This article originally appeared on the Pembina Institute website. Reposted with permission.
Every year, over 90 million litres of diesel are shipped by truck, barge and air to remote communities in Canada to power their local energy systems. But the growing economic cost and environmental impact of importing such vast amounts of diesel to these communities are unsustainable. This month, 150 people converged on Yellowknife to discuss how renewable energy sources can be integrated into these small power systems — not only to reduce diesel fuel use, but also as an opportunity for local economic development and instilling a renewed sense of pride in community.
So what are microgrids?
Microgrids are essentially “small power systems” that fully meet local electricity needs. In a remote community, a microgrid provides residents with the same access to electricity that Canadians enjoy while living “on the grid,” but with some extra challenges. Remote microgrids are small and hard to access to by road, often only available for a few winter weeks per year, and must operate year-round without failure in remote, and often harsh, environments. Most electricity is now generated from diesel fuel, but renewable energy sources — sun, wind, water and earth — are increasingly cost competitive alternatives.
The second biennial Renewables in Remote Microgrids (RiRM) conference was organized by the Pembina Institute and hosted by the Government of Northwest Territories. Participants included 25 First Nation community representatives; research institutions; all levels of Canadian government; U.S. government (federal and Alaska); utilities; technology, engineering, extraction, and manufacturing firms; project managers; and environmental non-profits.
At the first such conference in 2013 in Toronto, participants discussed technical solutions to integrating more renewable energy sources into remote microgrids. Since then, technology has been maturing at a rapid pace, but the policy and community capacity to support implementation have lagged behind. Some excellent examples of communities that have or plan to develop community energy plans exist, but complete reliance on diesel fueled energy systems remains the norm. The 2015 conference addressed the systemic barriers to implementing community energy projects, using a systems change framework developed by MaRS’ Solutions Lab and Advanced Energy Centre.
The approach gave participants a template to share stories of perseverance —celebrating both success and failure — to understand non-technical barriers to implementation. Companies walked away with new market opportunities in Northern Canada, community members and project champions were inspired by peers to raise ambitions for their own projects, and government and utilities got new program ideas to address barriers to success.
Local capacity and benefits for communities
Success depends on local capacity for energy projects, and how the needs of communities are addressed. Programs showing good results are already offered in some northern jurisdictions and may serve as models for others. In Ontario, the IESO offers an Education and Capacity Building program. B.C.’s Coastal First Nations Great Bear Initiative’s Energy Facilitation program provides coastal communities with support they need to develop their own energy plans through peer discussions, design charrettes, and developing local capacity to carry out projects. In the Northwest Territories, the Arctic Energy Alliance offers facilitation and funding support. Lastly, the Alaska Energy Authority shared its community-based project management model.
Policies that enable financing are those that reduce investment risks
Affordable and accessible financing is critical for remote energy projects. Today, most community energy projects are financed with government grant money. However, a sustainable financing mechanism that goes beyond grants is needed. Power Purchase Agreements should reflect the true cost of energy in remote communities. Permitting processes must be streamlined, and projects should be supported throughout development, construction and operation (including maintenance). This will reduce investment risk and maximize community benefits.
Technology solutions are leap-frogging necessary institutional changes
The pace of technological advancement in renewable energy and microgrids is faster than utilities, governments, and communities can react. Projects already on the ground should be driving policy and demonstrating positive effects on local capacity. Technology — when properly deployed — can also reduce investment risk and increase community benefit. Examples include modularized plug-and-play systems and standardized technical designs. Governments can help by supporting developers with best-practice project execution that mitigates the risks of working in remote regions with harsh, unpredictable environments.
Building momentum on remote microgrids
The detrimental effect of climate change on the local environment and northern way of life is compounded by the volatile and rising costs of energy. Following the release of the Canadian Energy Strategy in July 2015, the Pan-Canadian Task Force has been announced to reduce diesel use in remote communities. And to many First Nation, Inuit and Metis communities, reducing diesel fuel use is consistent with their traditional way of life — using local resources and protecting the environment for future generations.
With 150 people convening in one space and sharing stories of success, the hunger and appetite for solutions was obvious. The insights — and there were many — from this conference were food for thought for participants and reconfirmed a common need to build momentum. Our next steps are to connect sectors and drive a discussion that will lead to policies and programs that will help renewable technologies replace diesel fuel use in remote communities. At the next RiRM conference in 2017, we hope to see quicker and more streamlined technology implementation, and more low risk remote energy investment options, bringing the benefits of the new microgrid back to the communities that they serve.