| Option to Purchase/Lease agreements | Terms of public land deals | Behind paywall |
| Land control cost spreadsheet | What public money has already been spent | Behind paywall |
| Summary of community engagement | What the community was told and when | Behind paywall |
| Environmental Assessment Registration Documents | Environmental impact analysis | Public (NS Environment website) |
The aquifer investigation results are directly relevant to community concerns about groundwater. The public EARDs contain only a desktop-level water resources assessment. Both EARDs state that "an aquifer test well and pump test will be completed in December 2025" - but whether those field results are behind the paywall, or whether the tests were never conducted, cannot be determined from public information.
Even after the contract is signed, the actual price ratepayers pay remains hidden. Exhibit B of the Tolling Agreement - titled "Contract Capacity, Fixed Capacity Payment, and Other Stated Variables" - is classified as Mutually Confidential Information. Article 8 protects it with confidentiality obligations that survive termination of the agreement, with injunctive relief available without proving damages.
Ontario's IESO publishes individual contract prices for electricity procurements. Alberta and BC allow companies to propose their own sites competitively. The combination of pre-determined sites, a $20,000 paywall for site data, and permanent pricing confidentiality is unusual among Canadian electricity procurements.
The RFP's functional specifications do not just require fossil fuels - they are calibrated to exclude the cheapest fossil fuel technology, steering the procurement toward more expensive options.
Three types of peaker technology exist worldwide. All three burn fossil fuels, but they differ substantially in cost and performance:
| Metric | Frame CT (Heavy-Duty) | Aero CT (e.g., GE LM6000) | RICE (e.g., Wartsila 50SG) |
|---|---|---|---|
| Typical 300 MW config | 1–2 units | 6 units at ~50 MW each | 15–16 units at ~19 MW each |
| Capital cost ($/kW) | ~$984 | ~$1,622 | ~$1,380–1,656 |
| Cold start to full load | 15–20 min | ~10 min | 2–5 min |
| Fuel efficiency | ~37% | ~40% | ~45% |
| Min. stable load | 40–50% | 40% | 10% |
| Meets <10 min start? | No | At the limit | Yes |
The RFP's functional specifications (Exhibit T, Hatch Engineering) require cold start to full power in under 10 minutes. Frame CTs — the cheapest technology at ~$984/kW — require 15–20 minutes and cannot meet this requirement. The cheapest option is excluded.
The RFP does not explain why the cold start threshold was set at <10 minutes rather than <15 or <20 minutes. A 15-minute threshold would have included Frame CTs and given ratepayers access to the lowest-cost technology. No reference is made to any grid stability study or system operator requirement that mandates the specific 10-minute threshold.
Whatever technology is chosen, it is locked in for the contract term. The timeline directly contradicts Canada's climate commitments:
| Milestone | Year |
|---|---|
| Estimated Commercial Operation Date | 2029 |
| Federal Clean Electricity Regulations target | 2035 |
| NS Environmental Goals and Climate Change Reduction Act target (80% below 2005) | 2030 |
| Initial contract term ends | 2049 |
| Canada net-zero target | 2050 |
| IESO unilateral extension limit | 2055–2056 |
| Lease renewal limit (four 5-year renewals) | 2069 |
Section 10.2(f) of the Tolling Agreement explicitly references the Clean Electricity Regulations (SOR/2024-263) - the federal regulation requiring net-zero electricity - as justification for IESO to step in and build the plant itself if the generator delays construction. The regulation intended to drive clean electricity is being cited to accelerate fossil fuel construction.
The IESO NS RFP is unusual among Canadian electricity procurements in several respects:
| Feature | IESO NS RFP | Typical Canadian Practice |
|---|---|---|
| Price transparency | Exhibit B is permanently confidential; pricing sealed even after contract signing | Ontario IESO publishes individual contract prices for electricity procurements |
| Site selection | Two sites pre-determined (Marshdale and Salt Springs); no alternatives allowed | Alberta and BC allow companies to propose their own sites competitively |
| Technology eligibility | Only gas turbines or RICE; no clean energy alternatives | Many Canadian procurements are technology-neutral or include storage/renewables |
| Site data access | $20,000 paywall with binding confidentiality; no public interest carve-out | Environmental and site data typically accessible through provincial EA processes |
| Market concentration | One bidder can win both 300 MW sites (600 MW total) | Procurements typically limit single-bidder concentration to preserve competition |
Nova Scotia ratepayers are being asked to sign an estimated $3–5 billion, 20–27 year contract to pay a private company for two fossil fuel plants that:
All documents analyzed here are dated March 10–11, 2026 and stamped "DRAFT." The Tolling Agreement contains numerous "[Note to Finalization]" markers showing it is still being negotiated. A feedback form was released alongside the draft. The terms are not yet final.