Renewables in Remote Microgrids Conference

Policy Approach of the Government of

the Northwest Territories Dave Nightingale,

Director, Energy Policy and Planning September 17, 2015

Introduction

•  Energy in the NWT •  Policy Response:

•  Energy Conservation and Efficiency •  Integrating Renewable Energy •  Net Metering •  Engagement

•  Low Water in the North Slave Region •  Forward

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Community Electrical Generation

Hydro  263.4  GWh  

Diesel  76.8GWh  

Purchased  (Gas)  8.4  GWh  

“One of the most complicated 64 MW systems I’ve seen” Dr. Marlo Raynolds, 2014 Energy Charrette

Estimated Diesel Consumption, NWT Diamond Mines: Well Over 200 million litres

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NWT Diesel Use: 22 million litres Add ~27 million litres in Yellowknife for 2015-16

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

10,000,000

2013

/14

Die

sel F

uel R

equi

red

(Litr

es)   Currently, Inuvik

Diesel is partially offset by LNG.

Energy in the NWT (2012)

Some Electricity Figures

33 Communities

25 Thermal Zone, 8 Hydro Zone Communities

31 cents / kWhr in Yellowknife, similar range in other hydro communities

61 cents / kWhr in the Thermal Zone

Residential Power Subsidy: YK rates for 600 kWhrs in summer, 1,000 kWhrs in Winter

Cost of Diesel: ~ 32 cents per kWhr

GNWT Energy Policy

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Arctic Energy Alliance

•  The GNWT contributes over $3 million to the AEA per year. •  The GNWT has funded the establishment of regional offices in

Hay River, Inuvik, Norman Wells, Whatì and Fort Simpson.

•  AEA programs include: o  Alternative Energy Technologies Program o  Energy Rating Services Support Program o  Energy Efficiency Incentive Program o  Biomass: Promotion, Community Engagement and Project

Evaluation o  Commercial Energy Conservation and Efficiency Program o  Community Government Energy Retrofit Program o  Community Renewable Energy Efficiency Program

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Biomass

•  The GNWT has 22 biomass boilers with 6 more to be completed by 2016.

•  Cost: ~60 to 70 cents per litre of oil equivalent

•  In 2015-2016, pellet boilers will be installed in Tulita and Fort Good Hope schools.

•  Local district heating systems will continue to develop as the NWT biomass industry matures.

•  Locally produced wood pellets and wood chips is the next step.

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Solar: NWT Ranks 2nd, After Ontario

IPP’s vs Utility Model Solar

Fort Simpson – Utility Model $1.07 Million – 104 kW $10 per watt installed 1st Utility scale solar in NWT

–  Spring 2012 - 60 kW –  Spring 2013 - 54 kW

•  $31,000 / yr savings to thermal zone

65% GNWT funded 35% Utility funded

1st stage completed in 8 months, benefits shared

Lutselke – IPP Model $350,000 – 35kW $10 per watt installed 1st NWT Solar IPP

–  Fall 2015

$12,500 / yr savings to band office

30% GNWT Funded 30% Fed Funded 40% Other

Community engagement and empowerment

Net Metering Program

•  In April 2015, the GNWT issued rate policy guidelines that directed the PUB to: o  Ensure costs of net metering are transparent and tracked by

utilities. o  If costs become material, the Board may recommend funding

by the GNWT. o  Government customers, with the exception of municipal

governments in thermal communities, should not be eligible for net metering.

o  Limit the size of installations to 15 kw to ensure that the program is accessible to as many residents and businesses as possible.  

Engagement

•  The GNWT held the first Energy Charrette in 2012. –  Resulted in Energy Action Plan and the Power System

Plan

•  Between 2012 and 2014: –  Electricity rates increased, the 1st year of low water

occurred, requiring a $20 million subsidy. –  Transmission line concept to link the North and South

Slave grids with the southern grid proved to be too expensive.

2014 Charrette Results: Highlights

•  Be More Aggressive on Energy Efficiency and Conservation

•  Place More Focus on Community-level Projects and Plan for Increased Development of Small-scale Renewable Projects

•  Continue to Engage Communities! Examine the Potential Benefits of Increased Private Sector / Community Involvement and Investment in Energy –  Provide improved training opportunities for people in smaller

and more isolated communities to service and repair infrastructure

•  Overall, “Affordability” was considered the most important objective – “Environment”, “Economy” and “Energy security” were ranked fairly closely together, being second, third and fourth

North Slave Low Water

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North Slave Low Water

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01-Jan 01-Feb 01-Mar 01-Apr 01-May 01-Jun 01-Jul 01-Aug

Snare Inflows m3/s

2013 2014 2015

0

20

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60

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120

1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Flow

(m3/

s)

Snare Flows 1984-2014

Historical Water Flows

Response

•  Expressions of Interest – private sector proposals? •  North Slave System Resiliency (from the 2014 Charrette)

–  Evaluate a range of options: solar, biomass, wind, hydro enhancement options, batteries

–  Options for enhanced monitoring, hydrological forecasting models

–  Options to avoid rate shock: a low water fund?

•  With our high costs and energy supply challenges, the NWT is prepared to look at all options.

Wind - Diavik Mine Project

Hydrokine>c  Turbines  

Eagle  Hydrokine/c  River  Turbine  Project  (Denali,  Alaska)  

Fort  Simpson  Hydrokine/c  River  Turbine  Project  (Fort  Simpson,  NWT)  

Emerging  Technologies  

Altaeros  Energies  is  planning  an  18-­‐month  project  to  deploy  a  buoyant  airborne  turbine  (BAT)  wind  generator  1,000  above  ground  in  Alaska    

Summary: Policy Response

•  All communities should have a comparable level of access to affordable power. “We’re All In This Together”

•  The incremental costs of renewable and alternative energy projects should not be borne by the rate base.

•  Continued emphasis on partnerships will increase the renewable energy sources integrated into community energy systems.

•  With regard to heating, more needs to be done, and communities and the private sector could play a key role.

•  With regard to electricity, we need to do more. A question to be addressed in the 18th Legislative Assembly: –  To continue the effort to integrate renewables in NWT microgrids,

should it be a public utility model or should we move towards 25 government-funded community energy companies?

Energy Strategy (1980)

“A Strategy Paper for the Achievement of Reasonable Prices and Energy Self-Sufficiency”

•  High energy prices: “the NWT’s energy problem is very real and of dangerous proportions and can no longer be accepted without heavy penalties to our future economic growth”.

•  Energy prices “create a financial burden of oppressing proportions”.

•  An “aggressive attack” was required on two fronts: Energy Conservation and Local Sources of Energy Supply, including wind, water, wood and coal, natural gas, nuclear (“wait and see”) and peat.

Energy Strategy (1980) cont’d

•  Large projects: Hydrocarbons and hydro development – “a 2,000 MW hydro project on the Slave River is being considered by the Alberta government. The environmental impact on the NWT is considered minor. There will be little effect on the Slave River Delta”

•  “Subsidies should be viewed as short term measures, lasting only as long as it takes to bring about the solution to the underlying problem”.

•  $23,180,000 in subsidies in 1980-81 – Power Support Program ($1.5M) – Home Heating ($350k) – PPD ($4.5M) – Electricity, non-government customers do not pay full cost ($1.85M) – Public Housing ($13.6M), Municipal Energy ($1.43M)

Western Great Slave Lake T-Line Study

Conclusions

•  WGSL technically feasible at 240 kV

•  Business case analysis relied on average cost of $1.26 Billion

•  Build out requires $400M Grant and $647M GNWT financing (assumes that new customers come on stream after the existing diamond mines close) to proceed and provide modest savings to all customers

•  Feasibility spend of $350K has better defined cost scope and schedule for WGSL

•  Required investment is beyond GNWT fiscal capacity