DIVERGING FROM DIESEL: THE TRUE COST OF DIESEL POWER IN THE CANADIAN NORTH

Transcription

1 DIVERGING FROM DIESEL: THE TRUE COST OF DIESEL POWER IN THE CANADIAN NORTH

2 GWICH IN COUNCIL INTERNATIONAL (GCI) REPRESENTS 9,000 GWICH IN IN THE NORTHWEST TERRITORIES (NWT), YUKON, AND ALASKA AS A PERMANENT PARTICIPANT IN THE ARCTIC COUNCIL; THE ONLY INTERNATIONAL ORGANIZATION TO GIVE INDIGENOUS PEOPLES A SEAT AT THE DECISION-MAKING TABLE ALONGSIDE NATIONAL GOVERNMENTS. GCI SUPPORTS GWICH IN BY AMPLIFYING OUR VOICE ON SUSTAINABLE DEVELOPMENT AND THE ENVIRONMENT AT THE INTERNATIONAL LEVEL TO SUPPORT RESILIENT AND HEALTHY COMMUNITIES. About GCI

3 GOALS OF THE DIVERGING FROM DIESEL STUDY The study was undertaken to segment and measure the costs related to diesel electricity generation in these non-grid areas. These costs included: current utility costs; costs arising from the emission of Greenhouse Gas (GHG) emissions; and external social impact costs resulting from a reliance on diesel fuel.

4 Table 1: Summary of Fossil Fuel Costs in Northern Communities

5 ADDITIONAL COSTS OF DIESEL FUEL POWER GENERATION Reliance on diesel fuel has social impacts, notably arising from: Health and environmental risks associated with diesel fuel transportation; Health and environmental risks associated with diesel fuel storage; and Health and environmental risks associated with diesel fuel consumption for electrical power generation and home heating.

6 Table 1-1: Summary Utility Fossil Fuel Costs for Selected NWT, Nunavut and Yukon Off-Grid Communities Non Fuel Operating Costs Territory Reference Year Community Fossil Fuel (MWh) Plant efficiency (kwh/l); (kwh/m3) Fuel Price ($/l); ($/m3) Fossil Fuel Cost per Unit of ($/kwh) Average Overhaul Cost ($/kwh) Non-fuel O&M ($/kwh) Capital Component ($/kwh) Total Utility Costs ($/kwh) NWT Nunavut Yukon 2016/17 Inuvik - Diesel 16, /16 Inuvik - Natural Gas 11, /17 Tuktoyaktuk-Diesel 4, /17 Fort McPherson-Diesel 3, /15 Iqaluit-Diesel 60, /15 Cambridge Bay-Diesel 10, /15 Rankin Inlet-Diesel 17, /15 Baker Lake-Diesel 9, Old Crow-Diesel 2, Destruction Bay-Diesel 1,

7 Table 2-1: Estimated GHG Emission Cost of Fuel

8 Table 3-1: Comparison of Estimated Social Costs from Fossil Fuel Air Emissions (2016$CAD) All in CAD $, 2016 dollars D. T. Shindell (2015) - Climate & Health Impacts from wide range of air emission pollutants Diesel for Transport Natural Gas for Thermal Coal for Thermal Muller et al. (2011) - Climate & Health Impacts from specific air emission pollutants Oil for Thermal Natural Gas for Thermal Coal for Thermal NRC (2007) - Health and nonclimate impacts from specific air emission pollutants Natural Gas for Thermal Coal for Thermal Machol and Rizk (2013) - Health Impacts (US national average) from specific air emission pollutants Oil for Thermal Natural Gas for Thermal Coal for Thermal Total Social Cost, cents/kw.h CO2, cents/kw.h n/a n/a n/a n/a n/a CO2 % of total social 16% 30% 78% 31% n/a n/a n/a n/a n/a Other (patriculate matter & ozone precursors) cents/kw.h Other % of total social 84% 70% 22% 69% 100% 100% 100% 100% 100% Total Social Cost includes impact from carbon dioxide (CO 2 ), sulfur dioxide (SO 2 ), BC, nitrogen dioxide (NO 2 ), nitrogen oxides (NO x ), organic carbon (OC), ammonia (NH 3 ), methane (CH 4 ), carbon monoxide (CO) carbon dioxide (CO 2 ), sulfur dioxide (SO 2 ), nitrogen oxides (NO x ), two measures of particulate matter (PM 2.5 and PM 10 ), ammonia (NH 3 ), volatile organic compounds (VOC) particulate matter (PM 2.5 and PM 10 ), sulfur dioxide (SO 2 ), nitrogen oxides (NO x ) particulate matter (PM 2.5 ) and PM 2.5 precursors (sulfur dioxide (SO 2 ), nitrogen oxides (NO x )) Notes: 1. The estimates from D. T. Shindell (part 4) at 3% discount rate are converted from 2007$ to 2016$ using 2% inflation rate and converted from US dollars to Canadian dollars using exchange rate of $1.31CAD/$1US. Health impacts tend to dominate compared with climate damages. Cost impacts reflect average activities (e.g., major variances for different aged coal technologies and/or activity regions). 2. The estimates from Muller et al. (Table 2) for impacts in the US are inflated from 2000$ to 2016$ using 2% inflation rate and converted from US dollars to Canadian dollars using exchange rate of $1.31CAD/$1US. CO 2 emission cost impacts assume $7.4/ton of CO 2 (US$2000). 3. The average estimates from NRC (Tables 2-9 and 2-15) for the US are inflated from 2007$ to 2016$ using 2% inflation rate and converted from US dollars to Canadian dollars using exchange rate of $1.31CAD/$1US. Wide variances are noted around the mean value estimates for coal and natural gas plant emissions. The NRC document did not provide estimate for CO 2 air emission impacts. 4. The average estimates from Machol and Risk (Figure 1) are inflated from 2010$ to 2016$ using 2% inflation rate and converted from US dollars to Canadian dollars using exchange rate of $1.31CAD/$1US. This study provided a range for national average health impacts of +/-40% for coal generation and +/-46% for oil generation (no material range provided for natural gas generation). The study also showed wide variances in health impact values for thermal generation in different US states, reflecting variances in technologies (e.g., age of plants) and fossil fuel mix.

9 VALUE OF DIESEL POWER ALTERNATIVES This study indicates that there is substantive value to diesel power alternatives, because three kinds of costs are avoided: Current Utility Costs; Costs related to GHG emissions; and Human and ecological health social costs.

10 RECOMMENDATIONS Initiate a National Dialogue on full costing of diesel energy in Northern and remote communities to promote cleaner and more sustainable energy alternatives. Establish a Pan-Canadian Avoided Diesel Energy Value Methodology/Formula; which would be tailored to each jurisdiction and community in terms of metrics and actual costs. Implement Proactive Procurement Processes managed by regulators and utilities whereby Indigenous communities and project/technology partners can propose diesel fuel alternatives funded through revenue equivalency to the full avoided cost of diesel energy. Promote Collaboration on Off-Grid Innovations through a national platform that would profile project experiences, including the net economic impact of diesel alternatives introduced. Establish a parallel initiative to identify measures that would reduce energy demand in northern non-grid communities and support the identification and implementation of diesel energy alternatives.

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14 CONTACT Grant Sullivan Executive Director