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Journalist Markham Hislop interviews leading energy experts from around the world about the energy transition and climate change.
Welcome to episode 311 of the Energy Talks podcast. I'm energy and climate journalist, Markham Hislop. Unless you're a power grid engineer, you probably have no idea how radically modern grids are being transformed by new technologies. I report extensively on this story and I can't keep up. In episode 269, I interviewed Gerhard Schlage, who's the chief technology officer for Hitachi Energy, about how this new tech could be harnessed to integrate much more wind and solar generation, while creating a modern, more flexible, and resilient grid.
Markham:Today I'm speaking with Omar Ossorio from Hitachi Power Grid about renewable energy projects in Northern Alberta, Indigenous Communities, Fort Chipewyan, and Old Crow, in Alberta. These are remote northern communities that have to fly in diesel fuel for generators, and they're eager to ditch the expense and the greenhouse gas emissions. Are there lessons to be learned for southern Canadians? Welcome to the Energy Talks, Omar.
Omar:Thank you very much, Mark. I'm happy to be here.
Markham:You're an expert on grid technologies, and maybe that's where we should start. I I've heard, virtual power plants, grid enhancing technologies, reconductoring transmission lines so that they can carry a lot more electricity, digital controls, power electronics. It's really a dizzying array of of new tech that is now coming into this particular market. Can you give us kind of your take on it and how it it applies to, you know, modern power grids? Yes.
Omar:For sure, Malcolm. Thank you. Well, definitely, this, this type of technology is quite interesting. We have been working, for a while on on on solutions with, with many utilities and and remote in remote communities. Well, it's a technology that that that is providing a lot of prosperity to the to the communities, remote communities, especially.
Omar:We talked about specifically microgrids. In this case, in remote communities are basically the name says says it all. It's just, it's just a bunch of generating devices connected to the a very smaller, transmission distribution grid serving that isolated purpose. And, the technology that that that Hitachi Energy has been, providing as technology supplier or partner is that, providing that, benefits to remote communities with green power and hybrid solutions.
Markham:Is this technology it's been around for a while. I mean, it's not like, all of this technology sort of sprang out of the the ground a couple of years ago. But it seems it's the extent to which it's being integrated into power grids or supplement power grids in the case of micro grids. It's the degree to which this is happening, and I watch down in the United States, and they're busy. Their government programs to support these technologies, their utilities and rural, sorry, regional transmission organizations, FERC, their national regulator.
Markham:I mean, everybody is focused on these to make the most to shift to a clean energy, infrastructure and to build it out even though it's extraordinarily expensive, but this seems to be the way that the world is going. And is what exactly, aside from microgrids, and I would presume wind and solar generation, what other technologies would northern communities benefit from when they decide to go down this path?
Omar:Correct, Markham. That's a good point. The the the purpose for microgrids in remote communities differ a bit from, from, let's say, microgrids or or grid connected microgrids in, in more developed, regions. Differ in a way that you have very limited access, to the communities. You have a lot of challenges, geographically challenges.
Omar:You have logistic challenges. You have, cultural aspect as well that, that is quite important in this type of community. So, the road map or the life cycle for these projects are longer than any other project that you might see. As we grow in in in globally with a distributed, generation, we need to start connecting all of these remote communities eventually. And the the way to get that is starting from from the source, promoting these microgrids at the community level, and eventually start thinking about, connecting them to the the broader grid.
Markham:There, a few months ago, I interviewed a fellow who is leading a, community solar initiative. It's fairly small, only 5 megawatts of generating capacity, but it's up in the Peace River area, which kind of straddles the British Columbia Alberta border. And one of the things that he mentioned is because this was a community endeavor, there was a lot of community consultation and a lot of community buy in that took a fair amount of time. And then we contrast that with the the conflict, in southern Alberta, southern and central Alberta, over wind and solar projects that led the Alberta government to first declare a moratorium on wind and solar, new wind and solar, and then to put in a soft moratorium with a bunch of rules that will, that will, kill some of those projects. And the point I'm I'm getting at here, Omar, is that the project in Peace River had a lot of community consultation and buy in, and not only did it go relatively smoothly, but expansion and other projects will be able to go smoothly because they already did their homework.
Omar:Mhmm.
Markham:And I don't know this for certain, but I suspect that the wind and solar developers who were affected by the government's moratorium didn't do the same level of consultation, didn't get the same level of buy in. And I see what's going on in these, you know, like Fort Chipewyan and Old Fort. It takes longer, but once the community says, yeah. Okay. We're in on this.
Markham:You've we've talked to you and we were comfortable with this, then it just makes everything smooth much smoother and more likely to be successful.
Omar:Mhmm. That's right. They mentioned, before, Markham, the these grids in microgrids in remote communities are quite unique. When you talk about introducing wind and solar power generation that will offset the the diesel consumption, It's always attractive to to the communities. It it it catches their attention because of, the environment where they these communities are, the wildlife, environment, the cultural part, the heritage, the the multigenerational aspect of, of these communities, towards a greener future.
Omar:Yes. It it has higher impact than than than other regions. And, to introduce not only the the solar or the wind component, but also ways to store that energy, that can be provided in, let's say, on rainy days or cloudy days or no wind days, that's the other added value on on the solutions that that we're trying to promote in these communities.
Markham:Yeah. Energy storage has, really come to the fore in the last couple of years, and usually we think of it as BES, battery energy, storage systems. And the very, very large ones were I I can't remember. I've seen many, many announced that come through my inbox that are in the 250 megawatt, capacity range and and some that are even much larger than that. But is the tech is the storage technology now, small enough and economic enough to work with microgrids, especially in in Northern communities?
Markham:Because we know that with, intermittent generation like wind and solar, that we there needs to be a lot of storage in that grid. And if you've got a microgrid, that makes it even more compelling, I think. So, where is, what are the economics of the storage here, and how how did that all work?
Omar:Yes. That's a very, very key point, Mark, among, that you bring up. Technology is a big factor. As as you know, technology changes and evolves continuously. So the technology that needs to be deployed on these systems or these solutions has to be a proven technology, tested, run through many years.
Omar:So so it can be deployed in confidence. The challenges that we see is that, there's new technology, new chemistries being brought up into the picture that that, we would like we kind of say that create a little bit of noise in in in the process. And this is where the cultural aspect, the the the engagement with communities and the utilities that are directly involved on on these projects. How how can we work together, educate, the path of, of this technology life cycle and and put it into into action? Do we see we see that that situation, going back to your point about, small communities or small base versus large, utility, scale, base battery energy storage systems.
Omar:As the technology evolve, there are solutions that are actually scaled down and can be scaled up depending on on megawatt or kilowatt systems. So solutions are out there, quite a a bit of players in this market. We we we proudly say that our solution can be scalable from from the small kilowatt generation or or best, all the way to largest scale utility, utility base, battery energy storage system. So technology is scalable, and technology has evolved in in that matters that can serve, the 2 those two purposes.
Markham:What can you tell us about the 2 projects we're discussing today, Fort Chipewyan and Old Crow? What were some of the, the challenges that you were faced with, and, how did you overcome them?
Omar:Yes. For sure, Malcolm. Let's talk about Fort Chipewyan. This project is, the the town of, Fort Chipewyan is actually in north, east of the province of Alberta. It's a community that, is not connected to the main Alberta power grid and is host of, about 1200 people in the community, first nations.
Omar:These communities used to rely on diesel generators for for power. And, as you can you can see because of the remoteness of of this, location, there's a quite a large footprint for for the diesel, transportation, storage, and just burning, the diesel. So, in addition to that, the this, community has only access through winter roads, only 6 weeks per year. There's a road that actually trucks can go through and transport the the diesel. So the community, identified that need to to become a greener or or a bit more sustainable, and environmentally friendly.
Omar:So partnering with a local utility that is providing, and and maintaining the power generation there, the project was developed. So there was a a an a phase that introduced solar panels. There's a PV, farm, and, eventually, it it addition or added a a phase 2, which consisted on on a battery, energy storage solution, created this, green microgrid. So now the community is, it has this hybrid system with the diesel generation, together with PV and battery energy storage. So that's that's basically the the overview of 4 chip away.
Markham:So if I understand this correctly, then the, the diesel would be used in situations where the, you know, they're fairly far up north. So in the wintertime, they wouldn't get a lot of sun. So you'd need diesel then. But, otherwise, the it runs on the solar, when there's enough sunlight to power it. The well, I was interested in your comment that the a local utility manages the microgrid.
Markham:Can you tell what can you tell us about this local, utility? Like, who owns it, and where did the technical expertise come from, in that utility to be able to do all this work?
Omar:Yes, for sure. And this is a joint kind of a joint, effort between between, of course, the first nations group, the town, the the local utility in this case, being ADCO, ADCO Electric, and the technology partner, which which we we were grateful to to participate as as such. ATCO is, the utility that would, own and operate this, system on behalf of the First Nations community or the entity that that legally got into an, power purchase agreement with with ATCO. So this is how the the the the financial kind of, layout is for for power purchase.
Markham:So if I can if I can just summarize, make sure I understand this correctly. There's a joint venture between ATCO, which is a very big, Alberta based private, like, investor owned utility. They get into a joint venture with the Fort Chip 1 community, presumably through their development corporation, and that they then form a low a local utility. They bring in Hitachi Power Grid as the as the technology partner, And then the all of these projects are are constructed, and then there is the local utility has the expertise presumably coming from ATCO, to begin with, at least, to run all to run the system and repair the system and do what what needs needs to be done. I see you nodding your head, so I'm gonna assume that I've I've got it correct, and that's the the the setup.
Markham:Is it the same setup at old Crow?
Omar:The setups are are, pretty pretty much similar, and the way they they are I mean, you you you were you were you're right, Mark, on on presenting the the the framework for for this, power purchasing. The utility, basically will own and operate the the asset on behalf will operate the asset on on behalf of of the the legal entity at this town. So first nations group have to create, a legal entity that will will have actually that power of negotiating with a utility for the power purchase agreement. So that's right. It it is in a similar fashion in Old Crow where there's a there's a consortium of of, of 3 indigenous groups created a company that negotiates the contract with the utility.
Omar:In that case, being ATCO Yukon in Old Crow?
Markham:First Nation owned development corporations have been around for 40 years, and they're over those that time, they've become more and more popular. They're a very, good way for the community to, create economic activity in their local economy because the you know, when they're doing a joint venture with the trucking company or utility or whatever, you now have the expertise to do this, but a big part of these kinds of projects is always the transfer of management skills and expertise to the to the First Nation community. You you, you know, there are youth training programs or there are there are mentorships or internships, those kinds of things. Is are these projects structured so that at some point down the road there will be enough trained people in the community to take over, the management of day day to day management of of the system from the from ATCO?
Omar:Yeah. I think eventually, it will get to that, that situation where the these entities will be more skilled and prepared to manage these type of projects as they grow. These communities benefit from these solutions, in a way that, there's more jobs, there's more skilled work or jobs available, And eventually these communities will start growing and, and that will will create the need for additional power. So how that's how the communities will grow. And again, touching the the multi generational aspect of of, of the technology being deployed.
Omar:This technology and these solutions need to last
Markham:They, for long. Right. Final question, Omar. We'll have to wrap up the interview. Tell us how successful the the projects are and maybe some of the road bumps, that they that they've encountered.
Markham:And I assume they're successful, but maybe they're not. Have there have there been any pushback, any any mistakes, errors, that sort of thing?
Omar:Yes. The answer is yes, Mark. We're checking all the all the boxes above. Definitely, is is any project has its ups and downs. There there's there's a lot of challenges.
Omar:The benefits or or and I can talk about both projects. The benefits are are pretty much similar in a way that there's an offset on the on on diesel consumption. There's reduction of diesel consumption. There is also, something called the beautiful sound of silence when you have diesel generators not running for for quite a long time, of the of the year. And and that basically for the the communities is it's a gain.
Omar:It is a success. So job creation, there's, of course, revenues that come into place for the 1st nations communities, through the contracts with the utilities, the c o two emission reductions, air quality, less environmental risks. It's quite a lot of, benefits, and those pro both projects had similar benefits. Challenges depends on the geography of the projects. They have their their very specific and unique situations.
Omar:And, yes.
Markham:Great. Omar, thank you very much for this. I'm I'm very interested in what happens in remote communities, what happens in small rural communities, in rural regions, because it seems to me that while we spend a lot of time talking about power grids, you know, what's happening at utility scale, how are we going to build transmission, How are we going to afford to build all of this new generation and so on? We also forget, it it seems like distributed energy resources have kind of dropped off the the conversation. We don't talk about them nearly as much as we did 2, 3, 4 years ago.
Markham:And it seems like there's a lot of savings to be had, a lot of a lot of advantages to have to taking the the route that the 2 indigenous communities did in terms of building their own generation, building their own micro grids, and so on. So interesting conversation. Thank you very much for this. Appreciate it.
Omar:Well, thank you very much, Markham, for the time.