Executive Summary

LOWER-RISK OPPORTUNITY - REGIONAL GRID INTEGRATION WITH RENEWABLE ENERGY ENABLEMENT

The Maritime Provinces transmission interconnection projects represent essential grid infrastructure linking Prince Edward Island, New Brunswick, and Nova Scotia electricity systems, enabling renewable energy integration, enhancing grid reliability, and positioning Atlantic Canada for electricity exports to northeastern United States. The CAD $1-2 billion investment portfolio comprises multiple transmission upgrades strengthening interprovincial electricity trading whilst supporting Maritime provinces' aggressive renewable energy deployment targets (wind, solar, tidal).

Lower risk profile reflects transmission infrastructure's inherent characteristics: regulated utility returns, essential service nature, established Maritime provincial utility frameworks, and diversified benefit distribution across three provinces reducing political opposition. Projects leverage existing transmission corridors minimising environmental disturbance and Indigenous consultation complexity whilst delivering quantifiable reliability improvements and renewable energy capacity increases.

The investment thesis centres on Maritime provinces' coordinated energy strategy addressing electricity demand growth, aging fossil fuel generation retirement (coal phase-out completed, natural gas plants approaching end-of-life), and renewable energy intermittency challenges requiring stronger grid interconnections. Federal government supports interprovincial electricity trading through Regional Energy and Resource Tables framework and Canada Infrastructure Bank transmission investment mandate.

For UK and European institutional investors, Maritime transmission offers defensive infrastructure characteristics—stable regulated returns, essential service resilience, moderate capital deployment scale (CAD $1-2 billion manageable for mid-sized infrastructure funds), and climate-aligned renewable energy facilitation without fossil fuel controversy.

Verdict: Recommended investment opportunity for infrastructure funds seeking lower-risk, regulated utility returns in renewable energy-enabling transmission infrastructure.

Project Overview 

Location: Prince Edward Island, New Brunswick, Nova Scotia (Maritime provinces)

Project Type: High-voltage electricity transmission interconnections and upgrades

Total Investment: CAD $1-2 billion (multiple projects)

Proponents: Maritime provincial utilities (NB Power, Nova Scotia Power, Maritime Electric)

Indigenous Territories: Mi'kmaq Nation (all three provinces), Wolastoqey/Maliseet Nation (New Brunswick)

Status: Planning and early development stages; part of Eastern Energy Partnership framework

Timeline: Phased construction 2026–2032

Regulatory Framework: Provincial utility commissions; federal support through Regional Energy and Resource Tables

Project Description

Maritime Energy Context:
The Maritime provinces operate interconnected but constrained electricity systems requiring strengthened transmission capacity to address: coal generation retirement (completed 2030 target), natural gas plant aging, renewable energy intermittency (wind/solar), isolated Prince Edward Island dependency on undersea cables, and potential electricity export opportunities to northeastern United States through New Brunswick-Maine interconnections.

Key Transmission Projects Portfolio:

1. Enhanced PEI-New Brunswick Interconnection:

• Upgrade: Existing undersea cable capacity or construct additional cable

• Current capacity: 180-200 MW via two cables

• Target capacity: 300-350 MW providing enhanced reliability and renewable energy import/export capability

• Estimated cost: CAD $300-500 million

2. New Brunswick Internal Transmission Upgrades:

• Strengthen: 345 kV transmission backbone connecting northern and southern regions

• Enable: Increased wind energy integration from northern NB wind resources

• Facilitate: Electricity flows between Quebec interconnection and Nova Scotia/Maine

• Estimated cost: CAD $300-400 million

3. New Brunswick-Nova Scotia Interconnection Enhancement:

• Upgrade: Existing 345 kV transmission linking provinces

• Current capacity: Constrains interprovincial electricity trading

• Enhanced capacity: Enables renewable energy sharing and grid balancing

• Estimated cost: CAD $200-300 million

4. Nova Scotia Internal Grid Modernisation:

• Strengthen transmission: Supporting offshore wind integration (future)

• Connect: Renewable energy zones (wind, tidal, solar) to load centres (Halifax, industrial Cape Breton)

• Grid resilience improvements: Addressing climate change impacts (storms, flooding)

• Estimated cost: CAD $300-400 million

5. New Brunswick-Maine Interconnection Capacity:

• Evaluate expansion: Existing transmission to support increased electricity exports to New England

• Current interconnection capacity: Approximately 1,000 MW

• Potential expansion: Supporting Maritime renewable energy exports

• Estimated cost: CAD $100-200 million (NB portion; Maine investments separate)

Indigenous Consultation Framework

Mi'kmaq Nation (All Three Maritime Provinces):
Mi'kmaq territory encompasses Prince Edward Island, Nova Scotia, and portions of New Brunswick, requiring consultation across all transmission projects. Modern treaty discussions ongoing in all provinces, with established consultation protocols through:

• Assembly of Nova Scotia Mi'kmaq Chiefs
• Mi'kmaq Confederacy of PEI
• Mi'kmaq communities in New Brunswick

Consultation Status: Transmission projects following established rights-of-way generally face lower Indigenous opposition than new corridor developments. However, meaningful consultation required addressing:

• Traditional territory impacts from construction activities
• Archaeological site protection along transmission corridors
• Employment and contracting opportunities for Mi'kmaq-owned businesses
• Revenue sharing or benefit agreements
• Environmental monitoring participation

Wolastoqey (Maliseet) Nation (New Brunswick):
Wolastoqey territory in New Brunswick requires consultation for transmission projects crossing traditional lands. Six Wolastoqey communities maintain Aboriginal rights and title claims, with established provincial consultation frameworks.

Consultation Advantages:

• Transmission corridors: Typically follow existing rights-of-way reducing "greenfield" impacts
• Linear infrastructure: Allows route adjustments avoiding culturally sensitive sites
• Economic benefits: Construction contracts, ongoing maintenance create positive engagement opportunities
• Renewable energy facilitation: Aligns with many Indigenous communities' environmental values
• Precedent: Maritime Link (Nova Scotia-Newfoundland subsea cable) achieved Indigenous support through consultation and benefits

Risk Assessment – Lower Indigenous Opposition:
Transmission projects historically encounter less Indigenous opposition than generation facilities (hydroelectric dams, wind farms) or resource extraction, provided:

• Meaningful consultation: Occurs early in planning
• Archaeological assessments: Conducted before construction
• Employment and contracting preferences: Established
• Community benefit agreements: Negotiated
• Traditional use areas: Respected through routing or seasonal construction restrictions

Investment Benefits

Grid Reliability Enhancement:

• Reduced outage frequency and duration: Through redundant transmission paths
• Enhanced emergency power restoration capability: Following storms or equipment failures
• Improved voltage stability and power quality
• Climate resilience: Addressing increasing extreme weather events

Renewable Energy Integration:

• Wind energy: Transmission capacity enabling 2,000-3,000 MW additional wind deployment across Maritimes
• Solar energy: Grid flexibility supporting distributed solar generation growth
• Tidal energy: Future Bay of Fundy tidal power potential (Nova Scotia/New Brunswick)
• Offshore wind: Nova Scotia offshore wind zone requires transmission infrastructure

Interprovincial Electricity Trading:

• Economic efficiency: Enables provinces to share generation resources, reducing need for redundant capacity
• Renewable energy balancing: Wind-rich New Brunswick can export to load centres (Halifax, PEI)
• Cost reduction: Optimised generation dispatch across three provinces lowers overall costs
• Seasonal optimisation: Hydroelectric imports from Quebec during low Maritime wind periods

Export Opportunity to United States:

• Northeastern states: Maine, Massachusetts, Connecticut, Rhode Island seeking Canadian renewable electricity imports
• Existing New Brunswick-Maine interconnections: Provide market access
• Premium pricing: US renewable portfolio standards create CAD $60-120/MWh pricing
• Long-term contracts: 15-25 year power purchase agreements with US utilities provide revenue certainty

Economic Impact:

• Construction employment: 1,500-2,500 person-years across portfolio
• Operational employment: 50-100 permanent positions (maintenance, system operations)
• Regional economic activity: CAD $1-2 billion capital deployment supporting Maritime construction sector
• Electricity cost reduction: Transmission efficiency improvements reduce consumer costs over long term

Provincial Utility Frameworks - Regulatory Certainty

NB Power (New Brunswick Crown Corporation):

• Provincial government-owned utility: Serving 400,000+ customers
• Credit rating: A (stable outlook)
• Regulatory oversight: NB Energy and Utilities Board
• Rate base structure: Allows cost recovery for transmission investments
• Government backing: Strong given Crown corporation status

Nova Scotia Power (Emera subsidiary, private utility):

• Investor-owned utility: Serving 530,000+ customers (majority of Nova Scotia population)
• Emera parent company: Toronto Stock Exchange listed, market cap CAD $6+ billion
• Regulatory oversight: Nova Scotia Utility and Review Board
• Regulated transmission returns: Typically 9-10% allowed ROE
• Regulatory framework: Strong, ensuring cost recovery

Maritime Electric (Fortis subsidiary, private utility):

• Serves entire Prince Edward Island: 80,000+ customers
• Fortis parent company: Major Canadian utility holding company, TSX-listed
• Regulatory oversight: PEI Island Regulatory and Appeals Commission
• Regulated utility returns: Cost recovery certainty
• Scale: Small but stable customer base

Regulatory Advantages:

• Established rate-setting processes: Transparent methodology
• Transmission investment approval: Typically granted given reliability and renewable energy benefits
• Cost recovery: Through rate base inclusion with allowed returns
• Regulatory stability: Maritime utility commissions have decades of consistent precedent
• Political support: Provincial governments prioritise electricity reliability and renewable energy transition

Federal Government Support Framework

Regional Energy and Resource Tables (Eastern Canada):
Federal-provincial collaboration framework supporting interprovincial electricity trading, transmission development, and renewable energy integration. Maritime provinces participating actively, with transmission interconnections identified as priority infrastructure.

Canada Infrastructure Bank:
CIB's investment mandate includes electricity transmission infrastructure generating public benefits. Maritime transmission projects potentially eligible for:

• Cornerstone equity investment: 20-30% project capital
• Concessional debt financing: Below market rates
• Revenue guarantees: De-risking demand uncertainty
• Project development support and technical expertise

Precedent: CIB invested in Oneida Energy Storage (Ontario) and committed to Atlantic Loop transmission concept (Maritime-Quebec interconnection for hydroelectric imports).

Clean Electricity Regulations:
Federal regulations requiring electricity grid achieve net-zero emissions by 2035 create policy imperative for transmission supporting renewable energy integration and coal/natural gas retirement. Maritime transmission directly supports compliance.

Project Economics

Capital Cost Allocation:

Enhanced PEI-NB Interconnection: CAD $300-500 million

• Subsea cable manufacturing and installation
• Shore connection infrastructure
• Environmental assessment and permitting
• Contingency: 20-25% for marine construction

NB Internal Transmission Upgrades: CAD $300-400 million

• 345 kV line construction or reconductoring
• Tower upgrades or replacement
• Substation expansion
• Rights-of-way preparation

NB-NS Interconnection Enhancement: CAD $200-300 million

• Existing line capacity upgrades
• Substation equipment replacement
• Protection and control systems modernisation

NS Internal Grid Modernisation: CAD $300-400 million

• Transmission line construction
• Offshore wind integration infrastructure
• Grid automation and smart grid technology
• Climate resilience investments

NB-Maine Interconnection Capacity: CAD $100-200 million

• Canadian-side transmission upgrades
• Interconnection metering and control
• Regulatory coordination with US authorities

Total Portfolio: CAD $1.2-1.8 billion

Operating Costs:
Transmission infrastructure operates with minimal ongoing costs:

• Maintenance: Annual inspections, vegetation management, equipment testing
• Labour: System operators, maintenance crews (50-100 FTE across portfolio)
• Insurance: Equipment and liability coverage
• Monitoring: SCADA systems, real-time grid management

Revenue Model and Cost Recovery:
Regulated utility framework ensures cost recovery through:

• Transmission tariffs: Charged to electricity generators and distributors
• Rate base inclusion: With allowed return on equity (typically 9-10%)
• Long-term cost recovery: Over 40-50 year asset life
• Inflation-adjusted rate adjustments
• Regulatory approval process: Providing certainty

Returns Profile:

• Allowed ROE: 9-10% typical for Canadian regulated transmission
• Total returns: 7-8% after-tax IRR for equity investors
• Debt capacity: 60-70% of capital structure (low-risk transmission supports high leverage)
• Stability: Essential infrastructure with regulated monopoly characteristics

UK & European Investor Assessment 

Investment Rationale:

Lower-Risk Infrastructure Characteristics:
Transmission infrastructure offers defensive investment profile attractive for risk-averse capital:

• Regulated utility returns: With cost recovery certainty
• Essential service nature: Electricity transmission fundamental to modern economy
• Monopoly characteristics: No competition for existing transmission corridors
• Long asset life: 40-50 years matching institutional investor duration needs
• Diversified customer base: All electricity users across three provinces

Renewable Energy Transition Enabler:
Maritime transmission facilitates coal retirement and renewable energy growth without direct fossil fuel exposure or climate policy opposition. Projects explicitly support:

• Wind energy integration: 2,000-3,000 MW potential capacity increase
• Offshore wind preparation: Nova Scotia
• Tidal energy future development: Bay of Fundy
• Solar distributed generation support

Climate-aligned infrastructure appeals to ESG-focused European institutional investors managing energy transition portfolios.

Manageable Capital Scale:
CAD $1-2 billion total portfolio allows participation without massive capital deployment:

• Single project investments: CAD $200-500 million range
• Portfolio approach: Diversification across multiple transmission projects
• Suitable for mid-sized infrastructure funds: EUR 1-3 billion AUM
• Co-investment opportunities: With provincial utilities and Canada Infrastructure Bank

Political and Regulatory Stability:
Maritime provinces offer stable investment environment:

• Established democratic institutions and rule of law
• Transparent utility regulatory frameworks: Decades of precedent
• Provincial government support: Electricity reliability and renewable energy
• Federal policy alignment: Through Regional Energy and Resource Tables
• No history of arbitrary utility regulation or expropriation

Geographic and Currency Diversification:

• Canadian Dollar exposure: Diversifies GBP/EUR portfolios
• Atlantic Canada economic base: Different from Western Canadian energy sector
• Correlation benefits: Maritime electricity demand relatively independent from oil/gas commodity cycles

Risk Profile - Moderate:

Minimal Risks:

Regulatory Approval: Transmission projects serving reliability and renewable energy integration typically receive regulatory approval with cost recovery. Maritime utility commissions have consistent track record.

Indigenous Consultation: Transmission following existing corridors encounters less opposition than new developments. Established consultation protocols in place. Economic benefits create positive engagement opportunities.

Construction Risk: Transmission construction well-understood technology with experienced contractors available. Marine cable installation for PEI presents technical challenge but established precedent (existing cables operational).

Demand Risk: Electricity demand relatively inelastic and growing modestly. Transmission essential regardless of specific generation sources. Renewable energy growth increases transmission value.

Political Risk: All three provincial governments support transmission investments. Federal government policy alignment. No significant public opposition to transmission infrastructure.

Environmental Risk: Transmission environmental impacts manageable through routing and mitigation. Projects following existing corridors minimise new disturbance.

Material Risks Requiring Management:

Cost Overrun Risk:

• Challenge: Transmission projects can experience cost increases from unforeseen site conditions, equipment price inflation, labour shortages, or extended regulatory timelines.

• Mitigation: Fixed-price EPC contracts transfer construction risk to contractors. Regulatory frameworks allow prudently incurred cost recovery even if exceeding estimates. Contingency reserves (20-25%) included in budgets. Phased development allows course correction.

Interprovincial Coordination:

• Challenge: Projects crossing provincial boundaries require coordinated regulatory approvals, cost allocation agreements, and political alignment across jurisdictions.

• Mitigation: Eastern Energy Partnership framework establishes interprovincial cooperation. Federal Regional Energy and Resource Tables facilitate coordination. Precedent: Maritime Link successfully navigated interprovincial issues.

Federal Policy Changes:

• Challenge: Federal government policy shifts could reduce support for interprovincial transmission or alter clean electricity regulations affecting project justification.

• Mitigation: Broad political consensus on renewable energy transition and grid reliability. Transmission infrastructure benefits recognised across political spectrum. Long-term policy stability likely.

Currency Exposure:

• Investment and revenues in CAD: No natural USD hedge unlike projects with export revenues.

• Exchange rate (October 2025): CAD $1.00 = £0.56 / €0.66

• Impact: CAD strength reduces GBP/EUR returns; CAD weakness enhances returns

Strategic Context

Maritime Energy Strategy Coordination:
Three Maritime provinces coordinating energy planning through Eastern Energy Partnership and Council of Atlantic Premiers, recognising shared electricity system requires collaborative transmission development. This interprovincial alignment de-risks individual project approvals.

Coal Phase-Out Completion:
Maritime provinces completed coal generation retirement by 2030 (ahead of federal 2035 target), creating capacity gap requiring replacement through:

• Renewable energy: Wind, solar, tidal
• Natural gas generation: Transitional
• Electricity imports from Quebec hydroelectric
• Interprovincial sharing: Through enhanced transmission

Federal Clean Electricity Regulations:
Regulations requiring net-zero electricity grid by 2035 create policy imperative for transmission supporting renewable integration and enabling interprovincial electricity trading optimising clean generation resources.

US Export Market Opportunity:
Northeastern United States seeking Canadian renewable electricity imports to meet state renewable portfolio standards. Maritime transmission positions region for export opportunities through New Brunswick-Maine interconnections, though US export represents upside rather than base case justification.

Comparable Projects - Lessons Learned

Maritime Link (Completed 2017):

• Capacity: 500 MW subsea transmission cable connecting Newfoundland to Nova Scotia
• Investment: CAD $1.96 billion project (including Newfoundland-side infrastructure)
• Lessons: Subsea cable technology viable in North Atlantic; interprovincial projects achievable; federal support available (loan guarantees)
• Challenges: Cost overruns (approximately 30% above initial estimates); rate impacts on Nova Scotia customers; ongoing operational issues

Ontario-Quebec Interconnection Upgrades:

• Scope: Multiple projects strengthening transmission between provinces
• Lessons: Regulatory frameworks support interprovincial transmission; cost recovery achievable; renewable energy integration benefits justify investments

Alberta-British Columbia Intertie:

• Capacity: 1,200 MW transmission linking provinces
• Lessons: Interprovincial electricity trading creates economic value; transmission supports renewable energy growth; regulatory approval processes navigable

Investment Structure Opportunities

Direct Equity Participation:

• Co-investment: With provincial utilities (NB Power, Nova Scotia Power, Maritime Electric)
• Project-specific special purpose vehicles: For individual transmission projects
• Portfolio investment: Across multiple Maritime transmission projects

Canada Infrastructure Bank Partnership:

• CIB cornerstone equity investment: 20-30% typical
• Institutional investor co-investment: Alongside CIB
• CIB due diligence and project structuring expertise
• Potential revenue guarantees or concessional debt: From CIB

Regulated Utility Investment:

• Equity investment: In Emera (Nova Scotia Power parent) or Fortis (Maritime Electric parent)
• Indirect exposure: To Maritime transmission through publicly-traded utilities
• Liquid investment option: Versus direct project equity

Project Finance Debt:

• Non-recourse or limited-recourse debt financing
• Strong credit profile: Given regulated utility revenues and government backing
• Typical structure: 60-70% debt, 30-40% equity
• Canadian institutional investors: Pension funds, insurance companies natural debt investors

Public-Private Partnership (P3):

• Design-build-finance-maintain structure
• Private consortium: Constructs and maintains transmission infrastructure
• Long-term availability payments: From provincial utilities
• Risk transfer: To private sector for construction and operational performance

Maritime Provinces transmission interconnections represent lower-risk infrastructure investment enabling renewable energy integration, enhancing grid reliability, and positioning Atlantic Canada for electricity exports to northeastern United States. The CAD $1-2 billion portfolio offers defensive characteristics attractive to risk-averse institutional capital: regulated utility returns, essential service nature, established provincial frameworks, and climate-aligned renewable energy facilitation.

Lower risk profile reflects transmission infrastructure inherent advantages (monopoly characteristics, cost recovery certainty, minimal Indigenous opposition), Maritime provinces' coordinated energy strategy, federal policy support, and proven precedent from completed interprovincial projects. Investment suitable for infrastructure funds seeking stable, long-term returns from essential renewable energy-enabling infrastructure without fossil fuel controversy.

Recommended for: European infrastructure funds targeting lower-risk, regulated utility returns; pension funds seeking long-duration assets matching liabilities; insurance companies requiring stable cash flows; ESG-focused investors supporting renewable energy transition.