A massive geographic expansion of the Ontario power grid has begun, with the mobilization of work on the Pikangikum Distribution Line Project. The 117km distribution line, servicing the Pikangikum First Nation, is part of a much larger infrastructure effort to grid-connect Northern Ontario First Nations communities through the construction of 1800km of new and upgraded transmission lines.
This grid expansion aims to replace the diesel generation facilities in each of the communities, which are reported to be near the limits of their capacity, and have proven costly, unreliable, and downright unhealthy for the local residents. An analysis conducted by PricewaterhouseCoopers LLP (2015) indicates a substantial economic upside to the $1.15 billion project, of approximately $3.4 billion in avoided costs over a 40-year period beginning in 2021. In addition to the straightforward economic advantage is a host of other benefits, as the reliably delivered power acts as a catalyst for greater prosperity and economic self-determination for the communities.
Last Friday, Natural Resources Minister Jim Carr, announced $220 million towards initiatives to reduce the reliance on diesel fuel in Canada’s rural and remote communities. Since more grid expansions like the Wataynikaneyap Project could be considered for part of this initiative, ARI thought it would be interesting to compare the technical and economic parameters of this particular grid expansion against the 2018 capabilities and economics of microgrid technologies; solar + wind + storage.
To perform such a comparison, ARI has applied one of the most useful tools in our suite of analysis software; HOMER Energy Pro. HOMER is an ideal program for the rapid evaluation of microgrids, as it simplifies the evaluation and automates the optimization of the microgrid design. HOMER users are able to quickly define the desired system and control method, include economic parameters, and add operational constraints to the project (e.g. minimum amount of renewable capacity, minimum capacity shortfall, etc.). The results of the optimization are ranked based on the lowest Net Present Cost: the present value of all the costs of installing and operating the system over the project lifetime.
Lacking ideal temporal data, a design analysis was commenced using HOMER’s generic community load profile. The community load profile was selected to represent the average electric loads of a representative community. The magnitude of the peak load and the annual energy consumption of a representative community were taken from reports from Hydro One Remote Communities Inc (HORCI).
With a load profile established, a microgrid can be evaluated by HOMER to establish the economics of various system configurations. A key decision is to determine what generation sources would potentially form such a microgrid. With a goal of reducing diesel consumption and enabling right-sized renewable generation, the following components for the microgrid were selected: a solar array (designed with Helioscope), an Enercon 2MW turbine, and a generic Lithium-Ion battery. Also included, but reduced in size by 40%, was the existing diesel generation capacity to act as an emergency backup power resource. The purpose of the HOMER simulations is to evaluate the strengths of the various generation sources, and suggest system sizing that can best achieve the stated goals. Apricity was interested to see when remote communities may be good candidates for microgrids as an alternative to traditional wires solutions. For each component the following key design parameters were identified:
- CAPEX (including equipment AND development costs),
- replacement CAPEX,
- and ongoing OPEX
These were defined as key values using the most up to date 2018 information reported by Lazard’s LCOE and LCOS reports.
With all the system variables defined, HOMER was now set to proceed with calculation of the “optimal" system based on Net Present Cost of the microgrid components. The resulting optimal system was found to be: