Without the agreement, Nova Scotia’s coal-fired units would have to close prematurely at a cost of up to $C1.3 billion.

The special arrangement with Ottawa follows an announcement by Environment Minister Peter Kent earlier this month that provided flexibility for coal-reliant provincial governments struggling to meet the new federal environmental standards.

Under the draft agreement Nova Scotia’s current greenhouse gas regulations for the electricity sector apply until 2020.

The province will add regulated reductions for 2020 to 2030 to meet the federal time line. This will ensure that Nova Scotia’s gas regulations achieve the same emission reductions over the term of the agreement.

Under the federal regulations, coal-fired electricity units must meet a more strict emissions standard or shut down at the end of their economic life.

The regulations are designed to encourage the use of more natural gas and enable the adoption of carbon capture and storage technology.

Both options, however, are limited in Nova Scotia due to a relatively new natural gas market and lack of viable CCS opportunities.