This week: Battery farms and VC bucks

We’re excited to be back after a brief summer hiatus. Here’s the Atlantic news we’re tracking this week, from power plays in Nova Scotia to Newfoundland’s VC boom.

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Nova Scotia’s clean energy plans have taken a couple of big steps forward, with a major contract awarded in the province’s battery storage mega-project and an expansion of a rural wind turbine program.?

Canadian Solar’s e-STORAGE division named Dartmouth’s PCL Construction to carry out the engineering, construction and procurement for three giant battery farms in Waverley, Bridgewater and White Rock. The first of the three battery farms is expected to come online next year with the balance of construction to be completed in 2026.?

PCL’s Andrew Moles called the project?“an unprecedented milestone for the local communities and for renewable energy as a whole in Nova Scotia.”?

Nova Scotia Power is spending $243 million to build the battery farms to ensure the province has the capacity to store cheaper off-peak energy and meet growing peak demand as electric cars, other modes of transportation and home use expand. ?

In another step toward building a green energy grid, Prime Minister Justin Trudeau made a stop in the province to announce a $125-million federal contribution to the Red Spruce wind turbine project being built by SWEB Development and Glooscap First Nation in East Hants, N.S.?

Trudeau made the pledge at a dairy farm near the 6-megawatt Hardwood Lands Community Wind Project that has been operating for the last five years.??

Red Spruce will be a much larger 12-turbine, 76-megawatt operation, meant to power 350,000 homes and create hundreds of jobs. Ottawa’s contribution comes on top of a $135-million pledge to the battery farms, part of the overall $354 million cost of those facilities.?

Nova Scotia Power is partnering with 13 Mi’kmaw communities, the Wskijinu’k Mtmo’taqnuow Agency Ltd. (WMA) through a $138.2 million Indigenous Equity Initiative loan by the Canada Infrastructure Bank.

Still missing: Trudeau did not make any commitment to the Atlantic Loop while he was in the province. That plan to transmit clean energy between Quebec, Nova Scotia and New Brunswick has been estimated to cost between $2 billion and $5 billion and is seen by many as key piece of the region’s energy ambitions.?

MORE FROM PPF: Listen to Emera CEO Scott Balfour on WONK, as he talks about building a clean electricity system in Nova Scotia and beyond. ?

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Rock solid investments

Newfoundland and Labrador was the bright spot in an otherwise gloomy first-half report on capital investment in the Atlantic region this year.?The Canadian Venture Capital and Private Equity Association reported that investment in Nova Scotia plummeted 72 percent year-over-year, from $47 million to only $13 million in the first half of 2024.?

New Brunswick investments plunged 53 percent to $7 million from $15 million a year earlier and Prince Edward Island attracted only $1 million in venture capital this year compared to $4 million in the same period in 2023.??

Newfoundland and Labrador, however, saw a 700-percent spike to $56 million.?Nearly half of that, $27 million, was connected to a St. John’s company’s-AI-driven legal document writing software called Spellbook.?

Canadian Venture Capital and Private Equity Association CEO Kim Furlong said that seed deals have retreated to 2020 levels, potentially stunting the growth of some ventures that will be needed to feed the science and tech sectors in the future.???

But at least one angel investor remains optimistic. Permjot Valia told allNovaScotia that institutions such as Dalhousie University are ripe with promising start-ups and that the provincial government is investing in local businesses.?

Although high interest rates and a heated real estate market have prompted venture capitalists to avoid riskier investments, he said it’s a good sign that much of the capital that is being invested is coming from within the Atlantic region.?

An Entrevestor analysis found Newfoundland investments in the second quarter were split between information technology and life sciences. But life sciences accounted for four out of six investments in Nova Scotia in the same period. Traditionally those investments have been concentrated in the IT sector.?

Venture capital spending was down about 10 percent nationally to $3.6 billion from $4 billion in the same period of 2023, according to the Canadian Venture Capital report.?

Statistics Canada data shows that Newfoundland and Labrador has led the country in GDP growth related to the IT sector between 2018 and 2023 with a 110 percent increase. Nova Scotia had the next largest IT-related increase with 65 percent growth. That was followed by 58 percent in British Columbia.?

Back to (office) work

The Nova Scotia government’s directive?ordering workers back to the office has not gone over as well as it might have hoped. Nova Scotia told?3,500 non-unionized public employees —?many of whom work from home up to three days a week, and have been doing so since before the pandemic —?to return to their desks full time by Oct. 15.

Nova Scotia opposition leaders suggested that the new policy will be especially hard on parents and could lead to retention and recruitment problems. Concerns have also been?raised about the effect?on downtown Halifax traffic, which has been a bit of a problem. ?

The change is meant to help on-board new employees and assist managers struggling to supervise workers stationed in different locations, according to the minister responsible for the Public Service Commission.?

Since 2015, well before the pandemic, Nova Scotia has had a program allowing voluntary work-from-home arrangements at the discretion of government departments and teams. The Department of Health, for instance, launched an official Flexible Working Arrangement (FWA) program in Dec. 2020.?

Under the latest directive, the government says it will make some rare accommodation for the 3,500 affected employees if returning to the office presents a significant hardship or unacceptable health risk, a government spokesperson told the CBC. It reported that it had received complaints from affected workers about the government’s lack of rationale for the back-to-the-office order.?

The federal government ordered its workers back to the office three days a week starting this?September. Last year, 155,000 members of the Public Service Alliance of Canada walked off the job to protest an order demanding they return to the office at least two days a week.??

Stop the presses

There are growing concerns about the state of local journalism in Atlantic Canada with Postmedia’s purchase of Saltwire Network expected to become final on Aug. 24. Some journalism experts are warning that the sale could have a detrimental impact on local news reporting if Postmedia’s majority owner, private equity firm Chatham Asset Management, lays off staff to maximize the papers’ profits.??

“The real outcome of that ownership is the new firm liquidates assets, closes newsrooms and it lays off journalists,"?Margot Susca, assistant professor of journalism at American University in Washington, D.C., told CBC.?

Susca cited the McClatchy chain of papers in the U.S., which includes The Miami Herald. Also owned by Chatham Asset Management, it laid off 11 percent of its newsroom staff last year, she said.??

A spokesperson for the Communication Workers of America, the union that represents about 100 of the affected Atlantic media workers, told Canadian Press it expects Postmedia will lay off some staff.?

But the judge who approved Postmedia’s bid for the news outlets said that Saltwire and its related properties, already under creditor protection, would have meant the end of?those operations anyway.??

Another worry: The Telegram’s printing plant is not part of the Postmedia deal, stoking fears that the St. John's paper will move to an online-only publication. It operates seven presses, including the province’s only large web press that is used in printing newspapers.?

That is leaving some smaller papers like The Shoreline News in Conception Bay South, N.L., wondering how they?will publish in the future. Taking the paper to a mainland printer could cost 30- to 40 percent more, editor and publisher Craig Westcott told the CBC.?

Smooth sailing

After considering 40 shipyards around the world, Nova Scotia’s Veer Group has settled on the Fosen yard in Stralsund, Germany to build the first of two sail and hydrogen-powered container ships?expected to be in service in 2027.?

Based in Lunenburg, N.S.?and registered in the Bahamas, Veer claims it will be the first company to deploy a fleet of ocean-going clean container ships. According to the company’s website, its uniquely shaped hull design, efficient DynaRig sailing system and hydrogen will give its vessels greater speed and range. The ships will also have what’s called a Silent-E Notation that minimizes the impact of underwater noise on sensitive wildlife and protected marine areas.??

The venture is being financed with $73.2 million from Amsterdam’s PROW Capital, which specializes in debt financing of green shipping. To boost its capital financing, Veer wants to sell minority equity stakes in its clean vessels. The company is also working to attract another $1.5 million for operations.?

Veer says it is committed to avoiding the labour abuses that have been documented in the shipbuilding industry and its CEO and COO visited a short-list of about 10 shipyards before deciding on Fosen.?

The yard is expected to begin building in about six months when the engineering has been finalized.?

This newsletter is sponsored by the Frank McKenna Fund. It is produced by journalists at PPF Media and maintains complete editorial independence.

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