Community Solar Farm The Journey Thus Far Presenters:

Transcription

1 Enoch Cree Nation Community Solar Farm The Journey Thus Far Presenters: Chase Morin Enoch Cree Nation, and John Kenney Urban Systems October 23, 2018

2 Thank-you

3 Our Story Enoch Cree Nation (ECN) has engaged Urban Systems to complete a Solar Farm Technical Feasibility Study to consider the options of developing, owning, and operating a large scale solar farm on reserve lands to advance the Nation s economic, environmental, and community development interests.

4 Getting Started The Big Picture Big Picture: Global climate change and international commitments to reduce emissions Revolution of energy generation technologies Decentralization of energy markets Closer to home: Alberta Climate Leadership Plan / Federal Plan Expect an investment greater than $10.5 billion and 7,200 new jobs Empowerment of Indigenous leadership in the energy sector ECN is working to meaningfully participate in this sector

5 Starting from ground zero Interest from within Enoch Cree Nation to be a leader in Alberta s renewable energy sector In 2017, ECN completed a Renewable Energy Options Analysis and Pre-Feasibility Study GOAL: understand what opportunities existed and whether or not they made any sense to invest in

6 Summary of Options Analysis Technology Resource Scenarios Considered Findings Wind Marginal 6 m/s at 80 m 6 MW 60 MW Likely not viable under the REP Solar Strong kwh/kw Small to large Likely to be viable business case (with grant funding) and need to be creative Biomass Most promising supply is agricultural and community wastes Displacement of community energy use Likely not viable due to low cost of energy (in particular natural gas) Geo-exchange N/A Displacement of community energy use Likely not viable due to low cost of energy (in particular natural gas) KEY FINDING: SOLAR PV APPEARS TO BE THE MOST OPTIMAL

7 Why Solar at ECN? Located in an area with a strong solar resource. Ample land and roof space on reserve to host large solar PV projects. Solar PV projects can be mobilized & developed relatively quickly to leverage available grant funding programs. Solar PV projects have a relatively straightforward regulatory approval process.

8 About Solar Farms Key components: 1. Solar panels (fixed) 2. Electrical infrastructure (inverter/transformer) 3. Switch gear 4. Meter 5. Distribution / transmission Site access roads

9 2018 Pre-Feasibility Study of 4 Project Scenarios Scenario 1: 1 MW Roof Top Mounted Solar on the RCRC Scenario 2: 5 MW RCRC Roof and Parking Lot Scenario 3: 10 MW Solar Farm at a Nation-Owned Site w/ power sold to an off-taker Scenario 4: 5 MW Solar Farm at a Nation-Owned Site w/ a direct connection to the RCRC

10 Outcome of the Pre-Feasibility Study Advance the development of a solar farm project with an Off- Take Agreement in partnership with the River Cree Resort and Casino

11 The Proposal/Recommendation 10 megawatt solar farm Approximately 40,000 panels Footprint of approximately 90 acres Generate 12,500+ MWh per year Enough power for approximately 1800 homes Approximately $1 million of power generated Development cost estimated to be $18.5 million

12 What does a 10 MW Solar Farm Look Like on the Land? Visually changes the landscape Noise is minimal Slight hum during the day Approximately meters (i.e. whisper) No night time noise, as solar farm is not operational Minimal opportunity for mixed use Last a minimum of 25 years

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16 5 Ingredients to Make a Large Scale Solar Farm Work 1. Site control 2. Interconnection to the power grid 3. Contract to sell the power 4. Permits and authorizations 5. Funding

17 Ingredient #1 Site Control Identified a number of sites of interest at Enoch Significant effort allocated to advancing a partnership with a Certificate of Possession holder, but fell through Selected a new site with great attributes! Actively working to complete site investigations and advance land lease arrangement Key Learnings: No site is perfect, and don t be surprised if the first site you pick isn t that one that ends up working.

18 Ingredient #2 Interconnection Renewable energy projects require interconnection with existing power system infrastructure Electrical engineering is complicated and existing utility have rigorous standards Preliminary assessments have proven to be positive for the Enoch solar farm Enoch is completing a detailed interconnection study to define interconnection requirements and costs Key learnings: Interconnection is $$$, the studies take a long time, but critical to a project s viability

19 Ingredient #3 Contract to Sell the Power Three key options: Option 1: Follow the heard and compete in the Renewable Energy Program (REP) Basic renewable energy economics not favourable to solar LCOE - Solar: $ / MWh vs Wind: $30 - $35 / MWh Option 2: Behind the Fence The Alberta Micro-Generation Regulation is great framework but need to have direct connection Land constraints Option 3: Leverage Alberta s unique and competitive power market Sell the energy to ourselves!

20 Summary of the Alberta Wholesale Power Market The market price for electricity is constantly changing, moving up and down throughout the year, month, week, day and even hourly How is the price set? The power pool represents the wholesale power market in AB Bid process where generators bid to sell power to the market This is overseen by the Alberta Electricity System Operator (AESO)

21 What is an Off-Take Agreement? An Off-Take Agreement can stabilize the power price for: The generator (i.e. solar farm) The customer (i.e. the Casino) But how? Negotiate a strike price that reflects interests of the generator and customer Enter a long-term contract (i.e. 25 year Off-Take Agreement)

22 Example: How it works in dollars and cents Plus RECs valued at ~$15/MWh

23 Why an Off-Take For Enoch Overall benefit to Enoch: Casino has a large power load Hedge both the solar farm and casino from external market conditions Support viability of solar farm and fix a major operational cost of the casino Aim to achieve profitability from RECs sold (e.g. Edmonton)

24 Ingredient #4 Permits and Authorizations The project we are looking to advance can be considered straight forward from a regulatory approval perspective Actively working to secure approvals from: Enoch Land Management Bylaws, Policies and Protocols Alberta Utilities Commission Environmental regulations (federal and provincial) Key Learnings Balancing aggressive project timelines, overall project definition and lead time for regulatory processes is challenging!

25 Ingredient #5 Funding The good news is, once we ve got the other ingredients together, Enoch will be well positioned to: Raise debt financing from lending institutions both traditional & non-traditional Leverage existing federal and provincial programs/grants Key learnings: Be proactive and strategically share your story. The money will come.

26 The Lifecycle of Most Renewable Energy Projects Identification Prefeasibility Approvals COD Project Definition Detailed Feasibility/ Pre-Design Design/Build Construction

27 The Plan for Getting it Built Finalize key site investigations Interconnection, environmental, noise, geotech, survey, etc. Detailed project costing and update business case Strike lease agreement and finalize off-take agreement Advance project funding/financing Submit regulatory applications Site plan / design Final investment decision

28 Summary of the Story So Far Understand your options and resources Be open to innovative and unique ways to advance projects Come up with a clear plan to: Secure land Proactively advance interconnection work Sell the power Advance permitting asap Attract funding

29 Thank you!

30 Backup Slides

31 Summary of the Alberta Power Pool - Simplified Scenario Assume a demand for 350 MWh of power at 7 pm tonight 3 companies (A,B, and C) are each able to supply 100 MWh of this demand (baseload), and two (D and E) that can provide 50 MWh of peaking power Companies A, B, and C submit their bid price for the first 300 MWh Company A - $40/MWh Company B - $50/MWh Company C - $60/MWh Companies D and E submit their bid prices for the peak 50 MWh Company D - $70/MWh Company E - $100/MWh AESO first selects Companies A, B and C (baseload) then selects Company D (the lowest bid) for the peaking demand Company D sets the power price for the entire pool

32 Business as Usual

33 The Model We Are Considering