Canada’s Opportunity for Wind Energy in Northern and Remote Communities

1. Canada’s Opportunity for Wind Energy in Northern and Remote Communities CanWEA Presentation International wind diesel conference Girdwood, Alaska Emilie Moorhouse, Emiliemoorhouse@canwea.ca March 9th, 2011 Wind: Canada's infinite source of clean energy.

2. CanWEA and Small Wind • About CanWEA • CanWEA has more than 420 members, most of whom are focused on utility-scale wind • Small wind committee guides activities, includes manufacturers, installers, service providers … • How we see small wind: • 300 kW and under • ½ of manufacturers in the 30-50 kW range are Canadian • Small wind market is now where utility wind was 10-15 years ago • There is an opportunity to “not miss the boat” on manufacturing • Comfort with small wind breeds comfort with utility-scale wind

3. CanWEA Small Wind Manufacturers • Canadian-based: • WES Canada (80 kW, 250 kW) • Endurance (5 kW, 35 kW, 50 kW) • Seaforth (50 kW) • ReDriven (3 kW, 5 kW, 10 kW, 20 kW, 50 kW) • Cleanfield Energy Corp. (3 kW) • U.S. based: • Bergey (1 kW, 1.5 kW, 10 kW) • Northern Power Systems (100 kW, 2.2 MW) • Earth Turbines Inc. (2.5 kW)

4. Wind Energy in Canada 2010

5. CanWEA’sWindVision 2025 20% of Canada’s electricity demand to be met by wind energy by 2025 Opportunity: Canada has a massive high quality wind resource, a large hydroelectric base, green energy export potential and a solid industrial manufacturing base Impacts: 55,000 MW of installed wind capacity covering only 1/5000th of Canada’s land mass Minimum $79 billion investment in Canada Creates minimum 52,000 new jobs Reduces GHG emissions by 17 Mt CO2 annually

6. What About Northern and Remote? • Demand is there: • 300 northern and remote communities; 200,000 people • Electricity is expensive and polluting: • Communities can pay up to $1.50 per kWh (often subsidised) • Significant air pollution, ground spills, limited local benefits • Technologies are there: • Experience in Alaska & Ramea demonstrate readiness of wind and wind-diesel hybrids • Expertise is there: • Canada has the experts, the technology and the institutions (e.g. WEICan)

7. So what is stopping us? • Very hard to displace an incumbent supply methods • Diesel generators are familiar, and fuel is highly subsidized. Bureaucratic funding models for diesel are well established • Utilities only willing to pay avoided cost of diesel at today’s prices, no willingness to factor in avoided cost of pollution (spills, etc) • Have not been able to get “critical mass” • Most projects have been for demonstration purposes, have not been maintained once initial funding was spent • Not enough emphasis on regional strategy • No recognition for wind’s benefits • 1 cent/kWh incentive for large wind introduced in 2002 was the catalyst that Canada needed to develop big wind – ran for 8 years • Not a single northern and remote wind project from this program • So, what do we need?

8. Northern and Remote Wind Incentive Program (NoRWIP) • Collaborative development: • Led by CanWEA in consultation with communities, ENGOs NRCan, INAC, utilities, provincial/territorial governments • Has been part of CanWEA’s main budget “ask” to the federal government • 2011 it is the main ask from the Federal budget • Incentive that recognises characteristics of northern and remote communities: • Higher cost than southern wind projects • Lower capacity factors • Design influenced by many other “lessons learned”, especially those in Alaska

9. NorWIP Design • Recognises that there are (at least) two project types: • Large communities and mines with medium energy costs – 6 projects that are 2 MW or higher • Small, remote communities with extremely high energy costs – 20 projects averaging 300 KW • Recognises that we need to build critical mass: • Program first targets leader communities (“hubs”) to build capacity and gain early successes • Program then spreads to other surrounding communities (“spokes”)

10. NoRWIP Design (cont.) • The incentive: • $250,000 capital grant upon completion of feasibility study • For large northern communities and industrial facilities (mines): • Capital contribution of up to $1,000/kW, or 20% of project budget • For small remote communities: • Capital contribution of up to $4,000/kW, or 30% of project budget • CanWEA initially advocated for a production incentive over 18years, but appears too burdensome for bureaucracy/fiscal management

11. Costs and Impacts • Total cost of $63 million over 5 years • Direct Impacts: • 26 new wind energy projects (47 MW of capacity) • $500 million dollars in total diesel fuel savings • 8% of demand of elec. of remote communities met by wind • 80 kilotonnes of CO2 emission reductions per year, equivalent to taking more than 26,000 cars off the road; • Indirect impacts: • Foster the development of Canadian wind turbine technology and expertise in wind-diesel applications • Assist remote communities in diversifying their energy supply and stabilizing electricity prices • Support goals of Arctic Sovereignty Strategy

12. Support for NoRWIP • Communities, First Nations & Aboriginal Groups: • Inuvialuit Regional Corporation, Inuvik NT • Tuktoyaktuk Community Corporation, Tuktoyaktuk NT • Beaufort Delta Regional Council, NT • Town of Inuvik, Inuvik NT • City of Yellowknife, Yellowknife NT • Hamlet of Ulukhaktok, Ulukhaktok NT • Hamlet of Sachs Harbour, Sachs Harbour NT • Ta’an Kwäch’än Council, Whitehorse YK • Vuntut Gwitchin First Nation, Old Crow YK • Tr’ond”ek Hwëch’in Government, Dawson City YK • Ka:’yu:’k’t’h/Che:k:tles7et’h First Nations, Kyoquot BC • Dease River First Nation, Good Hope Lake BC • Centre for Indiginous Environmental Resources, Winnipeg MB • Keewaytinook Okimakanank Chiefs, Fort Severn ON • Village of Inukjuak, Inukjuak, Nunavik QC

13. Letters of Support for NoRWIP (cont.) • Governments, Utilities and Industry: • Yukon Energy • Government of North West Territories • Government of Nunavut • NGOs: • Mining Association of Canada • Ecology North, Yellowknife NT • Arctic Energy Alliance / City of Yellowknife, Yellowknife NT • David Suzuki Foundation, Vancouver BC • Yukon Conservation Society, Whitehorse YK • Pembina Institute, Edmonton AB • One Sky Institute for Sustainable Living, Smithers BC

14. Provinces interested in wind-diesel • Certain provinces expressing interest in developing wind diesel: • Hydro Quebec looking to move forward on at least two wind diesel projects • Ontario expressed interest in a wind-diesel incentive program – however expressed need to work with Federal government on this • British Columbia considering a program for integrating renewables for off-grid communities Wind: Canada's infinite source of clean energy.

15. Summary • “Utility wind” has a bright future in Canada • Many opportunities, but we’re playing “catch-up” • Opportunity for northern & remote wind even greater • Canada has “perfect hand” of need, technology and expertise • Opportunity to access growing market in Canada and overseas • Many challenges in getting at this opportunity • Dealing with an incumbent generator and bureaucratic inertia • Need to build momentum: “Go big or go home” • NorWIP is the catalyst: • Provides push that recognizes wind’s benefit • Relatively small amount ($63m) provides tremendous benefits

16. Opportunities for Collaboration • We need your help: • Alaska and International success stories need to be heard in Canada • Regional leaders to cross the border and see projects first hand to demonstrate technical feasibility and economic and social benefits of projects • Other opportunities for North-North cooperation? Wind: Canada's infinite source of clean energy.

17. Questions? Emiliemoorhouse@canwea.ca CanWEA Annual Conference: Vancouver, British Columbia, October 3-6, 2011 • Sessions on small wind and on wind diesel. Call for abstracts open until March 23rd - For more information please visit www.canwea.ca