The GTM Research Roundtable gives Squared members insight into our analyst team's thoughts in off-the-cuff internal discussions and debates on news from solar, grid and energy storage markets.
Olivia Chen GTM Research: Analysts, in Ontario's Long-Term Energy Plan, connecting the remote northwestern First Nation communities is identified as a priority for the region. It was recently announced that a consortium of 22 First Nations communities, Wataynikaneyap Power, and partners will execute a project to build 1,800 kilometers of transmission lines across the region. The total cost is projected to be C$1.35 billion, and will eliminate the need for the communities to rely on expensive diesel generators for their basic needs.
Regulators and utilities often consider locally deploying renewables and microgrid systems to serve off-grid remote communities as an alternative to massive T&D infrastructure spend. What do you think their reasoning is to have chosen to invest in such a costly project?
Daniel Finn-Foley Senior Analyst, Energy Storage Research: Ontario’s Long-Term Energy Plan specifically mentions on-site alternatives for remote communities, but this doesn't appear to be a focus for this project. Because Wataynikaneyap Power is made up of 22 First Nations communities, each an equal owner, it's likely the partnership offers them more leverage when partnering with private-sector companies. This could make a transmission line the most cost-effective solution, rather than approaching it on a community-by-community basis.
Brett Simon Analyst, Energy Storage Research: Australia took a different approach. The Regional Australia Renewables (RAR) Initiative, initiated in 2013, offered funding for projects incorporating renewable energy generation in off-grid and fringe-of-grid areas with unreliable electricity supplies, and energy storage was implemented in several projects funded by the program. This type of initiative could provide valuable results for Ontario, as implementing renewables-plus-storage may end up being cheaper, and perhaps even more reliable, than expanding T&D infrastructure to these remote regions.
Northern Canada could present some interesting cases for renewables-plus-storage. A significant portion of inhabitants in these rural regions are either entirely disconnected from the main grid or have weak and unreliable grid connections in both nations. As a result, these communities rely on diesel generators for electricity. However, diesel-generated electricity in these types of applications can be quite expensive, given that the diesel fuel itself needs to be transported into these rural areas.
Omar Saadeh Senior Analyst, Grid Edge Research: The shift away from large transmission-line infrastructure investments and toward locally sited generation is also very evident in Alaska. Historically, the state’s remote communities have combined small-scale diesel, hydro and wind resources, relying heavily on dispatchable fuel-based generators to accommodate fluctuations in both power demand and variable production. Today, large federal- and state-supported grant and low-interest loan programs have further helped make investing in battery and microgrid technologies increasingly attractive. There’s real interest from Alaska’s municipal-owned utilities to deploy wind-plus-storage systems to meet growing local demand and state environmental targets.
Understanding that political interests have real influence over such investments, Ontario’s decision may also point to the province's longer-term objective to further develop utility-scale wind and hydro resources. Could this be a broader initiative to develop northern Canada’s grid energy resources?
Daniel Finn-Foley Senior Analyst, Energy Storage Research: One of the primary benefits cited on the website of Wataynikaneyap Power is that the region will be able to sell surplus renewable energy at utility scale: “[This project will allow] those communities with renewable energy projects to sell their clean power to the provincial grid, further supporting regional economic development.”
It seems to me that once a number of First Nations communities grouped together to create Wataynikaneyap Power, the die was cast for a transmission, rather than a distributed, solution. By partnering and owning the project together, the communities have the opportunity to take advantage of scale that they could not on their own, increasing the economic benefits of dropping diesel. The merits of this clearly are not lost on other local communities; the project is now a partnership of 22 First Nations communities, up from 13 when it was initially announced. They clearly see being on-grid as a benefit, and it will be interesting to see if this model of ownership appears in other areas where diesel generation is relied upon.