Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
NOTICE
This document contains the expression of the professional opinion of SNC-Lavalin
ATP Inc. as to the matters set out herein, using its professional judgment and
reasonable care. It is to be read in the context of the agreement dated April 3, 2009
(the “Agreement”) between SNC-Lavalin ATP Inc. and the Nishnawbe Aski
Development Fund (the “Client”), and the methodology, procedures and techniques
used, SNC-Lavalin ATP Inc. assumptions, and the circumstances and constrains
under which its mandate was performed. This document is written solely for the
purpose stated in the Agreement, and for the sole and exclusive benefit of the Client,
whose remedies are limited to those set out in the Agreement. This document is
meant to be read as a whole, and sections or parts thereof should thus not be read or
relied upon out of context. SNC-Lavalin ATP Inc. has, in preparing the analyses
herein, followed methodology and procedures, and exercised due care consistent
with the intended level of accuracy, using its professional judgment and reasonable
care. However, no warranty should be implied as to the accuracy of information or
data provided. Unless expressly stated otherwise, assumptions, data and information
supplied by, or gathered from other sources (including the Client, other consultants,
testing laboratories and equipment suppliers, etc.) upon which SNC-Lavalin ATP
Inc.’s opinion as set out herein is based has not been verified by SNC-Lavalin ATP
Inc.; SNC-Lavalin ATP Inc. makes no representation as to its accuracy and disclaims
all liability with respect thereto. SNC-Lavalin ATP Inc. disclaims any liability to the
Client and to third parties in respect of the publication, reference, quoting, or
distribution of this report or any of its contents to and reliance thereon by any third
party.
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Executive Summary
On April 3, 2009 SNC-Lavalin ATP, Inc., and its subcontractor, McLeod Wood
Associates Inc., were awarded a contract to assess opportunities for building
economically viable transmission and distribution interconnections between remote
communities, renewable generation resources in Northern Ontario and Hydro One
Networks Inc. (HONI) facilities. The goal was to identify a program of extensions that
would involve as many communities as possible, while keeping the overall
interconnection cost low.
The existing load for the 24 remote communities studied is approximately 18 MW in
total, which is expected to increase to approximately 39 MW in the next 20 years. The
power demands of the communities are currently supplied by diesel generation operated
by Hydro One Remote Communities Inc. (HORCI) and Independent Power Authorities
(First Nations owned and controlled).
Five connection options (shown conceptually in Figures A to E) were reviewed as an
alternative to the existing diesel generation systems. Although both wind and hydro
generation resources were considered, it was determined that hydro generation
resources were the most easily developed and maintained. In particular, hydro sites
that are close to the communities are most likely to the first to be developed and
connected to the proposed system. Therefore, the transmission concepts shown below
assume some level of hydro development in step with increasing load over the 20 year
period considered in this study. However, this does not exclude the possibility of wind
power development at locations where favourable economic and technical factors
coexist.
Option 1: Isolated or independent supply systems (supplied by renewable sources to be
developed locally);
Option 2: Supply loops connected to the grid at Red Lake;
Option 3: Supply loops connected to the grid at Musselwhite Mine (MWM);
Option 4: Supply loops connected to the grid at both Musselwhite Mine and Red Lake;
Option 5: Supply arcs connected to the grid at both Musselwhite Mine and Red Lake.
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Independent
Supply Loop
G
G
G
G
G= Generation
resources
IESO-Controlled
Electric Power Grid
Fig. A: Option 1 - Isolated Supply Loops or Independent Systems
Supply
Loop
Red
Lake
E2R
Ear
Falls
IESO-Controlled
Electric Power Grid
Fig. B: Option 2 - Supply Loops Connected at Red Lake
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Supply
Loop
Musselwhite
Mine
M1M
Pickle
Lake
IESO-Controlled
Electric Power Grid
Fig. C: Option 3 - Supply Loops Connected at Musselwhite Mine
Supply
Loop
Red
Lake
Musselwhite
Mine
E2R
Ear
Falls
E4D
M1M
E1C
Pickle
Lake
IESO-Controlled
Electric Power Grid
Fig. D: Option 4 - Supply Loops Connected at both Red Lake and Musselwhite Mine
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Supply
Arc
Red
Lake
M1M
E2R
Ear
Falls
E4D
Musselwhite
Mine
Pickle
Lake
E1C
IESO-Controlled
Electric Power Grid
Fig. E: Option 5 - Supply Arcs Connected at both Red Lake & Musselwhite Mine and
Complemented by Radial Lines
Table A provides a high level comparison of the main factors influencing the cost of the
various optional configurations or solutions.
Table A – Influences of Various Cost Factors on Optional Configurations
Cost
Factor
Overall 115-kV
Length
Overall 44-kV
Length
Line
Maintenance
Transmission
Losses
115-kV
Substations
VAR
Compensation
Option 1
Option 2
Option 3
Option 4
Option 5
>1500 km
>1500 km
>1500 km
>1500 km
≈795 km
≈210 km
≈210 km
≈210 km
≈210 km
≈565 km
High
High
High
High
Moderate
Moderate
Moderate
Moderate
Moderate
Moderately
High
21
21
21
21
16
High
High
High
High
Moderate
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
In Table A, supply loops for Options 1 to 4 are 115-kV and directly connect 21
communities. For Option 5, 12 communities are connected by the 115-kV supply arc,
and 9 communities are connected via 44-kV radials. Sixteen 115-kV substations are
required for the Option 5 connections. For all options, the 4 communities southeast of
Pickle Lake (see Figure F) are assumed to be connected to the HONI power grid by 44kV radials. The cost of these radials and substations has been included in this study.
An assumption has been made that at some point in the future, the planned HONI 240kV line from Lake Nipigon to Little Jackfish will be extended to Pickle Lake. This will
enable the connection of these 4 communities.
A comparison of the factors impacting operational reliability of the various
configurations is provided in Table B.
Table B – Impacts of Key Reliability Factors on Different Configurations
Reliability
Factor
Option 1
Option 2
Option 3
Option 4
Option 5
Overall 115-kV
Length
Power Grid
Connection
>1500 km
>1500 km
>1500 km
>1500 km
≈795 km
None
At Red Lake
At MWM
Import/Export
Capability
None
Limited by
E2R capacity
Reserve
Generation
Capacity
Limited by power
demand of FN
communities
Limited by FN
demand &
E2R
At Red Lake
& MWM
Limited by
E2R & M1M
capacities
Limited by FN
demand, E2R
& M1M
At Red Lake
& MWM
Limited by
E2R & M1M
capacities
Limited by FN
demand, E2R
& M1M
Limited by
M1M
capacity
Limited by
FN demand
& M1M
Table C below brings together the cost and reliability aspects of different configurations.
Table C - Comparing Overall Cost and Reliability for Different Options
Key
Items
Option 1
Option 2
Option 3
Option 4
Option 5
Build Cost
Very High
High
High
High
Moderate
Very High
High
High
High
Moderate
Low
Low
Low
Relatively
High
Moderate
Operation &
Maintenance
Cost
Supply
Reliability
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
The most reasonable compromise between cost and reliability is offered by
configurations falling under Option 5, as they have moderate build and O&M costs and
can offer a relatively high level of reliability.
The Recommended Concept
Of the five possible configurations, Option 5, the option with the shortest transmission
length, as shown in Fig. F, is the one recommended in this study.
Bearskin Lake
Sachigo Lake
Kitchenuhmay
Wapekeka
Kasabonika Lake
Muskrat Dam
Wawakapewin
Sandy Lake
Keewaywin
Weagamow (NC)
Wunnumin
Kingfisher Lake
Nibinamik
Webequie
Bear Head Lake
North Spirit Lake
Neskantaga
Musselwhite
Deer Lake
115 kV
private line
Poplar Hill
Eabametoong
Pickle Lake
Albany River
Pikangikum
44 kV
private line
Little Jackfish
Red Lake
44kV
115kV
HONI 230kV
Hydro
Substation
Whitesands
Figure F – Recommended Concept (Option 5)
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Gull Bay
Wind Farm Tap
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
The recommended concept consists of a 115-kV backbone system approximately 795
km in length with 44-kV radial lines. Its backbone passes through 12 communities and it
connects an additional 9 communities via radial lines. The total estimated cost of this
concept is $321 million. It supplies all of the power demands of the indicated 21
communities up to and beyond the horizon year of 2029, while passing through regions
with high potential for hydro and mining developments.
As mentioned previously, a key assumption of the recommended configuration is that
the Hydro One planned 230-kV line from Lake Nipigon to Little Jackfish will be extended
to Pickle Lake at some point in the future, enabling connection of the four communities
east of Pickle Lake via 44-kV radials. In the absence of this extension, other
alternatives for connecting these four communities have to be considered. One such
alternative is the extension of the 115-kV backbone southward to include the
Musselwhite 115-kV private line and a 115-kV line segment connecting Pickle Lake to
Little Jackfish.
The report also discusses options for connecting the remaining three communities (Fort
Severn, Marten Falls and Peawanuck) to the power grid.
Pikangikum will be connected by a privately owned 44-kV line and is not included in the
cost analysis for the proposed concept.
Cost of Existing System vs. Recommended Concept
The annual cost of the diesel generation system will require continuous investment to
cover the increased demand on the system due to population growth and growth in
household demand. The difference in annual and cumulative costs favors the
construction of a transmission line immediately.
Over 20 years, the savings begin to appear between the two systems, totaling more
than $800 million. Over the 50 years modeled, the difference reaches a higher order of
magnitude exceeding $5 billion.
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Table D – Cost Comparison Summary
Supply
System
Annual Cost
(in Millions)
Cumulative Cost
(in Millions)
2009
2029
2009-2029
Diesel
Generation
$49.7
$109.3
$1,591.6
Recommended
Concept
$37.4
$30.2
$709.6
Next Steps
This section provides an overview of the suggested next steps for the project based on
the recommended concept detailed in this report. Since both the technical and cost
evaluations presented in this report have been done at a preliminary level, additional
follow-up analysis is required before any final decision can be made to move forward
with the proposed option.
Step 1 – Consultations with Interested Parties
•
Support or buy-in by the Off-Grid communities impacted, in order to move
forward;
•
Discussions with interested parties should be conducted to obtain technical
feedback on the transmission line concept;
•
On-going communications and/or preliminary consultations with First Nations
communities using the process outlined in Section 13.0 of this report;
•
Discussions with owner of private line at termination point at Musselwhite Mine
(Goldcorp Inc.); and,
•
Discussions with sources of funding to support more detailed analysis including:
MEI, INAC, FedNor, and potential transmission partners.
Step 2 – More Detailed Analysis
•
If the transmission line routing as presented in this report is accepted by
stakeholders, then a more detailed analysis should be conducted that would
include the following:
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
- load flow analysis that would test the system with up to 200 MW of
local generation development and increased mining loads;
- more accurate line routing and cost estimate;
- on-going and enhanced communications with off-grid communities;
- at the present time, no assessment has been made as to the
environmental impact of the proposed solution; some preliminary
study is required in this area.
•
If, as a result of discussions with stakeholders, other configurations or
modifications to the route are proposed, then these options could be assessed at
a high level to eliminate options that are not feasible.
Step 3 – Pursue Other Incentives and Financial Assistance
•
The Feed-in Tariff (FIT) Program could be used to make this project more
attractive by assisting in the development of the hydro resources required to
support this project.
•
HONI is looking at a radial supply to Whitesands and Gull Bay from the 230-kV
line at Little Jackfish. If this goes forward, the cost of Option 5 would be reduced.
•
Reduction of carbon footprint and carbon credits.
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
TABLE OF CONTENTS
Executive Summary
1.0
INTRODUCTION........................................................................................................................................... 1
2.0
SCOPE OF STUDY ........................................................................................................................................ 3
3.0
METHODOLOGY ......................................................................................................................................... 4
3.1
3.2
3.3
4.0
TECHNICAL ANALYSIS .................................................................................................................................. 4
COSTING APPROACH ..................................................................................................................................... 5
COLLECTION OF MAPPING INFORMATION...................................................................................................... 5
SYSTEM REQUIREMENTS ........................................................................................................................ 7
4.1
FORECASTED GROWTH AND ELECTRICITY DEMAND ..................................................................................... 7
4.2
GENERATION REQUIREMENTS ....................................................................................................................... 9
4.2.1 Existing and Future Power Supply System............................................................................................... 9
4.2.2 Potential Wind and Hydro Generation Developments ............................................................................. 9
4.3
TRANSMISSION SYSTEM REQUIREMENTS .................................................................................................... 11
5.0
STUDY ASSUMPTIONS ............................................................................................................................. 12
5.1
5.2
6.0
GENERAL ASSUMPTIONS ............................................................................................................................. 12
SPECIFIC ASSUMPTIONS .............................................................................................................................. 12
STUDY RESULTS........................................................................................................................................ 14
6.1
CONFIGURATION OPTIONS........................................................................................................................... 14
6.1.1 Characteristics of Option 1 .................................................................................................................... 15
6.1.2 Option 2 Characteristics ........................................................................................................................ 17
6.1.3 Option 3 Characteristics ........................................................................................................................ 18
6.1.4 Option 4 Characteristics ........................................................................................................................ 19
6.1.5 Option 5 Characteristics ........................................................................................................................ 20
6.1.6 Cost Comparison for Different Solutions ............................................................................................... 21
6.1.7 Comparing Reliability of Different Options ........................................................................................... 21
6.1.8 Recommended Configuration Concept................................................................................................... 22
6.2
RECOMMENDED TRANSMISSION CONCEPT .................................................................................................. 23
7.0
PROPOSED CONCEPT DETAILS............................................................................................................ 26
7.1
7.2
7.3
7.4
8.0
BACKBONE AND RADIALS ........................................................................................................................... 26
SYSTEM PERFORMANCE ANALYSIS ............................................................................................................. 28
UNCONNECTED REMOTE COMMUNITIES ..................................................................................................... 28
SYSTEM IMPLEMENTATION.......................................................................................................................... 29
COSTING THE PROPOSED CONFIGURATION .................................................................................. 30
8.1.1
8.1.2
8.1.3
9.0
9.1
Line and Equipment Cost Breakdown .................................................................................................... 30
Operation and Maintenance Cost Estimation ........................................................................................ 33
Transmission Loss Estimation................................................................................................................ 33
COST COMPARISON OF EXISTING AND PROPOSED SYSTEM..................................................... 35
HORCI SUBSIDY ......................................................................................................................................... 35
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
9.2
9.3
9.4
9.5
9.6
9.7
IPA SUBSIDY COSTS.................................................................................................................................... 37
UPGRADE OF DIESEL GENERATION ............................................................................................................. 38
OTHER COSTS ASSOCIATED WITH DIESEL GENERATION ............................................................................. 39
EXISTING SYSTEM COST SUMMARY ............................................................................................................ 40
FINANCING NEW FACILITIES ....................................................................................................................... 40
COST OF PROPOSED TRANSMISSION LINE VS. EXISTING DIESEL GENERATION ............................................ 41
10.0
REGULATORY IMPACTS......................................................................................................................... 44
11.0
RECOMMENDATIONS.............................................................................................................................. 48
12.0
NEXT STEPS ................................................................................................................................................ 49
13.0
PROPOSED PROCESS FOR COMMUNITY ENGAGEMENT............................................................. 51
13.1
13.2
13.3
13.4
13.5
13.6
PURPOSE...................................................................................................................................................... 51
KEY MESSAGES ........................................................................................................................................... 51
MESSAGE FORMAT ...................................................................................................................................... 51
SPECIFIC MESSAGE CONTENT ..................................................................................................................... 52
AUDIENCE ................................................................................................................................................... 52
SPECIFIC ENGAGEMENT STRATEGY ............................................................................................................. 52
APPENDIX A:
APPENDIX B:
APPENDIX C:
APPENDIX D:
APPENDIX E:
APPENDIX F:
MAP
TECHNICAL DATA
CONSULTATION CONTACTS
SUMMARY OF STATION COSTS
REGULATORY IMPACTS
GLOSSARY OF TECHNICAL TERMS
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
LIST OF TABLES
TABLE 4.1- EXISTING AND FORECAST LOADS ................................................................................................................. 8
TABLE 4.2 - HYDRO GENERATION SITES THAT COULD BE DEVELOPED BY 2029 ............................................................ 10
TABLE 6.1 - INFLUENCES OF VARIOUS COST FACTORS ON DIFFERENT SOLUTIONS ...................................................... 21
TABLE 6.2 - IMPACTS OF KEY RELIABILITY FACTORS ON DIFFERENT CONFIGURATIONS.............................................. 22
TABLE 6.2 - COMPARISON OF OVERALL COST AND RELIABILITY OF DIFFERENT OPTIONS ........................................... 22
TABLE 7.1 - SUMMARY OF PROPOSED COMMUNITY CONNECTIONS .............................................................................. 27
TABLE 8.1 - COST BREAKDOWN FOR RECOMMENDED OPTION: BACKBONE WITH RADIAL CONNECTIONS TO
COMMUNITIES (INSTALLED COST) ....................................................................................................................... 31
TABLE 8.2 - OPTION 5 BACKBONE ONLY - WITHOUT RADIAL CONNECTIONS TO .......................................................... 32
TABLE 8.3 - ADDITIONAL COST OF CONNECTING MARTEN FALLS, PEAWANUCK AND FORT SEVERN .......................... 33
TABLE 8.4 - LOSSES OF THE PROPOSED TRANSMISSION CONCEPT UNDER TWO LOAD LEVELS, WITH NO LOCAL
GENERATIONS ...................................................................................................................................................... 34
TABLE 8.5 - ANNUAL COST OF LOSSES FOR THE PROPOSED TRANSMISSION CONCEPT, UNDER CONDITIONS OF TABLE 8.4
............................................................................................................................................................................. 34
TABLE 9.1 - HORCI SUBSIDIES (ALL FIGURES, 2009 $)................................................................................................ 36
TABLE 9.2 - IPA SUBSIDIES (ALL FIGURES, 2009 $)...................................................................................................... 38
TABLE 9.3 - COST COMPARISON SUMMARY (IN $ MILLIONS) ....................................................................................... 42
LIST OF FIGURES
FIG. 6.1: OPTION 1 - ISOLATED SUPPLY LOOPS OR INDEPENDENT SYSTEMS ................................................................. 15
FIG. 6.2: OPTION 2 - SUPPLY LOOPS CONNECTED AT RED LAKE ................................................................................... 16
FIG. 6.3: OPTION 3 - SUPPLY LOOPS CONNECTED AT MUSSELWHITE MINE .................................................................. 18
FIG. 6.4: OPTION 4 - SUPPLY LOOPS SUPPORTED AT BOTH EAR FALLS AND MUSSELWHITE ......................................... 19
FIG. 6.5: OPTION 5 - SUPPLY ARCS CONNECTED AT BOTH RED LAKE & MUSSELWHITE AND COMPLEMENTED BY
RADIAL LINES ...................................................................................................................................................... 20
FIG. 6 6: THE RECOMMENDED CONFIGURATION (OPTION 5)......................................................................................... 24
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
1.0 Introduction
On April 20, 2009 SNC-Lavalin ATP, Inc. and its subcontractor McLeod Wood
Associates, were awarded a contract to assess opportunities for building
economically viable transmission and distribution interconnections between remote
communities in Northwestern Ontario, identifiable renewable generation resources in
Northern Ontario, and points of interconnection with transmission facilities in the
transmission grid controlled by the Independent Electricity System Operator (IESO)
in Ontario. The goal of this investigation was to identify a program of extensions that
could connect as many communities to grid supply as possible, while keeping the
overall interconnection cost low.
Remote communities are generally defined as those communities whose power
systems are not connected to the main Ontario electricity grid. These communities
utilize diesel generation to produce electricity which remains a more expensive form
of electricity generation when compared to the Ontario average cost of generation.
The ever rising cost of fuel, especially the rapid rise of diesel costs in 2008, is a
challenge for ratepayers and for various levels of government which subsidize these
supply arrangements. Little relief from these high costs is expected in the short or
the long term. In most cases, these remote communities are also not connected to
the rest of Ontario via all season roads or by rail, and thus rely upon winter roads, or
air freight, to deliver goods and equipment, including diesel fuel for electricity
generation.
In Ontario, Hydro One Remote Communities Inc. (HORCI) operates fourteen remote
communities that are not grid connected. HORCI receives a subsidy, through the
Remote and Rural Rate Program, which enables it to charge rates to the remote
community residents that are approximately equal to those rates paid by other
Ontario electricity consumers. The HORCI distribution networks are regulated by the
Ontario Government, and follow the Distribution Code as set out by the Ontario
Energy Board.
There are twelve First Nation owned and controlled Independent Power Authorities
(IPAs) that operate within Ontario outside of the HORCI system. These IPAs do not
operate within the rules set out by the Ontario Government, and without the
subsidies, struggle to provide electricity at a reasonable cost to their respective
community members. The cost of energy in these communities may be several
times the cost charged to grid connected consumers.
This pre-feasibility study reviewed a number of options for connecting these First
Nations communities to the IESO controlled grid. The most promising option was
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
subjected to further analysis, which included a series of load flow analyses to see
how the system would react under various load, generation, and network scenarios,
and finally a cost comparison with existing diesel generation. The sections that
follow provide the details of this analysis and the steps necessary to move forward
with this project.
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
2.0 Scope of Study
The scope of work to be delivered in this report will include all areas incorporated in
the SNC-Lavalin proposal dated April 3, 2009.
In evaluating the potential network solutions for supplying power to the off-grid
communities, the study has to allow for the following:
•
Communities have existing isolated power systems powered by diesel
generators. These power systems have small distribution networks, whose
voltages are primarily set by the diesel generators’ output voltages.
•
Hydro One Networks Inc. (HONI) has plans for building transmission
infrastructure in support of East-West power transfers and enabling hydro and
wind power facilities in northern Ontario. These plans call for bringing power
from Lake Nipigon area to Pickle Lake via a 230-kV line. This will result in a
“strong” power supply at Pickle Lake, subject to ongoing weakness in the
existing line E1C from Ear Falls to Pickle Lake, which will require upgrading at
a later date.
•
The costs of O&M, diesel fuel, fuel transportation and environmental impacts
of the existing local power systems need to be compared with those of any
transmission concept recommended by this study.
In brief, this study should assess the feasibility of connecting off-grid First Nations
communities to the Ontario grid using approximate transmission line lengths and
cost figures. It is a pre-feasibility study only, and the cost comparisons between the
existing diesel generation systems and any proposed transmission concept will be
based on approximate construction and O&M costs driven by forecasted electricity
demands. Socio-economic benefits have not been included in the analysis. A more
detailed study will be required at a later date to solidify the data provided in this
report, in particular the data associated with cost/benefit figures.
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
3.0 Methodology
3.1 Technical Analysis
The technical analysis of the various options for the proposed supply system was
based on the raw data available from Nishnawbe Aski Development Fund (NADF),
the Waterpower Working Group, the Ontario Ministry of Natural Resources, the
Ontario Ministry of Energy and Infrastructure, and others. The supply system
options were first analyzed to identify the configuration offering the best costreliability mix, and then evaluated based on a set of performance indices that
measure the following parameters:
•
Ability to supply the greatest number of First Nations communities;
•
Overall transmission length and the required number of substations (of various
types) and reactive power (VAR) compensation points;
•
Proximity of the supply path to hydro and wind development sites within the area;
•
Proximity of the supply path to regions identified with high mining potential within
the area;
•
Proximity of the supply path to all-season and winter roads; and,
•
Proximity of the supply path to suitable terrain for construction and access for
transporting material and personnel.
The study has also taken into account:
•
System performance of the proposed solution under normal conditions, for a
range of load, generation and line outage scenarios; and,
•
Impact of the proposed solution on the IESO controlled power grid.
Using the above information, one configuration was identified as most attractive and
its electrical performance was further analyzed for the following supply scenarios:
•
Full supply of the community demands by IESO controlled power grid;
•
Supply of the community demands by hydro generation expected to be
developed by 2029. These generation developments are selected to be located
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
close to the communities (<20 km) and are expected to be mostly small (<5 MW),
run-of-river type.
3.2 Costing Approach
The cost comparison of producing electricity with the existing diesel system vs. the
proposed grid-connected supply system was conducted using the following:
•
Data on existing diesel generation plants in both the regulated (HORCI) and the
unregulated (IPA) remote community electricity supply system;
•
Cost estimates developed for operating, upgrading, and maintaining remote
diesel system;
•
Cost estimates projected to year 2029 for diesel systems;
•
Cost estimates for the lines and substations (transformers, breakers, SVCs, etc.)
making up the transmission loop, including their construction, operation and
maintenance; and,
•
Cost factor applied to construction of transmission lines based on the terrain and
transportation costs for materials.
3.3 Collection of Mapping Information
Geographical and geological information used for routing various transmission
concepts considered in the study were obtained from:
•
the SNC-Lavalin database developed for a previous NADF study; and
•
the Canadian Geological Survey soils data.
Data on infrastructure, communities/reserves, parks, etc was obtained from:
•
the website http://geogratis.cgdi.gc.ca/geogratis/en/collection\,
Natural Resources Canada Geogratis; and,
•
the Ontario Ministry of Natural Resources.
Mining data was obtained from:
• Ministry of Northern Development, Mines and Forestry
Page 5
operated
by
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
All mapping was conducted using ESRI Arcview GIS (Geographic Information
Systems) software.
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
4.0 System Requirements
4.1 Forecasted Growth and Electricity Demand
The IPAs could not be used as a source of data for this study since they are not
required to file rate applications to the Ontario Energy Board (OEB), as is the case
for HORCI. The data used throughout this analysis utilizes the best available data at
the time of writing, and includes Hoshizaki (2006), Reimer (2009), and Econalysis
and Hoshizaki (2003) reports.
A significant source of data is the EB-2008-0232 distribution rates filing by HORCI
with the OEB. Where verifiable data was not available for the IPAs, the data from
HORCI was extrapolated. While there are likely significant differences in the costs of
operating HORCI generation facilities and the IPAs, it is the best data available, and
is likely to represent a close approximation.
A significant portion of the analysis requires the projection of data into the future.
Projections are inherently subject to a margin of error, and the further into the future
a projection goes, the larger the margin of error is likely to be. In order to simplify the
analysis and avoid unnecessary projections, the costs and revenues of the remote
system and the alternatives are projected in 2009 dollars. Projecting the future price
of diesel fuel is extremely difficult and subject to a very large margin of error at 20
years into the future.
The future cost of the diesel generation system in each community is strongly
correlated to the projected growth of the community and resultant increase in
demand. First Nations communities are among the highest growth communities in
Canada, exceeding the Canadian average growth rate.
For this analysis, the
projected numbers submitted by Econalysis and Hoshizaki (2003) to Indian and
Northern Affairs Canada showed an average growth rate of 4.02% over a 17 year
period. This was the rate used in this analysis for the first 20 years of projections.
After 20 years, a rate of 2.5% was used, assuming that individual demand growth
had slowed, and growth rates had also slowed. This was used in order to provide a
longer term comparison with the cost of a transmission connection to the IESO
controlled grid.
The following is a summary of the existing and projected loads to 2029 for each of
the communities included in this study. The projected load to 2029 is based on a
load growth of 4.02% per year.
Page 7
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Table 4.1- Existing and Forecast Loads
First Nations
Community
2009
Measured Peak Load
(kW)
2029
Projected Peak Load*
(kW)
---
Keewaywin (Couchiching)
Marten Falls
Nibinamik/Summer Beaver
Pikangikum**
Poplar Hill
Wawakapewin
Peawanuck
Keewaywin (Niska)
Eabametoong
Muskrat Dam
North Spirit Lake
Wunnumin
Bearskin Lake
Kitchenuhmaykoosib Inninuwug
Deer Lake
Fort Severn
Kasabonika Lake
Kingfisher Lake
Landsdowne House/Neskantaga
North Caribou Lake/Weagamow
Sachigo Lake
Sandy Lake
Wapekeka
Gull Bay
Whitesands
Webequie
548
402
(1193)
463
61
341
292
883
591
511
772
835
1371
820
634
941
594
739
1169
938
2784
424
250
509
754
--1205
884
(2625)
1018
134
750
643
1942
1299
1125
1698
1838
3016
1803
1396
2071
1307
1626
2572
2063
6123
932
549
1120
1658
Totals for listed Communities (kW)
17,626
38,772
*Based on INAC Central Corridor Assessment growth rate of 4.02%
**Assumed to be supplied by new private 44-kV line being built and not included in total demand
The 4.02% demand growth rate allows for an initial spike in power demand once the
communities become interconnected and current restrictions on electricity
Page 8
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
consumption are relaxed. The 2029 demand estimates listed in Table 4.1 include the
effect of this early rise in demand.
4.2 Generation Requirements
4.2.1 Existing and Future Power Supply System
A breakdown of the diesel generation capacity at each community is provided in
Appendix B3. For estimation purposes, it was assumed that generation capacity
would mostly follow (not lead) the load growth at the rate of 4.02% per year for the
next 20 years. As indicated in Appendix B3, this leads to situations where, at times,
some sites will not have adequate diesel generation capacity to meet their
forecasted loads.
4.2.2 Potential Wind and Hydro Generation Developments
Due to the problems associated with access and the routine maintenance required
by wind turbines, as well as the soil type at many potential wind farm locations, only
the development of potential hydro sites has been considered as feasible at this
time. In particular, run-of-river hydro sites that are close to the communities are
most likely to be first to be developed and connected to the proposed system.
Some of the hydro sites are considered to be beneficial to system operation and the
path of the proposed transmission network was chosen to pass in close proximity to
these generator locations. These locations are listed in Table 4.2.
For each of the five transmission line options studied, including the recommended
option, three types of generation development were considered:
1. Generation Development 1: No local generation. The communities’ electricity
demands are all supplied by Hydro One Networks via its interconnections to
the proposed configuration.
2. Generation Development 2: Generation at Muskrat Dam Lake and Wunnumin
hydro sites. The two sites are assumed to jointly supply 54.7 MW at peak
demand, which is sufficient to meet the demands of all communities, supply
transmission losses and export more than 10 MW to the IESO-controlled grid
in 2029.
3. Generation Development 3: Generation from many small hydro sites along the
routes considered. The small sites are assumed to collectively generate as
Page 9
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
much as in Generation Development 2. However, the transmission losses in
this case are lower and the export to the grid is slightly higher.
Table 4.2 - Hydro generation sites that could be developed by 2029
Generation Site
Designation
Pikangikum
Eabametoong
Muskrat Dam
Wunnumin
Kitchenuhmaykoosib
Inninuwug
Wapekeka
Flammagan
Gobham
Bearskin Lake
Deer Lake
Gull Bay
Webequie
Neskatanga
Kee-waywin/Koocheching
Distance to
Community
(km)
Plant
Capacity
(MW)
Output in
Scenario 2
(MW)
Output in
Scenario 3
(MW)
9.40
9.10
12.10
15.50
2.60
15.50
1.6
0.4
3.2
8.5
53.0
14.1
0
0
0
0
40.6
14.1
1.6
0.4
3.2
4.25
10.6
7.05
9.6
0.3
0
0.3
3.3
12
20
0.10
0.20
1.70
4.20
5.00
6.00
4.40
11
14.20
4.7
19.3
21.4
0.3
0.3
1.2
2.0
1.6
2.0
1.0
0.3
0.7
1.5
2.2
5.4
0.7
3.1
5.0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.3
0.3
1.2
2.0
1.6
2.0
1.0
0.3
0.7
1.5
2.2
5.4
0.7
3.1
5.0
108.4
54.7
54.7
Total
Page 10
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Note that:
•
The names given to hydro sites in Table 4.2 are mostly those of their nearby
communities. Where there are no nearby communities, names of adjacent
lakes or rivers have been used.
•
To allow for a fair comparison between Scenarios 2 and 3, generation at
Muskrat Dam and Wunnumin are reduced to have the same total generation
for the two scenarios,
4.3 Transmission System Requirements
This study outlines a high-level transmission concept or solution consistent with the
requirements listed below, along with a preliminary performance analysis and
estimates of its construction and O&M costs.
The proposed solution must consider:
•
Factors influencing cost, reliability and environmental impacts of the required
system, with the aim of bringing its overall cost and environmental impacts down,
while keeping its reliability at an acceptable level; and
•
The role of the system for developing natural resources of Northwestern Ontario.
The proposed transmission solution must allow for:
•
•
•
Power demand growth in off-grid communities as forecasted for 2029;
Development of key generation facilities within the area; and
Development of existing and future mines in the area and the associated
increase in required power demands.
The overall cost of the proposed solution must be kept low by:
•
•
•
•
•
Having a relatively short length, as lines’ build costs are proportional to their
lengths;
Using appropriate transmission voltages, tower configurations, and conductor
sizes;
Staying close to existing roads;
Minimizing the number of transformers and switching substations, when possible;
and,
Having voltage/VAR support facilities that are as few and as small as practical.
Page 11
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
5.0 Study Assumptions
5.1 General Assumptions
•
Electricity cost differentials - For the foreseeable future, the cost of HONIsupplied electricity in Northwestern Ontario will remain significantly lower than
the electricity supplied by diesel generators.
•
Stakeholders’ cooperation - There will be cooperation between the
interconnection parties (First Nations communities, HONI, IESO, Goldcorp) to
the extent that would allow the proposed network to be interconnected to
Hydro One Networks facilities and to the Goldcorp Musselwhite transmission
facilities (M1M line and SVCs).
•
Voltage support - There will be installations or upgrades of voltage support
facilities within the HONI system in support of the proposed system.
•
Cost of new generation facilities - The cost of hydro and wind generation
facilities, including transmission equipment required for their interconnection,
have not be considered here. These costs are assumed to be taken on by
developers of the generation facilities.
•
Costs of using transmission facilities - The costs of utilizing existing
transmission facilities to import/export power from/to the proposed system
does not need to be considered, as they would be included in the electricity
rates.
•
Access via Winter Roads - Since access for construction and maintenance is
problematic, proximity to winter roads is assumed to be an important factor in
the selection of the preferred paths for the transmission network.
5.2 Specific Assumptions
The following specific assumptions were made in assessing the various options
for the transmission line:
•
Extension to Little Jackfish Project – It is assumed that the Hydro One
planned 230-kV line, between Lake Nipigon and Little Jackfish, will eventually
be extended from Little Jackfish to Pickle Lake. The probability that this
assumption becomes a reality is fairly high, as it coincides with the Ontario
Power Generation (OPG) plans for developing Northern Ontario generation
Page 12
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
resources, as well as Hydro One’s plans to establish an East-West power
transfer corridor.
•
Reinforcement of EIC - It is also assumed that, as part of any future line
between Little Jackfish and Pickle Lake, there will eventually (i.e. - before
year 2029) be a reinforcement of line E1C from Pickle Lake to Ear Falls by
Hydro One, to facilitate East-West power transfers.
•
Musselwhite Mine Line - Line M1M at Musselwhite Mine is a privately owned
line and is the main connection point at the east end of the loop. It was
assumed that negotiations with Goldcorp Inc. could take place to allow
connection of the transmission extension to this line, thus providing an
alternate supply path for Musselwhite Mine.
•
Musselwhite Mine SVCs - The mine would also provide additional VAR
support to the loop via its two SVCs. Like the use of M1M, the cost
associated with the VAR supplied by the SVCs at the mine site has not been
taken into account.
•
Private Line from Red Lake to Pikangikum - This is a privately owned line
and is being built to 115-kV standards, but will be operated at 44-kV. Since
this is a privately owned line, no assumptions can be made as to the
availability of this line to operate at 115-kV at some time in the future.
Therefore, for purposes of this study, this private line is considered to be
unavailable and any proposed concept will be built in parallel with this 44-kV
line. However, a cost allowance has been included for a substation at
Pikangikum to provide a backup supply if the privately owned 44-kV line is out
of service.
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
6.0 Study Results
6.1 Configuration Options
The following interconnection options were identified for study:
Option 1:
Option 2:
Option 3:
Option 4:
Option 5:
Isolated or independent supply systems;
Supply loop connected to the grid at Red Lake;
Supply loop connected to the grid at Musselwhite Mine;
Supply loop connected to the grid at both Musselwhite and Red Lake; and,
Supply arc connected to the grid at Musselwhite and Red Lake.
The study was performed in two stages. First, the options were evaluated for their:
1)
2)
3)
4)
Construction costs;
Operational reliability levels;
Abilities to develop local generation sites; and
Impacts on the IESO controlled grid, including power import from, and power
export to the grid.
Promising options were then assessed for their:
1) Ability to provide power to as many First Nations communities as possible;
2) Overall transmission lengths;
3) Steady-state performances, when operating as part of the Eastern
interconnection;
4) Road access for construction and maintenance;
5) Proximity to both hydro and wind potential development sites; and,
6) Impacts on existing and future mining loads in the area.
For a fair comparison between the options:
• Fort Severn, Marten Falls and Peawanuck in the far North-East have not been
included in the analysis at this time and their costs have been evaluated
separately; and,
• The four communities east of Pickle Lake (near Lake Nipigon) are assumed to
be connected to the presumed extension of the Hydro One planned Lake
Nipigon – Little Jackfish 230-kV line (see Section 5.2).
Page 14
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
In the following sections, the characteristics of each option are discussed.
Independent
Supply Loop
G
G
G
G
G= Generation
resources
IESO-Controlled
Electric Power Grid
Fig. 6.1: Option 1 - Isolated Supply Loops or Independent Systems
6.1.1 Characteristics of Option 1
Figure 6.1 shows, at a conceptual level, configurations that belong to Option 1.
These configurations have the following general characteristics:
• They are very long (> 1500 km) and, consequently very expensive;
• They require the presence of diesel generators until local generation
resources are sufficiently developed;
• They do not offer options for importing power or exporting excess generation
to the south;
• They require an independent “command & control” system for their operation;
Page 15
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
•
•
They provide little economic incentive to IPPs to develop generation
resources in the area beyond the local demand;
They still need to keep and operate the diesel generators, since:
o Hydro generation in the area will be largely seasonal; and,
o They will provide on and off line reserves to maintain supply reliability.
Note that, for this option, it is possible to reduce reliance on diesel generators by
combining hydro generation with some wind power. However, that will not allow
disposing the diesel generators entirely, as wind power is also intermittent.
Furthermore, in an isolated power system, wind power can only come at the expense
of making system frequency control a major operating challenge.
For the reasons listed above, Option 1 is considered to be impractical.
Supply
Loop
Red
Lake
E2R
Ear
Falls
IESO-Controlled
Electric Power Grid
Fig. 6.2: Option 2 - Supply Loops Connected at Red Lake
Page 16
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
6.1.2 Option 2 Characteristics
A conceptual representation of transmission configurations falling under Option 2 is
shown in Fig. 6.2. The general features of configurations belonging to this category
include:
•
Being expensive, since:
•
•
•
•
•
•
Their transmission network is typically very long (> 1500 km);
They require use of large conductors and high transmission voltages to
allow transmission of power to remote loads while keeping transmission
losses low;
They require extensive VAR compensation at multiple points;
They need many substations converting transmission voltage to
distribution voltages and housing VAR compensation facilities; and
They provide ability to export/import power from/to the IESO controlled
grid. However, the ability to export power is limited by the capacity of line
E2R.
Offering low levels of power supply reliability since:
•
•
Loss of the line connecting them to the power grid turns them into islanded
systems, with potentially significant load-generation imbalances; and
Loss of any line segment close to the power grid interconnection point
(within the loop) turns them into longitudinal transmission systems which,
for large demands, are vulnerable to voltage collapse.
Although configurations belonging to Option 2 do not have the key drawback of
those falling under Option 1 (i.e. being an isolated system), still they are considered
unattractive because of their relatively high cost and poor reliability.
Page 17
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Supply
Loop
Musselwhite
Mine
M1M
Pickle
Lake
IESO-Controlled
Electric Power Grid
Fig. 6.3: Option 3 - Supply Loops Connected at Musselwhite Mine
6.1.3 Option 3 Characteristics
The configurations belonging to this category are fundamentally similar to those
belonging to Option 2 and share the same characteristics. However, they differ from
Option 2 configurations in the following respects:
•
•
•
They are connected to the power grid via 115-kV line M1M, owned by
Musselwhite Mines/Goldcorp;
Voltage support at Musselwhite Mine is provided by two SVCs; and
Pickle Lake substation will be supplied by the 230-kV line from Nipigon via Little
Jackfish, which is a stronger source than Red Lake.
Option 3 configurations are therefore unattractive for the same reasons listed for
Option 2 (i.e. they are expensive and have poor reliability).
Page 18
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
6.1.4 Option 4 Characteristics
The level of reliability offered by the configurations belonging to Option 4 is obviously
much higher than those belonging to Option 2 and Option 3. This is reflected in the
fact that they can lose connection to the grid at one point and still remain connected
to the grid at the other point. They can also import/export power to and from the grid
at two locations. However, they remain expensive due to:
•
•
•
Their long line lengths (> 1500 km);
Their need for extensive VAR compensation at multiple points;
Their need for large conductors and high transmission voltages to keep losses
low and allow for higher power transfers; and
While Option 4 offers an improvement in reliability over Options 2 and 3, it is still
relatively expensive.
Supply
Loop
Red
Lake
Musselwhite
Mine
E2R
M1M
Ear
Falls
E4D
E1C
Pickle
Lake
IESO-Controlled
Electric Power Grid
Fig. 6.4: Option 4 - Supply Loops Supported at both Ear Falls and Musselwhite
Page 19
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
6.1.5 Option 5 Characteristics
The transmission configurations falling under Option 5 are made up of a supply
backbone (arc) with the following specifics:
•
•
•
•
•
•
They pass through regions with high potential for hydro and wind generation and
mining developments;
They exploit existing roads in the area, where possible;
They have shorter transmission lengths;
They need VAR compensation at a few points;
They have low built and maintenance costs; and,
They provide alternative sources of power supply to most connected communities
Supply
Arc
Red
Lake
M1M
E2R
Ear
Falls
E4D
E1C
Musselwhite
Mine
Pickle
Lake
IESO-Controlled
Electric Power Grid
Fig. 6.5: Option 5 - Supply Arcs Connected at both Red Lake & Musselwhite
and Complemented by Radial Lines
Page 20
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
6.1.6 Cost Comparison for Different Solutions
Table 6.1 provides a high level comparison of the main factors influencing the cost of
different solutions. The table indicates that the costs of solutions that belong to
Option 5 are generally lower than those falling under other options. This is
irrespective of higher levels of transmission losses for Option 5 solutions, as losses
happen to constitute only a small fraction of the overall system cost for any of the
options.
Table 6.1 - Influences of Various Cost Factors on Different Solutions
Cost
Factor
Overall 115-kV
Length
Overall 44-kV
Length
Line
Maintenance
Transmission
Losses
115-kV
Substations
VAR
Compensation
Option 1
Option 2
Option 3
Option 4
Option 5
>1500 km
>1500 km
>1500 km
>1500 km
≈795 km
≈210 km
≈210 km
≈210 km
≈210 km
≈565 km
High
High
High
High
Moderate
Moderate
Moderate
Moderate
Moderate
Moderately
High
21
21
21
21
16
High
High
High
High
Moderate
6.1.7 Comparing Reliability of Different Options
A comparison of the key factors affecting operational reliability of the different
configuration options is provided in Table 6.2. Obviously, it is possible to make any
supply system, including those falling under Option 1, sufficiently reliable by
extensively developing its local generation resources and interconnecting them to
the demand points. However, since such developments are often uneconomic, it is
reasonable to assume only a moderate level of local generation development for all
options. In that case, Table 6.2 clearly indicates that those solutions belonging to
Option 4 have higher levels of reliability, followed by those belonging to Option 5.
Those demand points that are directly connected to the supply arc of Option 5, enjoy
almost the same level of reliability as their counterparts in Option 4. On the other
hand, demand points served by radial lines in Option 5 have obviously lower
operational reliability.
Page 21
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Table 6.2 - Impacts of Key Reliability Factors on Different Configurations
Reliability
Factor
Option 1
Option 2
Option 3
Option 4
Option 5
Overall 115-kV
Length
Power Grid
Connection
>1500 km
>1500 km
>1500 km
>1500 km
≈795 km
None
At Red Lake
At MWM
Import/Export
Capability
None
Reserve
Generation
Capacity
Limited by power
demand of FN
communities
Limited by
E2R
capacity
Limited by
FN demand
& E2R
Limited by
M1M
capacity
Limited by
FN demand
& M1M
At Red Lake
& MWM
Limited by
E2R & M1M
capacities
Limited by
FN demand,
E2R & M1M
At Red Lake
& MWM
Limited by
E2R & M1M
capacities
Limited by
FN demand,
E2R & M1M
6.1.8 Recommended Configuration Concept
Since reliability of any supply system can be raised to any desired level by ignoring
the costs involved, the recommendation of the preferred configuration has been
made in the context of the information provided by both Tables 6.1 and 6.2. Table
6.3 brings together the cost and reliability aspects of the various options, allowing
one to consider possible compromises between these two aspects for each option.
Table 6.2 - Comparison of Overall Cost and Reliability of Different Options
Key
Items
Option 1
Option 2
Option 3
Option 4
Option 5
Build Cost
Very High
High
High
High
Moderate
Operation &
Maintenance
Cost
Very High
High
High
High
Moderate
Supply Reliability
Low
Low
Low
Relatively
High
Moderate
Despite lower transmission losses for Options 1 to 4, their O&M costs are
significantly higher than those of Option 5, due to their significantly longer
Page 22
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
transmission systems. The most reasonable compromise between cost and
reliability is then offered by solutions falling under Option 5, as they have moderate
build and O&M costs, and at the same time, provide a reasonable level of reliability
for most demand points. Based on this conclusion, the focus of the study from this
point forward has concentrated on those interconnection solutions that belong to
Option 5.
The category of solutions represented by Option 5 is made up of a “backbone” and a
number of radial lines. The cost of building the backbone is relatively low, since it
can have a relatively short length and can be operated with medium transmission
voltages and does not need VAR support at many points. Also, the cost of radial
lines is much lower, as they can be operated with lower transmission voltages;
require smaller conductors, and less expensive support structures. At the same
time, their VAR support requirements can be much lower during normal operation.
Reliability of supply for Option 5 solutions depends on the connection type; that is,
one achieves good reliability for backbone-connected loads and slightly lower
reliability for radially-connected loads.
6.2 Recommended Transmission Concept
As part of this study, several Option 5 systems were formed and analyzed. The
analysis included filtering out transmission concepts that did not directly serve a
large number of First Nation communities, and/or had little proximity to significant
hydro generation resources, existing and future mining areas, or access roads.
In the filtering process, proximity to potential wind generation sites has not been
weighted as heavily as those for hydro sites, since soil conditions at many sites with
high wind potential are not amenable to development of wind power facilities.
Furthermore, maintenance of such facilities is expected to pose a significant
logistical challenge, considering the sites’ remoteness and limited accessibility.
The systems that survived the filtering process were then subjected to power flow
analysis to assess their steady-state performance. For the chosen voltage levels
and equipment, the analyzed systems in general performed quite well under normal
operating conditions. Among them, the system with the shortest transmission length
is shown in Figure 6.6. That is the configuration recommended in this study.
Page 23
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Bearskin Lake
Sachigo Lake
Kitchenuhmay
Wapekeka
Kasabonika Lake
Muskrat Dam
Wawakapewin
Sandy Lake
Keewaywin
Weagamow (NC)
Wunnumin
Kingfisher Lake
Nibinamik
Webequie
Bear Head Lake
North Spirit Lake
Neskantaga
Musselwhite
Deer Lake
115 kV
private line
Poplar Hill
Eabametoong
Pickle Lake
Albany River
Pikangikum
44 kV
private line
Little Jackfish
Red Lake
44kV
115kV
HONI 230kV
Hydro
Substation
Whitesands
Gull Bay
Wind Farm Tap
Fig. 6 6: The Recommended Configuration (Option 5)
The recommended transmission concept consists of a 115-kV backbone system
approximately 795 km in length with 44-kV radial lines. Its backbone directly passes
through 12 communities and it connects an additional 9 communities via its radial
lines, while passing by regions with high potential for hydro and mining
developments.
Implicit in selecting the proposed transmission concept are the assumptions outlined
in Section 5.2. A key assumption of the recommended configuration is the extension
of the Hydro One planned Lake Nipigon – Little Jackfish 230-kV line from Little
Jackfish to Pickle Lake. In the absence of this extension, other alternatives for
Page 24
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
connecting the four communities supplied by the 230-kV line have to be considered.
This could include extension of the 115-kV backbone southward to include the
Musselwhite 115-kV private line and a 115-kV line segment connecting Pickle Lake
to Little Jackfish.
It is assumed that the new private line from Red Lake to Pikangikum will not be
available to become part of the proposed supply arc. However, the proposed
concept includes a substation at Pikangikum to provide a backup supply should the
44-kV private line be out of service. The system was also analyzed with the 44-kV
Pikangikum load being supplied by the proposed concept to ensure that it can be
supplied within the operating limits of the concept.
Options for connecting the remaining three communities (Fort Severn, Marten Falls
and Peawanuck) to the power grid have also been considered in this report (see
Section 7.3).
Page 25
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
7.0 Proposed Concept Details
Based on the proposed configuration (Fig. 6.6), 21 remote communities will be
connected to the power grid through:
o A 795 km 115-kV transmission system backbone with termination points at
Red Lake and Musselwhite Mine;
o 44-kV radial lines off the proposed backbone; and
o 230-kV HONI transmission line extension (see Section 6.2).
The proposed configuration connects these communities and supplies their 2029
peak demand with significant additional transmission capacity for future demand
growth. The total demand of these 21 communities is roughly 91% of the off-grid
electric power demand. Connection of the remaining 3 distant communities, which
have the remaining 8.6% of the demand, is discussed at the end of this section.
7.1 Backbone and Radials
The proposed configuration requires a 115-kV backbone which should be adequate
for the amount of power that is expected to be transferred to the south. This is
based on the fact that there are only about 200 MW of hydro generation capacity
within the area (excluding those in the Northeast and James Bay area) and, at this
time, the prospects for serious development of wind power resources in the area
appear to be small. By 2029, assuming extensive development of hydro generation
sites in the area, the 200 MW of generation will be largely consumed by the loads of
the communities as well as the mining loads in the area (including loads at
Musselwhite Mine and Red Lake), and the surplus power that would be available to
export would not exceed 60 MW.
The 44-kV lines are used mostly to connect sites that are not more than 150 km
away from the 115-kV backbone. The losses in this case are relatively low, as the
size of the demands are small. Significant generation is assumed to be built around
the backbone, rather than at the end of radial lines.
Table 7.1 contains the communities’ connectivity and forecasted 2029 peak load
data. Details on the length of transmission line segments forming the concept are
provided in Appendix B1.
Page 26
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Table 7.1 - Summary of Proposed Community Connections
Community
Keewaywin (Couchiching)
Marten Falls
Nibinamik/Summer Beaver
Pikangikum**
Poplar Hill
Wawakapewin
Peawanuck
Keewaywin (Niska)
Eabametoong
Muskrat Dam
North Spirit Lake
Wunnumin
Bearskin Lake*
Kitchenuhmaykoosib Inninuwug*
Deer Lake*
Fort Severn*
Kasabonika Lake*
Kingfisher Lake*
Landsdowne House/Neskantaga*
North Caribou Lake/Weagamow*
Sachigo Lake* Sandy Lake* Wapekeka* Gull Bay* Whitesands* Webequie* Totals for each connection type (in kW) 2029 Total off‐grid demand ( in %; based on 38,772 kW total) Demand On
115-kV
(kW)
Demand On
44-kV
(kW)
Demand On
230-kV
(kW)
Supplied by
Other Means
(kW)
1205
884
(2625)
1018
134
750
643
1942
1299
1125
1698
1838
3016
1803
1395
2071
1307
1626
6123
932
2572
2063
1658
549
1120
21,105
9,079
5,237
3,351
54.4%
23.4%
13.5%
8.6%
*Serviced by Hydro One Remote Communities Inc.
** Load at Pikangikum is not included in the proposed concept, however, the system proposed is capable of
acting as a backup to the private line serving Pikangikum
Page 27
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
7.2 System Performance Analysis
The performance of the proposed transmission concept has been studied under a
variety of situations, including different load and generation levels and specific lines
being out of service (contingency cases). The goal was to confirm the robustness of
the proposed concept for operating as an integral part of the IESO controlled
transmission system. The details of the scenarios and the results are given in
Appendix B2. A summary of the system performance is provided below:
•
The proposed transmission concept performs quite well under normal
operating conditions. The loadings of transmission facilities stay well
within their set thermal limits for all tested scenarios.
•
There is need for reactive support at three points within the supply arc to
maintain an acceptable voltage profile, under different loading conditions.
Transmission losses were generally small, irrespective of the fact that
more than 500 km of lines are operating at 44-kV.
The performance of the system following a single line outage was also analyzed for
seven key contingency cases (see Appendix B2 for details). In general, the system
performs satisfactorily following the loss of any line belonging to the arc.
For line outages occurring within the IESO-controlled power grid, the results remain
encouraging as long as some local generation resources are present.
In the
absence of any local generation, for two contingency cases there are no power flow
solutions, indicating that it could become difficult to operate the system under those
conditions.
Three remedies are proposed for the above problem:
1) Coordinating development of key local generation resources with building of the
proposed transmission concept;
2) Using Special Protection Schemes (SPS); or,
3) Re-enforcing the two problematic lines.
These solutions should be further investigated as part of a much larger, in-depth,
study.
7.3 Unconnected Remote Communities
The engineering and financial analyses of the proposed transmission concept did not
include power supply to Fort Severn, Peawanuck and Marten Falls at this time.
Page 28
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
However, the possibility of connecting these communities using a 115-kV extension
from the backbone system does exist and can be investigated. An estimate for
connecting these communities is shown in Table 8.3, but it is assumed at this point,
that the cost is prohibitive.
Connection of these three communities would be the
subject of further study.
Also, Pikangikum will be connected by a privately owned 44-kV line and has not
been included in this concept. Never-the-less, the proposed concept is designed to
provide a backup supply when the private line is out of service.
7.4 System Implementation
The proposed system could be completed in three phases:
•
•
•
Phase 1 - build the 115-kV backbone (estimated time: 5 years)
Phase 2 - build the 44-kV radials (estimated time: additional 2 years)
Phase 3 (optional) – connect distant communities (estimated time: additional
2 to 3 years)
Development of generation resources is understood to be undertaken by IPP’s and
should be encouraged to be concurrent with Phase 1, as much as possible.
Page 29
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
8.0 Costing the Proposed Configuration
In arriving at the estimated cost of the proposed solution, the following were
considered:
•
Costing of required capital for constructing the transmission lines forming the
selected transmission solution, based on the line voltage level, conductor type
and wood pole structure details;
•
Costing of the required substations, including breakers, transformers, and
shunt devices for voltage/VAR support, while considering the required level of
equipment redundancy;
•
Costing of the line losses over a 20 year period, based on an assumed daily
load profile;
•
Costing of the transmission system maintenance based on the lines’ lengths
and their probable number of outages per year; and
•
Costing of the roads to be built to allow transporting transmission equipment
to construction sites and later access to equipment for maintenance purposes.
8.1.1 Line and Equipment Cost Breakdown
Table 8.1 provides a cost breakdown for the proposed concept, identifying the
installed cost of major system components. Fibre has been included as a
component of the proposed system. However, the activation of this fibre will depend
on the availability of appropriate equipment at the termination points at both ends of
the proposed system.
Page 30
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Table 8.1 - Cost Breakdown for Recommended Option: Backbone with Radial
Connections to Communities (Installed Cost)
System
Component
115-kV backbone system
44-kV radials
No/Length
Unit Cost
($ 000’s)
Total Cost
($Millions)
795 km
200
159.0
495 km
83
41.1
Substations (see Appendix D)
Additional Cost for Redundancy
Fibre (backbone)
67.5
38.5
795 km
Fibre (radials)
495 km
Fibre (Musselwhite to Pickle
Lake)
Fibre Equipment:
(Red Lake and Nipigon)
186 km
(Bear Head, Muskrat Dam,
Wunnumin, Albany River, Little
Jackfish)
5 units
6.0
4.8
6.0
2.97
15.0
2.79
360
0.72
720
3.6
2 units
Total Estimated Cost
*Class C cost estimate
Page 31
$320.9*
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
The following options in Table 8.2 and Table 8.3 are related to Option 5 and are
shown for information purposes only and are not considered in the final costing
analysis.
Table 8.2 - Option 5 Backbone Only - without Radial Connections to
the First Nations Communities
System
Component
115-kV backbone system
Substations (see Appendix D)
Additional Cost for Redundancy
Fibre (backbone)
Fibre (Musselwhite to Pickle
Lake)
Fibre Equipment:
(Red Lake and Nipigon)
(Bear Head, Muskrat Dam,
Wunnumin, Albany River, Little
Jackfish)
No/Length
Unit Cost
($ 000’s)
Total Cost
($Millions)
795 km
200
159.0
53.2
28.3
795 km
6.0
4.8
186 km
15.0
2.79
2 units
360
.72
5 units
720
3.6
Total Estimated Cost
*Class C cost estimate
Page 32
$252.4*
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Table 8.3 - Additional Cost of Connecting Marten Falls, Peawanuck and Fort
Severn
System
Component
115-kV line:
• Marten Falls
• Peawanuck
• Fort Severn
Substations
(Cost of Redundancy not included)
Additional Fibre
Fibre Equipment:
(Kasabonika Lake and
Eabametoong)
No./Length
Unit Cost
($ 000’s)
Total Cost
($Millions)
190 km
270 km
200 km*
200
200
200
38
54
40
13.2
660
6.0
2 units
720
Total Estimated Cost
3.96
1.44
$150.6*
*Part of cost already included in Peawanuck connection, Class C cost estimate
8.1.2 Operation and Maintenance Cost Estimation
Operation and maintenance costs are assumed to be 2% of equipment capital cost.
This is more than normally allowed for O&M costs, but due to the problematic access
conditions for maintenance, this seems like a more realistic estimate.
8.1.3 Transmission Loss Estimation
Line active losses for the proposed concept were determined for a number of
generation and load scenarios. The calculated 2029 losses and their associated
costs, based on a basic daily load profile, are shown in Table 8.4 and Table 8.5
Page 33
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Table 8.4 - Losses of the proposed transmission concept under two load
levels, with no local generations
Local
Generation
(MW)
Total
Power Demand
(MW)
Net Active
Power Export
(MW)
Active power
Loss
(MW)
38.05
- 41.1
3.05
19.02
-19.6
0.58
0
Table 8.5 - Annual cost of losses for the proposed transmission concept,
under conditions of Table 8.4
Local
Gen.
(MW)
0
Demand
Period
Daily
Duration
(hours)
Daily
Energy
Loss
(MWH)
Electricit
y Rate
($/MWH)
Annual
Cost
(M$)
On-peak
8
24.40
75.00
0.67
Off-peak
16
9.28
75.00
0.25
Total
Annual
Cost
(M$)
0.92
The losses are calculated with the assumption that there are no local generations
(i.e. all required power is imported from the IESO-Controlled system). The on-peak
demand is assumed to be 38.05 MW, lasting 8 hours, while the off-peak demand (or
base load) is set at 50% of the on-peak demand (i.e. 19.6 MW) and assumed to last
for 16 hours.
Page 34
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
9.0 Cost Comparison of Existing and Proposed System
In order to compare the costs of maintaining and upgrading the diesel generation
systems in each community with that of the cost of constructing a high voltage
transmission line to connect these communities to the provincial grid, it is necessary
to determine the approximate costs associated with this remote system, and the
approximate costs of constructing a transmission line.
The costs of the remote system are broadly divided into two categories, the HORCI
communities, which receive various known subsidies, and the IPA communities, for
which the total amount of subsidies are not available. The HORCI system receives
two broad categories of subsidy, the Remote and Rural Rate Protection (RRRP) and
an indirect subsidy through the higher rates charged to Standard “A” customers.
These cost estimates are pro-rated to only include those communities that will be
connected to the proposed grid, so the total RRRP subsidy shown here is not the
actual total RRRP subsidy provided to HORCI. The demand of Pikangikum, Marten
Falls, Fort Severn, and Peawanuck are not included in the model for this reason.
9.1 HORCI Subsidy
The Remote and Rural Rate Protection (RRRP) subsidy is paid through the Ontario
rate base as part of all Ontario electricity consumers’ bills. This socialized cost
creates a “postage stamp” price for energy and transmission across Ontario, which
means that all customers pay approximately the same price, regardless of their
location, or the higher cost of providing service to the customers. The value of the
RRRP awarded to HORCI in the EB-2008-0232 OEB decision order is $27 895 000.
Based on the projected generation by HORCI, this amounts to a subsidy of
$0.51/kWh.
HORCI charges different rates to institutional customers (customers that receive
funding from the provincial or federal government) than similar institutions would pay
in a grid connected community. These rates are significantly higher than in IESO
grid connected communities, especially in air access only communities, and range
from $0.55/kWh to $0.88/kWh. The difference between the rate paid by institutional
customers in IESO grid connected communities and the rate paid in remote HORCI
communities is an effective subsidy paid by the institutions.
In most of these
communities, this is paid by the Federal government, through its support for band
owned buildings, hospitals or nursing stations, water treatment plants, teacherages
and schools.
The provincial institutional customer base in most of these
Page 35
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
communities is generally limited to the airports and some health facilities. The
analysis of the value of this effective subsidy is based on a total cost of energy in
IESO communities of $0.17/kWh. This cost is an inflated estimate of a standard
electricity service charge using $0.13/kWh for energy, and $0.04/kWh for
transmission, distribution, and other charges. Based on the average Standard A rate
paid in HORCI communities of $0.86/kWh, there is an indirect subsidy of $0.69/kWh
paid by the institutional customers. Standard A customers consume approximately
20% of the energy generated by HORCI, and supply approximately 70% of the
revenue.
The total number of kilowatt hours used by HORCI communities in 2009 (projected
data) in this study is more than 48 000 000 kWh. The kWh figure is derived from a
projection of the 2004 use to 2009 based on the 4.02% growth rate indicated earlier,
and then from 2009-2029 the same growth rate is projected into the future and the
usage is summed. The potential line and radial lines do not connect the
communities of Peawanuck, Fort Severn, and Marten Falls, and they have been
removed from the analysis by deducting their contribution to the total kWh figure.
Pikangikum is expected to also be connected to the grid via a private line and its
consumption has also been excluded. The effective subsidy provided to HORCI
communities is a combination of the RRRP and the indirect Standard A subsidy.
The value of these subsidies is shown below.
Table 9.1 - HORCI Subsidies (All figures, 2009 $)
HORCI 2009
kWh
Subsidy value
Total Subsidy
($millions)
RRRP
48 686 519
$0.51
$ 24.9
Std A Subsidy
9 737 304
$0.69
$ 6.7
Total Subsidy, 2009
HORCI 2009-2029
RRRP
Std A Subsidy
kWh
$ 31.6
Subsidy value
Total Subsidy
($millions)
1 559 892 463
$0.51
$795.6
311 978 463
$0.69
$215.3
Total Subsidy 2009-2029
Page 36
$1,010.9
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
The total expected value of the subsidy is projected to rise with the growth in
consumption in the communities over the 20 year period. The price of diesel fuel
has been held constant throughout the period, owing to the uncertainties in
predicting diesel fuel prices far into the future, and this is considered to be a
conservative assumption. The efficiency of the system has also been held constant.
The total value of the RRRP subsidy requested in the 2009 rate application is only
enough to cover the predicted cost of fuel for the year. The cost of fuel for
generation, including delivery, in HORCI systems averages $0.423/kWh, with the
RRRP subsidy valued at $0.51/kWh. There are also significant costs associated
with operations, maintenance, and administration of the distribution system, the
generation assets, as well as upgrades and emergency repairs. These other items
raise the total cost per kWh within the HORCI communities to $0.778.
9.2 IPA Subsidy Costs
As previously noted, there is significantly less information available from the IPAs on
their actual costs, revenues, and operations. A significant amount of the analysis
here relies on the assumption that the IPAs operate at a similar level of efficiency,
and with similar technology to HORCI communities, which may not be true. HORCI
is likely able to operate at a lower cost per kWh because it has a larger customer
base, and easier access to bulk fuel purchases. However, the best and most
conservative assumption is to assume the same cost of generation in both types of
systems, $0.778/kWh.
IPAs are not regulated by the Ontario Energy Board. This means that they can set
their own rates and standards. As a result, the rates charged, and revenue earned
per kWh varies significantly between the IPAs. The range in revenue for IPAs
ranges from $0.19/kWh to $0.49/kWh, based on best estimates. The average rate
charged to residential customers is approximately $0.12/kWh, and to institutional
customers, $1.06/kWh. As there is no general subsidy paid to the IPAs, like the
RRRP, it is more difficult to estimate the total amount of subsidy paid to the IPA’s.
The analysis here approximates the subsidy based on the difference between the
rate paid by the residential customers and the estimated cost of generating the
energy, based on the HORCI data provided in EB-2008-0232. The IPAs cannot
operate at a loss continuously, and must make up the difference somehow, either
through accessing funding from other programs, such as Welfare, Education, or First
Nation administration, or through the rates charged to institutional customers. The
effective subsidy in this case is based on the difference in the cost to generate a
kWh of energy, and the effective revenue earned from that kWh when it is sold to
Page 37
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
consumers. The difference between the revenues earned in the IPAs through the
average residential rate of $0.12/kWh and the cost of generation is the effective
subsidy. This amounts to $0.66/kWh.
There is a secondary indirect subsidy provided by government customers, in the
same manner as in HORCI communities. However, the rate charged to these
government users is higher in the IPAs than is charged to the Standard A customers
in the HORCI communities, so the effective subsidy rate is $0.89/kWh, which is the
difference between the average rate charged in the IPAs, and the same rate that
would be applied to an IESO grid based customer.
Table 9.2 - IPA Subsidies (All figures, 2009 $)
IPAs 2009
kWh
Total Subsidy
($millions)
Subsidy value
Revenue Deficit
26 215 818
$0.64
$ 13.4
Government User
Subsidy
5 243 163
$0.89
$ 4.7
Total Subsidy, 2009
IPAs 2009-2029
kWh
$ 18.1
Total Subsidy
($millions)
Subsidy value
Revenue Deficit
839 942 095
$0.64
$537.6
Government User
Subsidy
167 988 419
$0.89
$149.5
Total Subsidy 2009-2029
$ 687.1
The total subsidy provided to the IPAs over a 20 year period totals more than $680
million.
9.3 Upgrade of Diesel Generation
The final cost associated with the diesel generators in the remote communities is the
continued need to add to or upgrade the generation systems in each community to
match the growth in population and demand. A conservative estimate of the cost of
demand related upgrades and replacements in all remote communities is
Page 38
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
approximately $4000/kW to complete, based on best available information. We do
not include in the calculations the cost of overhauls and significant maintenance, as
the HORCI numbers include these elements in their rate base and our part of their
normal operations and maintenance costs. The impact on the IPA’s is not
calculated, however, it would result in an increase in the overall cost, as generally,
the planned overhauls are not included in the IPA’s rate base.
The estimates of growth in the remote communities, compared to the available
capacity in these communities, suggests that demand-based upgrades of
approximately 20 MW will be required in the remote communities over 20 years,
which averages 1 MW per year. The total cost of these upgrades is thus estimated
to be $4 000 000 annually. This has been added to the total cost of the diesel
system. However, this cost has not been included in the final calculations because it
may be advisable to utilize this small capital funding to ensure the current systems
within the communities are maintained in the event of an emergency requiring backup power should grid based power be interrupted. This will be of most concern to
the several communities that are on the radial lines, for which a disruption is more
likely. The diesel systems would not necessarily be maintained or upgraded in such
a way as to provide the full community with power, but would provide enough power
to meet the emergency needs of a community.
9.4 Other Costs Associated with Diesel Generation
There are other costs associated with the diesel system that are more difficult to
quantify, and have not been included in the economic model. However, they may be
significant and would increase the costs. The environmental liability of operating and
maintaining the diesel generation systems in these communities is extremely high.
Millions of litres of diesel fuel are transported annually on winter roads, or by barge
or air in some cases. There is the possibility of fuel spill during the transportation,
transferring, and storage. The cost of a single large spill could be massive as these
communities are remote, and have little capacity to clean up from a spill.
The cost of emissions generated by diesel consumption is also likely to increase.
Although currently there is no carbon tax in Ontario, the environmental cost of diesel
consumption and emissions is likely to become a factor at some point in the future.
The current proposal for a cap and trade system must consider the amount of
emissions generated by this consumption of diesel. In 2009, the communities as a
whole were predicted to use 25 million litres of diesel. Over the 20 year period of
2009-2029, the communities are expected to consume more than 750 million litres of
diesel fuel. The emissions generated by diesel are almost 4 times the amount
Page 39
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
generated by the current generation assets employed by Ontario (.88 tonnes
CO2/MWh vs .22 tonnes CO2/MWh see:
http://www.ec.gc.ca/pdb/ghg/inventory_report/2005_report/ta9_7_eng.cfm
using the average for the grid overall and the average for refined petroleum
products). Although Ontario does not have a carbon tax like British Columbia, it is
participating in the Western Climate Initiative which will bring Cap and Trade
legislation, and effectively may place a value on emissions. Using the best available
data, in this case British Columbia’s carbon tax values of between $10/tonne and
$30/tonne, the value of the emissions offset for 20 years would range from $17
million to $52 million in 2009 dollars.
There is also the potential for continued large and rapid increases in the price of
diesel fuel, especially if global consumption continues to rise, and oil discovery and
extraction continues to decrease, also called peak or plateau oil. This situation is
very difficult to predict, but the cost of diesel fuel may experience significant
increases in the relatively near future.
9.5 Existing System Cost Summary
The total subsidy provided to the remote communities through the RRRP program,
the rates charged to institutional customers, and the deficit in revenue from IPA
residential customers, is large, totaling more than $49,000,000 in 2009, and rising to
more than $100,000,000 in 2029. The cumulative value over the 20 years is more
than $1.5 billion in effective subsidies.
9.6 Financing New Facilities
Connecting the remote communities to the IESO controlled grid would eliminate
these costs, although it would take time to construct the necessary transmission
infrastructure and ensure that all communities are upgraded to the necessary
specifications.
The current Green Energy and Green Economy Act, and the associated regulatory
changes may create changes in the transmission system as well. It has been
argued by investors in transmission infrastructure that the current rates of return for
electricity transmission are too low to attract new capital. The rates are currently
around 8.83% for equity, and 6.25% for debt. The return on equity is based on a
formula that provides a premium of 3.80% on top of a discounted Government of
Canada 10 year bond forecast.
Page 40
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
For the purposes of this research, the return on equity has been inflated to account
for potential increases due to increasing bond rates, and to ensure that the
investment appears lucrative for the potential investors. The rate has been set at
11.50% which is higher than almost all rates of return in North America in the gas
and electricity utility sector (see comments by Hydro One Networks Inc. in response
to the OEB’s updated Cost of Capital parameters of February 24, 2009, EB-20090084). The return on debt has been set at 7.62% based on the proposed rates
identified in the OEB Cost of Capital Parameters of February 24, 2009.
The remaining assumptions are based on the current structure for transmission
assets in Ontario. The Debt to Equity ratio is set at 60:40. The asset depreciates in
a straight line for 40 years at 2.5% annually, reaching zero book value at year 40.
The debt is amortized over 40 years, reaching zero in year 40. Operations and
maintenance is set at 2% annually, and is shown without inflation, in order to match
the assumptions of the diesel generation model.
9.7 Cost of Proposed Transmission Line vs. Existing Diesel
Generation
Using the proposed line and infrastructure shown in Fig. 6.6, the cost of building,
operating, and maintaining these assets would be approximately $37.4 million in
2009. There is a potential variance in the total cost annually based on the cost of
operations and maintenance, although in this model this cost has been estimated at
a relatively high value of 2% of capital cost. Over 20 years, the cumulative cost
would total $709.6 million. This shows no inflation, and also does not consider the
cost of any upgrades to the line. The initial costs for the system are shown in Table
8.1 and are estimated to be $320.9 million.
Page 41
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
The current Transmission System Code rate of return, and thus the cost to the rate
payers, of transmission assets is based on the book value of the asset, which
depreciates over 40 years to a zero book value. This results in a decrease in total
cost annually for 40 years at a relatively slow pace.
As the following table indicates, the construction of a transmission concept linking
these communities to the IESO controlled grid is economically advantageous for
Ontario, Canada, and the rate payers in the long run. The growth rate for the diesel
generation system is modeled to slow to 2.5% annually after 2029.
Table 9.3 - Cost Comparison Summary (in $ Millions)
Supply
Option
Annual cost in
2009
Annual Cost
in 2029
Cumulative Cost
2009-2029
Diesel Generation
system
$ 49.7
$ 109.3
$1 591.5
Transmission
Concept
$ 37.4
$ 30.2
$ 709.6
The annual cost of the diesel generation system will require continuous investment
to cover the increased demand on the system due to population growth and growth
in household demand. The difference in annual and cumulative costs favors the
construction of a transmission line immediately. Over 20 years, the savings begin to
appear between the two systems, totaling more than $800 million. Even assuming a
massive cost increase in the transmission infrastructure, 100% or more, the
transmission system remains the lower cost option over 20 years. Continued
maintenance on the transmission assets will be ongoing, and will accelerate in the
latter years of the period, but it is only a fraction of the expected cost of the subsidies
provided to the remote diesel systems.
The total subsidy that is used to maintain the diesel generation system is buried in
several items. The most direct subsidy is the RRRP program, which currently
provides the single largest subsidy to the remote communities within the Hydro One
Remote Community system. This subsidy is paid by the rate base of Ontario as a
whole. There are also subsidies paid indirectly by the federal and provincial
Page 42
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
governments in the remote communities, whether HORCI or IPA communities. The
institutional rate charged is far above the rates these entities would pay in grid
connected communities, and is subsidized by the tax payers of Ontario and Canada.
Finally, there is an apparent structural deficit for the Independent Power Authorities,
which will only become more acute and unsustainable as the communities grow and
demand more power. This deficit can not be maintained, and is likely paid for by
other programs and other budgets, such as from education, health, and operations,
or from emergency funding from Indian and Northern Affairs. This revenue deficit,
the difference between the costs and the revenues, represents a large and growing
indirect subsidy.
Finally, it is important to note that none of these calculations consider the price of
diesel increasing, and thus the potentially increasing cost of generation, nor do these
calculations consider the environmental liability of maintaining these systems. The
cost of a single large scale spill in a remote community increases the attractiveness
of the transmission line, both for the community, and for Ontario. The Green Energy
and Green Economy Act, and the proposed Environmental Protection Amendment
Act (Greenhouse Gas Emissions Trading) 2009 suggest that Ontario will be seeking
a variety of measures and methods to reduce the dependence on fossil fuels. While
these communities may be small, and the overall energy consumption a small
fraction of the total used in Ontario, the diesel system is four times as polluting in
terms of CO2 emissions. The value of these emissions, or their cost, is likely to
increase, and an early removal of these emissions may be more cost effective.
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
10.0 Regulatory Impacts
This section is included to identify a number of the key issues that the decision
makers in the First Nations communities need to consider in their attempt to bring
together the resources that will be needed to make the proposed transmission
concept a reality. As these issues are complex and need to be presented along with
their background information, the entire Appendix E has been devoted to them.
To briefly summarize the issues, it must be understood that the high voltage
electricity transmission system in Ontario is from a technical stand point, fully
controlled by the Independent Electricity System Operator. From a financial
standpoint, the Independent Electricity System Operator is regulated by the Ontario
Energy Board. All of these agencies fall under the purview of the Minister of Energy
and Infrastructure.
It is also important to know that there are six transmitters in Ontario: Hydro One
Networks Inc., Great Lakes Power, Five Nations Energy Inc., Niagara West
Transformation Corporation, Cat Lake Power Utility Ltd. and Canadian Niagara
Power. All of these transmitters have a license to operate anywhere within Ontario
and all are able to make an application to the Ontario Energy Board to include the
costs of new approved transmission projects costs in their rate base.
However, the ability of an individual transmitter to move forward on any new project
is tempered by the ability of the Minister of Energy and Infrastructure to issue strong
directives (as outlined in the new Green Energy Act), regarding which transmission
line(s) can be included into the transmission pool, and which transmitter or
transmitters will be allowed to build, or compete to build, a particular transmission
system that would be included in the regulated IESO controlled grid.
This study shows that the connection of the majority of the remote communities is
technically feasible, and would be a lower cost operation when compared to the
estimated current cost of the diesel generation system. Therefore, the next step in
developing the transmission supply option, would be to decide if the proposed grid
will be a direct connect customer, or to work toward having the this new transmission
line become part of the Ontario high voltage transmission system and included in the
transmission pool. A direct connect system would bear all of the costs of building
and operating the system and would spread those costs to its customers. A new
system that is part of the transmission pool has the ability to subsidize its costs as
they are spread across all Ontario rate payers.
Page 44
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Advantages and disadvantages:
• The pooled cost of transmission in Ontario is currently about $0.05/kWh vs.
approx. $0.19/kWh in the direct connect option as identified in this study,
• If there is a shortage of power, direct customers are the first to be shed or
disconnected from the transmission system and regulated local distribution
companies (mainly serving residential customers) are the last to be shed,
• In a pooled system the cost of building, operating, and maintaining the system
is included in Ontario wide pooled cost of transmission. The transmitter that
operates the system receives its’ revenues from the IESO on a monthly basis
beginning 30 days after the asset is operational,
• To be part of the transmission pool a transmission company must accept
regulation from the Ontario’s regulators (The Ontario Energy Board). Likely,
any assets that are connected to the main Ontario transmission grid would
have to submit to some controls (i.e. connection agreements with the IESO)
for safety’s sake.
Once a decision is made by the communities to be either a direct customer, or to
become part of the Ontario transmission pool, a political strategy must be developed
to support the proposed decision. Generally, the following key elements that would
follow are:
Direct Connect:
• Funding applications to carry out a feasibility study and business plan
• Completion of a detailed feasibility study and business plan that would
include:
o More accurate estimates of the costs to build and operate the system
o More detailed system planning and design including route selection
o Development of necessary financial system(s)
o Development of management and technical capacity to operate and
maintain the system
o Development of operational policies and procedures so that power can
be delivered to each community in a safe, reliable and cost effective
manner, and
o Determination of the appropriate kinds of business entities that will
deliver power to community members and businesses, including
decisions regarding ownership structures:
ƒ Transmission company
ƒ Independent power authorities which buy their power from the
transmission company and reselling it in the community
ƒ Or regional single entity serving all customers
ƒ Or a regional entity comprising both transmission and
distribution serving all customers
Page 45
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
•
•
•
•
•
Raising of the necessary funding to build, operate and maintain the line,
Negotiations regarding the connection to the Hydro One Networks system.
System Impact and Customer Impact Assessments would be completed by
IESO and Hydro One Networks to ensure the project will not hamper the
existing system and would identify any necessary upgrades to the Hydro One
Networks System that will need to be undertaken, at the cost of the new direct
connect customer,
Application to be connected to the Independent Electricity System Operator
grid which would involve connection agreements with the IESO
Negotiations with Hydro One Remote Communities and the Independent
Power Authorities to take over the distribution systems in their communities
which may include distribution system assessments and environmental
sampling to determine if there is contamination at the sites due to diesel fuel
spills, and
Provincial environmental assessment and possibly a federal EA if federal
funding is part of the funding package.
Pooled Transmission Option:
• The political leaders would enter into discussions with the provincial
government, seeking a directive from the Minister of Energy and Infrastructure
indicating that a new transmission system to service the people of the remote
communities in Northwestern Ontario is good for Ontario and should be
included as part of the transmission pool,
• The leaders need to put a process in place to undertake their due diligence in
regard to the following questions about the electricity transmission solution for
the communities. This due diligence process will answer, at minimum, the
following questions:
o How will the system be paid for?
o How will the system be maintained?
o Who will build operate and maintain the system?
ƒ Partnership with and existing transmitter
ƒ Development of a new transmitter to be licensed by the OEB
ƒ Determine which transmitter best serves the needs of the people
and invite them in to build the new line.
• Funding applications to carry out a feasibility study and business plan
• Completion of a detailed feasibility study and business plan that would
include:
o More accurate estimates of the costs to build and operate the system
o More detailed system planning and design including route selection
o Development of necessary financial system(s)
Page 46
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
•
•
•
o Development of policies and procedures so that power can be
delivered to each community in a safe, reliable and cost effective
manner, and
o Determination of the appropriate kind of business entities that will
distribute power to community members and businesses
ƒ Independent power authorities which buy their power from the
transmission company and reselling it in the community
ƒ Or regional single entity serving all customers
Application for a leave to construct with the Ontario Energy Board
Provincial environmental assessment and possibly a federal EA if federal
funding is part of the funding package
Negotiations with Hydro One Remote Communities and the Independent
Power Authorities to take over the distribution systems in their communities
which may include distribution system assessments and environmental
sampling to determine if there is contamination at the sites due to diesel fuel
spills
Page 47
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
11.0 Recommendations
The recommended configuration, Option 5, should be subjected to further analysis
once support or buy-in has been obtained from off-grid communities impacted, and
they have agreed in principle to the routing and connectivity of the proposed
transmission line. In making the decision to move forward with additional analysis of
the proposed concept, the following benefits should be considered.
The proposed concept provides remote communities with:
• Reliable, safe electricity at a reasonable cost
• Broadband fibre optic telecommunications (tele-health, distance education,
high speed internet, cable TV, improved telephone service, etc.) if appropriate
equipment is available at both termination points to the HONI network.
• An electricity supply that is no longer an impediment for community growth,
including building of:
• Homes
• Schools
• Arenas
• Community businesses
• Construction jobs and spin-off economic benefits created during the building
of the network
• Long term employment opportunities in the local electricity systems:
• skilled distribution tradesmen
• power line trades staff
• electricians
• vegetation management
• management & administrative staff
• Opportunity for First Nations to have equity to share in the project
• Lower environmental emissions
The proposed project also enables:
• Development of renewable generation projects– up to 200 MW of small hydro
and wind projects identified in the area
• Potential mining projects that are not economically viable without availability
of an affordable electricity supply
The following sections outline a process for moving this project forward with the First
Nations communities.
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
12.0
Next Steps
This section provides an overview of the recommended next steps for the project
based on the recommended configuration contained in this report. Since both the
technical and cost evaluation (Class C) presented in this report have been done at a
preliminary level, additional follow-up analysis at a more detailed level is required
before any final decision can be made to move forward with this concept.
Step 1 – Consultations with Stakeholders
•
Support or buy-in by the Off-Grid communities impacted, in order to move
forward;
•
Discussions with interested parties should be conducted to obtain technical
feedback on the transmission line concept;
•
On-going communications and/or preliminary consultations with First Nations
communities using the process outlined in Section 13.0 of this report;
•
Discussions with the owner of the private line at the termination point at
Musselwhite Mine (Goldcorp Inc.); and,
•
Discussions with sources of funding to support more detailed analysis including:
MEI, INAC, FedNor, and potential transmission partners.
Step 2 – More Detailed Analysis
•
If the transmission line routing as presented in this report is accepted by
stakeholders, then a more detailed analysis should be conducted that would
include the following:
- load flow analysis that would test the system with up to 200 MW of
generation development and increased mining loads;
- more accurate line routing and cost estimate;
- on-going and enhanced communications with Off-Grid communities; and
- at the present time no assessment has been made as to the environmental
impact of the proposed solution; some preliminary study is required in this
area.
•
If, as a result of discussions with stakeholders, other configurations or
modifications to the route are proposed, then these options could be assessed at
a high level to eliminate options that are not feasible.
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Step 3 – Pursue Other Incentives and Financial Assistance
•
The Feed-in Tariff (FIT) Program could also be used to make this project more
attractive by assisting in the development of the hydro resources required to
support this project.
•
HONI is looking at a radial supply to Whitesands and Gull Bay from the 230-kV
line at Little Jackfish. If this goes forward, the cost of Option 5 would be reduced.
•
Reduction of carbon footprint and carbon credits.
Page 50
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
13.0 Proposed Process for Community Engagement
13.1
Purpose
The purpose of an engagement plan is to:
•
Provide information to the remote community members about their supply of
electricity;
•
To develop a community information base that will allow the decision makers
to receive effective community advice in the selection of an electricity supply
option to meet their present and future community electricity needs in a safe,
reliable and cost effective manner; and
•
Enable community decision makers to select and support the transmission
option as the preferred option for electricity supply.
13.2
Key Messages
1. Cost of Generation and its’ impact on the community
2. Electricity Rates and their impact on the community
3. Independent Power Authority communities and Hydro One Remote
Communities - the differences and why
4. Local economic impact
5. Why transmission?
13.3
Message Format
The information that will need to be provided to the communities will be sourced from
the report and should be prepared in the following formats:
1. Briefing Notes
2. Community Presentations
3. Press Releases
a. Newspaper
b. Radio
c. Community Television
4. Question and Answers for community consumption
Page 51
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
13.4
1.
2.
3.
4.
Specific Message Content
Financial Cost of Generation solutions in a kWh cost
Environment and its potential indirect benefits
Fibre optic extension
Description of Technology(s) with associated human resource requirements to
operate:
a. Transmission, and
b. Fibre Optic Telecommunications
5. Other Factors:
a. Rates Structures
b. Independent Power Authorities
c. Hydro One Remote Communities Inc.
d. Regulation
6. Potential Developments
a. Hydro Electric
b. Mining
c. Tourism
d. Forestry
13.5
Audience
1. Electricity rate payers in the communities:
a. Residential
b. Commercial
c. Governments
2. Chiefs and Councils and their supporting organizations
3. Ontario and Canadian Politicians and their policy and program staff.
13.6
Specific Engagement Strategy
The delivery of the messages concerning electricity supply in the remote
communities needs to reflect the regional nature of the issue and how each
community is serviced from their various internal organizations. Therefore, we
suggest the following structure for information dissemination and response from the
communities:
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
1. Development of a website that would contain all information that will be used
on community visits. Summaries of the community visits would also be
placed on the site.
2. Development of a 2 page glossy handout for inclusion with the final report to
outline highlights and to heighten awareness of the transmission option for the
communities.
3. Development and translation of materials will be used by Nishnawbe Aski
Development Fund (NADF) and or by the Nishnawbe Aski Nation (NAN) and
other organizations. The purpose of this process is to ensure that all
communications get to the communities and that the purpose is consistent.
4. Engagement with community members will be undertaken by the First Nations
and their organizations.
a. Request and advertise information sessions in the community from
Chief and Councils, preferably soon after general information is
released in the press,
b. Set up briefing session(s) with Chief and Council,
c. Set up information question and answer community sessions with
community,
d. Prepare reports following the community information sessions which
will be distributed to the community leadership.
Discuss the
outcome(s) of community meetings and the reports with the
Community leadership and determine the support for the transmission
project. It is also expected that if there any issues identified, they will
be clearly communicated to the project team.
5. If the direction from the communities is positive, or positive with concerns,
then appropriate First Nation and Independent First Nation resolution(s) will
be developed which will outline the go forward strategy for the development of
a regional transmission based electricity supply option.
Page 53
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
APPENDIX A
MAP
Page 54
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
APPENDIX B
TECHNICAL DATA
Page 55
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
APPENDIX B1 – ESTIMATED LINE LENGTHS FOR POWER
FLOW ANALYSIS Table B1.1: Line Segments Comprising the 115-kV Backbone
“From” Station RED LAKE Hydro‐Gen site W1 Pikangikum Poplar Hill Deer Lake Hydro‐Gen site W2 Hydro‐Gen site W3 Sandy Lake Keewaywin (Couchiching) Hydro‐Gen site W4 Muskrat Dam Hydro‐Gen site W5 Bearskin Lake Kitchenuhmaykoosib Inninuwug Wapekeka Kasabonika Lake Wunnumin Kingfisher Lake “To” Station Hydro‐Gen‐W1 Pikangikum Poplar Hill Deer Lake Hydro‐Gen‐W2 Hydro‐Gen‐W3 Sandy Lake Couchiching Hydro‐Gen‐W4 Muskrat Dam Hydro‐Gen‐W5 Bearskin Lake Kitchenuhmaykoosib Inninuwug Wapekeka Kasabonika Lake Wunnumin Kingfisher Lake Musselwhite Total Length of the backbone (km) Page 56
Length (km) 30 20 40 60 35 40 20 50 35 45 25 50 65 35 60 80 40 65 795 Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Table B1.2: Line segments comprising 44-kV Radials off the 115-kV
backbone
“From” Station “To” Station Length (km) North Spirit Lake Keewaywin Wawakapewin Nibinamik/Summer Beaver Webequie North Caribou Lake/Weagamow Sachigo Lake 55 15 20 45 75 70 75 Total length of 44‐kV radials off the 115‐kV backbone (km) 355 Hydro‐Gen Site W2 Couchiching Kasabonika Lake Wunnumin Nibinamik/Summer Beaver Muskrat Dam Muskrat Dam Table B1.3: Line Segments comprising 44-kV Radials off the extension
of the 240-kV HONI line
“From” Station “To” Station Landsdowne House/Neskantaga Whitesands
Gull River
25 60 70 55 Total length of 44‐kV radials off 240‐kV line extension (km) 210 Albany River Hydro Gen Site W6 Eabametoong Little Jackfish Substation Whitesands Eabametoong Length (km) Page 57
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
APPENDIX B2 – DETAILS OF THE TECHNICAL ANALYSIS
B2 System Performance Analysis
The performance of the proposed transmission concept is studied under a variety of
situations, including different system loading conditions and transmission facilities
being out of service (contingencies), to establish its suitability for operating as an
integral part of the Hydro One power grid. For a feasibility study, system
performance is typically assessed by conducting power flow analysis of the
integrated system.
B2.1 Scenarios for System Performance Assessment
In this study, performance of the proposed concept has been assessed for sets of
demand, generation, and network configuration scenarios, described below.
Load and Generation Scenarios
Two sets of load and generation scenarios have been considered. The chosen load
scenarios are:
•
•
•
2029 peak demands,
Base demands (50% of 2029 peak demands),
Low demands (0% of 2029 peak demands)
The selected generation scenarios are
•
•
•
All demands are supplied by the ISEO-controlled grid
Demands are supplied primarily by hydro plants at Muskrat Dam Lake and
Wunnumin (with some power exported to the south)
Demands are supplied by many small power plants across the system
(with some power exported to the south)
All 9 combinations of the above load and generation scenarios have been
considered.
Two cases have special significance: 1) low demand with no local generation; and,
2) peak demand with no local generation. The first case corresponds to system cold
start, while the second correspond to winter peak load conditions when hydro
generation resources may not be available. These two conditions are used to set
the upper and lower limits on VAR requirements at compensation points.
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
The scenarios where local generation (due to the two relatively large, strategically
located hydro plants, or many small ones) exceed the local demand significantly are
important as they allow an examination of the backbone’s capability to export power
to the south under different outage conditions.
Network Contingency Scenarios
Seven important lines have been selected for performing contingency analysis based
on occurrence of a single line outage within the system (known as a Category B
event). These contingency cases are also divided into two groups: those involving
the proposed network solution and those concerning the IESO-controlled power grid.
Cases belonging to the first group are:
•
•
•
Loss of the line segment connecting Red Lake to Pikangikum
Loss of the line segment connecting Kingfisher Lake to Musselwhite Mine
Loss of the line segment connecting Muskrat Dam Lake to Bearskin Lake
The first two outages disconnect the arc from the IESO-controlled power grid at its
points of interconnection, while the last outage breaks up the arc, forcing generation
of the strategically located Muskrat Dam to be diverted to one side of the arc.
The contingency cases falling under the second group are:
• Loss of the line M1M, connecting Pickle Lake to Musselwhite Mine
• Loss of the line E2R, connecting Red Lake to Ear Falls
• Loss of the line E1C, connecting Ear Falls to Pickle Lake
• Loss of the line LJF, connecting Little Jackfish hydro plant to Pickle Lake
The first two outages are important as they target lines that establish electrical
connection between the IESO-controlled power grid and the proposed transmission
solution. The last two outages are included since the affected lines are involved in
transferring power to the proposed transmission concept.
B2.2 System Performance under Normal Conditions
The power flow results for the above load and generation scenarios are too
voluminous to be included here. A summary of the results is provided below:
•
For all tested scenarios, the loadings of the transmission facilities forming the
proposed solution (Fig. 6.6) are well within their prescribed thermal limits;
Page 59
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
•
There is need for voltage support at only four points within the system to have an
excellent voltage profile under all 9 scenarios. It is possible to satisfy voltage limit
requirements with only three VAR compensation points. That, however, leads to
larger VAR sources and increased spread between the lowest and the highest
voltage levels in the area;
•
Some voltage support is needed at Pickle Lake and Ear Falls under most
simulated conditions;
•
Transmission losses are generally small. This is irrespective of the fact that more
than 500 km of lines are operating at 44-kV.
The power flow analysis did not include radial connections to Marten Falls,
Peawanuck or Fort Severn at this time. Further analysis would be required if these
communities are connected.
B2.3 System Performance under Contingencies
The performance of the system has been analyzed for the seven contingency cases
with the communities demand set at their 2029 peak power demands and the
required generation provided according to the three generation scenarios (see
Section 7.2.1). When the analysis is performed for the two generation scenarios
that allow for local generation, the results are quite encouraging. They indicate that:
•
The proposed concept can withstand losing any one of its own line
segments and maintain service to the connected communities. All
equipment remains operating within the applicable operational limits
under the contingency conditions.
•
The system survives the loss of M1M, E1C, E2R, or LJF line, with the
help of some extra VAR support at Ear Falls and Pickle Lake.
Some complications arise for certain contingency cases when the required
generation is entirely supplied by the Hydro One network (i.e. when no local
generation is present). For this generation scenario:
•
The proposed transmission solution can endure loss of any one of its
own line segments;
•
Loss of the lines E1C and LJF can be tolerated by the system, although
some buses take on relatively high voltages levels following the line
outage; and
Page 60
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
•
The power flow fails to converge to a solution following loss of the lines
M1M and E2C, indicating potential voltage stability problem.
The encountered difficulty is due to the significant loads connected to the grid at
Musselwhite and Red Lake buses. These loads are normally served by the HONI
network (see Fig. B2-1). As shown in Fig. B2-2 and B2-3, the loss of either line E2R
or M1M opens the proposed arc at one end and make the arc the sole supplier of
power to these relatively large loads; thus, making the arc prone to voltage collapse.
The situation is not, however, hopeless and there are several possible remedies for
that, including:
a) The construction of the proposed solution could be coordinated with
developments of hydro generation sites within the area. In particular, Muskrat
Dam with 53MW generation capacity has a highly strategic location within the
proposed supply arc and can serve either of the two end-loads in emergencies.
Assuming standard synchronous generators at the dam, their presence can also
significantly reduce VAR compensation requirements within the arc. The
Wunnumin hydro site with 14MW generation capacity is also important, as it is
located relatively close to the Musselwhite Mine and can supply part of the Mine’s
demand; thus, reducing line flows on E1C and M1M and drastically decreasing
their losses.
Proposed Transmission Concept
Red
Lake
E2R
Musselwhite
Mine
40 MW
33 MW
M1M
Ear
Falls
Pickle
Lake
E1C
E1D
LJF
Fig. B2-1: Large loads at Musselwhite and Red Lake with E2R & M1M in service
Page 61
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Proposed Transmission Concept
Red
Lake
E2R
Musselwhite
Mine
40 MW
33 MW
M1M
Ear
Falls
Pickle
Lake
E1C
E1D
LJF
Fig. B2-2: System configuration following loss of E2R
Proposed Transmission Concept
Red
Lake
E2R
Musselwhite
Mine
40 MW
33 MW
M1M
Ear
Falls
Pickle
Lake
E1C
E1D
LJF
Fig. B2-3: System configuration following loss of M1M
b) Using Special Protection Schemes (SPS) will enable the proposed concept to
operate until hydro generation developments within the area take place. Two
separate SPSs will be needed at Musselwhite and Red Lake substations to
operate upon losing M1M or E2R, respectively. These SPSs are simply Load
Rejection Schemes, shedding loads at these sites following loss of their
monitored lines.
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
These schemes will be temporary as they become unnecessary once generation
resources within the area are developed.
c) Reinforcing E2R and M1M. The needed reinforcement will be in the form of the
“twining” the two lines. These reinforcements will be expensive, but they could be
justified if extensive development of wind generation resources in the area
happens, and the need for larger power transfers between the proposed network
and the Hydro One network arise.
Page 63
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
APPENDIX B3 - Diesel Generation Capacities at Remote
Communities
2009 First Nations Community Keewaywin (Couchiching) Marten Falls Nibinamik/Summer Beaver Pikangikum** Poplar Hill Wawakapewin Peawanuck Keewaywin (Niska) Eabametoong Muskrat Dam North Spirit Lake Wunnumin Bearskin Lake Kitchenuhmaykoosib Inninuwug Deer Lake Fort Severn Kasabonika Lake Kingfisher Lake Landsdowne House/Neskantaga North Caribou Lake/Weagamow Sachigo Lake Sandy Lake Wapekeka Gull Bay Whitesands Webequie 2029 Population Existing capacity (kW) Peak demand
(kW) ‐‐ ‐‐ ‐‐ Population Required Capacity (kW) Peak demand (kW) ‐‐ ‐‐ ‐‐ 371
675
548
817 ‐530.4
1205.4
398
2322
482
27
291
408
1411
365
485
588
608
705
1250
600
55
600
350
1565
650
365
1115
650
402
1193
463
61
341
292
883
591
511
772
835
876 5108 1061 59 640 897 3105 804 1066 1294 1337 ‐179.0
‐1375.1
‐417.9
‐78.9
‐150.0
‐292.9
‐377.0
‐649.2
‐760.0
‐583.3
‐1187.6
884.0
2625.1
1017.9
133.9
750.0
642.9
1942.0
1299.2
1125.0
1698.3
1837.6
1075
974
547
1050
381
1600
675
650
1000
650
1371
820
634
941
594
2365 2143 1203 2309 838 ‐1416.2
‐1127.8
‐745.6
‐1070.6
‐657.2
3016.2
1802.8
1395.6
2070.6
1307.2
365
705
739
804 ‐921.0
1626.0
855
560
2571
415
550
447
757
650
650
2250
705
550
1450
650
1169
938
2784
424
250
509
754
1880 1232 5655 913 1211 983 1666 ‐1921.5
‐1412.6
‐3873.5
‐227.2
0.9
330.3
‐1008.1
2571.5
2062.6
6123.5
932.2
549.1
1119.7
1658.1
**For reference only - not included in financial calculations
Page 64
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Appendix C
Community Engagement Contacts
Page 65
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Community
Contact
Address
Independent First Nations
Mishkeegogamang First
Nation
Mocreebec Council of the
Cree Nation
Sandy Lake First Nation
Weenusk First Nation
Chief Connie GrayMcKay
New Osnaburgh ON P0V 2HO
807-928-2148
807-928-2077
Chief Randy Kapashesit
P.O. Box 4
Moose Factory ON P0L 1W0
705-658-4769
705-658-4487
Chief Adam Fiddler
P.O. Box 12
Sandy Lake ON P0V 1V0
807-774-3421
807-774-1040
Chief George Hunter
P.O. Box 1
Peawanuck ON P0L 2H0
705-473-2554
705-473-2503
Independent First Nations Alliance
Muskrat Dam First Nation
Pikangikum First Nation
Lac Seul First Nation
Chief Gordon Beardy
P.O. Box 140
Muskrat Dam ON P0V 3B0
807-471-2573
807-471-2540
Chief Peter Quill
General Delivery
Pikangikum ON P0V 1L0
807-773-5578
807-773-5536
Chief Clifford Bull
P.O. Box 100
Hudson ON P0V 1X0
807-582-3211
807-582-3493
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Community
Contact
Address
Keewaytinook Okimakanak
Deer Lake First Nation
Fort Severn First Nation
Keewaywin First Nation
MacDowell Lake First Nation
North Spirit Lake First Nation
Poplar Hill First Nation
Chief Roy Dale Meekis
P.O. Box 39
Deer lake ON P0V 1N0
807-775-2141
807-775-2220
Chief Matthew
Kakekaspan
P.O. Box 149
Fort Severn ON P0V 1W0
807-478-2572
807-478-1103
Chief Joe Meekis
P.O. Box 90, 202 Band Office Road
Keewaywin ON P0V 3G0
807-771-1210
807-771-1053
Chief Eli James
Chief Rita Thompson
Chief Dennis King
P.O. Box 321
Red Lake ON P0V 2M0
807-735-1381
807-735-1383
General Delivery
North Spirit Lake ON P0V 2G0
807-776-0021
807-776-0026
P.O. Box 1
Poplar Hill ON P0V 3E0
807-772-8856
807-772-8876
Matawa First Nations
Aroland First Nation
Chief Sam Kashkeesh
P.O. Box 10
Aroland ON P0T 1B0
807-329-5970
807-329-5750
Constance Lake First Nation
Chief Arthur Moore
P.O. Box 4000
Calstock ON P0L 1B0
705-463-4511
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Community
Contact
Address
705-463-2222
Eabametoong First Nation
Ginoogaming First Nation
Hornepayne First Nation
Long Lake #58 First Nation
Marten Falls First Nation
Neskantaga First Nation
Nibinamik First Nation
Webequie First Nation
Chief Lewis Nate
Chief Celia Echum
P.O. Box 298
Eabamet Lake ON P0T 1L0
807-242-7221
807-242-1440
P.O. Box 89
Long Lac ON P0T 2A0
807-876-2242
807-876-2495
Chief Laura Medeiros
P.O. Box 1553
Hornepayne ON P0M 1Z0
807-868-2306
Chief Allen Towegishig
P.O. Box 609
Long Lac ON P0T 2A0
807-876-2292
807-876-2757
Chief Harry Baxter
General Delivery
Ogoki Post ON P0T 2L0
807-349-2509
807-349-2511
Chief Roy Moonias
Neskantaga Reserve #239 P.O. Box
105
Lansdowne House ON P0T 1Z0
807-479-2570
807-479-1138
Chief Judas Beaver
General Delivery
Summer Beaver ON P0T 3B0
807-593-2131
807-593-2270
Chief Cornelius
Wabasse
P.O. Box 268
Webequie ON P0T 3A0
807-353-6531
807-353-1218
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Community
Contact
Address
Mushkegowuk Council
Attawapiskat First Nation
Chapleau Cree First Nation
Fort Albany First Nation
Kashechewan First Nation
Missanabie Cree First Nation
Moose Cree First Nation
Taykwa Tagamou Nation
(New Post)
Chief Theresa Hall
P.O. Box 248
Attawapiskat ON P0L 1A0
705-997-2166
705-997-2116
Chief Keith Corston
P.O. Box 400
Chapleau ON P0M 1K0
705-864-0784
705-864-1760
Chief Andrew Solomon
P.O. Box 1
Fort Albany ON P0L 1S0
705-278-1044
705-278-1193
Chief Jonathan Solomon
P.O. Box 240
Kashechewan ON P0L 1S0
705-275-4440
705-275-1023
Chief Glenn Nolan
174B Hwy 17E
Garden River ON P6A 6Z1
705-254-2702
705-254-3292
Chief Norm Hardisty
P.O. Box 190
Moose Factory ON P0L 1W0
705-658-4619
705-658-4734
Chief Dwight Sutherland
R.R.#2 - Box 3310
Cochrane ON P0L 1C0
705-272-5766
705-272-5785
Shibogama First Nations Council
Kasabonika Lake First Nation
Chief Gordon Anderson
Page 69
P.O. Box 124
Kasabonika Lake ON P0V 1Y0
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Community
Contact
Address
807-535-2547
807-535-1152
Kingfisher Lake First Nation
Wapekeka First Nation
Wawakapewin First Nation
Wunnumin Lake First Nation
Chief James Mamakwa
P.O. Box 57
Kingfisher Lake ON P0V 1Z0
807-532-2067
807-532-2063
Chief Norman Brown
P.O. Box 2
Wapekeka ON P0V 1B0
807-537-2315
807-537-2336
Chief Joshua Frogg
Shibogama First Nations Council,
P.O. Box 449
Sioux Lookout ON P8T 1A5
807-442-2567
807-442-1162
Chief Rod Winnipetonga
P.O. Box 105
Wunnumin Lake ON P0V 2Z0
807-442- 2559
807-442-2627
Wabun Tribal Council
Flying Post First Nation
Beaverhouse First Nation
Brunswick House First Nation
Chief Murray Ray
P.O. Box 1027
Nipigon ON P0T 2J0
807-887-3071
807-887-1138
Chief Gloria McKenzie
26 Staion Road North
P.O. Box 1022
Kirkland Lake ON P2N 3L1
705-567-2022
705-567-1143
Chief Rene Ojeebah
P.O. Box 117
Chapleau ON P0M 1K0
705-864-0174
705-864-1960
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Community
Contact
Chapleau Ojibwe First Nation
Matachewan First Nation
Mattagami First Nation
Wahgoshig First Nation
Address
Chief Anita Stephens
P.O. Box 279
Chapleau ON P0M 1K0
705-864-2910
705-864-2911
Chief Richard Wincikaby
P.O. Box 160
Matachewan ON P0K 1K0
705-565-2230
705-565-2585
Chief Walter Naveau
P.O. Box 99
Gogama ON P0M 1W0
705-894-2072
705-894-2887
Chief David Babin
RR#3
Matheson ON P0K 1N0
705-273-2055
705-273-2900
Windigo First Nations Council
Bearskin Lake First Nation
Chief Rodney McKay
P.O. Box 25
Bearskin Lake ON P0V 1E0
807-363-2518
807-363-1066
Cat Lake First Nation
Chief Mathew
Keewaycabow
P.O. Box 81
Cat Lake ON P0V 1J0
807-347-2100
807-347-2116
Koocheching First Nation
Chief William Harper
P.O. Box 32
Sandy Lake ON P0V 1V0
807-774-1576
807-737-3133
North Caribou Lake First
Nation
Chief Jowin Quequish
General Delivery
Weagamow Lake ON P0V 2Y0
807-469-5191
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Community
Contact
Address
807-469-1315
Sachigo Lake First Nation
Slate Falls First Nation
Whitewater First Nation
Chief Titus Tait
P.O. Box 51
Sachigo Lake ON P0V 2P0
807-595-2577
807-595-1119
Chief Glen Whiskeyjack
48 Lakeview Dr.
Slate Falls ON P0V 3C0
807-737-5700
1-888-431-5617
Chief Arlene Slipperjack
307 Euclid Avenue, Suite 414
Thunder Bay ON P7E 6G6
807-622-8713
807-577-5438
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
APPENDIX D
SUMMARY OF STATION COSTS
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Summary of Station Costs - NADF Off-Grid Power*
Item
All Stations 44kV- Nibinamik, Eabametoong, North Spirit
Lake, Neskantaga, Weagomow, Sanchigo Lake, Gull Bay,
White Sands, Webequie
Cost Each
Qty
Total
$1,587,600
9
$14,288,400
$1,821,600
9
Muskrat Dam 115 – 44 kV station
$4,224,600
Bear Head Lake Station 115/44 kV
With Redundancy
Each (3-phase)
Qty
Total
$2,835,000
9
$25,515,000
$16,394,400
$3,312,000
9
$29,808,000
1
$ 4,224,600
$6,840,000
1
$6,840,000
$4,044,600
1
$ 4,044,600
$6,660,000
1
$6,660,000
Wunnumin Station 115/44 kV
$8,004,600
1
$ 8,004,600
$11,160,000
1
$11,160,000
Bearskin Lake, 115 – DV
$2,631,600
1
$ 2,631,600
$2,997,000
1
$2,997,000
Albany River Station 230/44 kV
$4,935,600
1
$ 4,935,600
$8,271,000
1
$8,271,000
Little Jackfish Station
$2,070,000
1
$ 2,070,000
$2,070,000
1
$2,070,000
Red Lake Station Add SVC
$5,274,000
1
$ 5,274,000
$5,274,000
1
$5,274,000
$5,610,600
1
$ 5,610,600
$67,478,400
$7,380,000
1
$7,380,000
$105,975,000
All Stations 115kV – Pikangikum, Poplar Hill, Wawakapewin,
Keewaywin, Kitchenhmaykoosib,Deer Lake, Kasabonika
Lake, Kingfisher Lake, Wapekeka
Sandy Lake Station 115/ DV
Total Station & SVC Costs
Additional Cost to
add Redundancy
*Class C estimates
Page 74
$38,496,600
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
APPENDIX E
REGULATORY IMPACTS
Page 75
Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
E.0 REGULATORY IMPACTS
The twenty five “remote communities” in Northwestern Ontario (i.e. those currently not
connected to the Ontario transmission system) are provided with electricity either by
HORCI or via an IPA that is community owned.
Most of the electricity supplied to the remote communities is generated by diesel
generators, with a few exceptions. Diesel generators have a low initial cost, and are
generally reliable, but have drawbacks due to their high operating costs, frequent
maintenance requirements, greenhouse gas emissions, and production of noise pollution.
The main drawback to the diesel generators in the remote community environment is the
significant risk associated with getting diesel fuel to the communities, as there are no all
weather roads over which to bring the fuel. Hauling truckloads of diesel fuel over seasonal
winter roads has resulted in a number of diesel fuel spills. There are also environmental
risks associated with the transfer of the fuel to tanks in the communities, and many
communities have contaminated ground surrounding their diesel fuel tank farms as a
result. In some communities this has affected the health of the residents, and has affected
the community’s water sources.
The remote communities have no all-season road system over which to bring diesel to the
communities, and the winter road season is generally 30 to 60 days at best. Reliance on a
road system that is only open a short period of time means that if a community
underestimates the amount of diesel fuel required to keep the diesel generators operating,
the community can be left without power until fuel can be flown into the community at a
significantly higher cost. Climate change has led to shorter winter road seasons, and some
communities have encountered years when they have been unable to transport adequate
fuel into the community when the winter road system has failed due to warm weather. The
cost of flying fuel to the communities is very high, and is always an unbudgeted expense.
The remote communities are in need of a less expensive and more reliable source of
power.
E.1 Regulatory Issues
In Ontario, the responsibility for energy lies with the Provincial Government. The Ministry
of Energy is responsible for setting electricity policy for the energy sector in the province.
Prior to 1998, electricity customers in Ontario had a single source of electricity supply. The
electricity system in Ontario was a monopoly and was publicly owned. The power
produced by Ontario Hydro was purchased and distributed by about 300 local, municipally
owned utility companies to consumers, who were charged a fixed price per kilowatt hour
(kWh) that bundled together generation, transmission and distribution costs.
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
Prior to 1998, Ontario Hydro carried out most of the aspects of electricity production and
distribution including generation, transmission, and some distribution (to some large
industrial and rural customers and the Remote Communities). Ontario Hydro also acted as
the central market operator, set the pricing and also for the most part, set the market rules.
The electricity industry was substantially restructured with the passing of the new
Electricity Act in 1998, with the former monopoly Ontario Hydro being split into several
corporations, each responsible for an aspect of the electricity industry:
•
The Ontario Energy Board (OEB) is the regulator of the electricity industry and
natural gas industries, licensing the various participants in the industry, and
approving rates for licensed participants.
•
The Independent Electricity System Operator (IESO) acts as the central market
operator, runs the electricity exchange for the sale and purchasing of power and
arranges for the dispatch of electricity to distribution companies. The IESO also
performs the financial settlements on behalf of the industry.
•
The Ontario Power Authority (OPA) is responsible for central planning for the
industry.
•
The Electrical Safety Authority is responsible for setting the safety standards for
wiring installations and equipment and appliance certification.
•
The Ontario Electricity Financial Corporation owns “stranded assets” and holds the
former Ontario Hydro's $36 Billion debt.
The dismantling of Ontario Hydro had a significant effect on the ongoing operations of the
remote community system. For the first time, HORCI began to account for its fueling costs
separate and distinct from the corporate fuel bill that had included coal, natural gas and
nuclear fuels for all of Ontario. The fueling costs for the remote communities began to
attract attention when measured against other remote community costs, as fuel was now a
significant line item.
While electricity is considered to be a provincial responsibility, First Nations in Canada
have a unique fiduciary relationship with the federal government. The bulk of funding in
First Nations communities comes from Indian and Northern Affairs Canada.
E.2 The Remote and Rural Rates Assistance Program
Hydro One Remote Communities Inc. (HORCI) is one of the successor companies of the
former Ontario Hydro, and is owned by the Province of Ontario as its sole shareholder.
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
HORCI operates diesel generation and distribution facilities in twenty remote Communities,
and anticipates the addition of the community of Marten Falls to its system sometime
during the next year. HORCI also owns and operates two run-of-the-river hydro electric
generating facilities and has four demonstration wind generators.
HORCI is a licensed generator and distributor, and is considered to be unique within
Ontario’s regulatory regime. It is exempt from a number of the legal and regulatory
requirements imposed on most distributors. As a licensed generator/distributor, HORCI is
regulated by the Ontario Energy Board (OEB), which means that HORCI has to submit
their rates to the OEB for approval. The current rates are based on the cost of service,
with no regulated return on assets for the utility.
Remotes functions in a unique environment. Extremely low customer densities, a harsh climate,
and logistical challenges related to transportation, along with the absence of an integrated
transmission system and complex funding arrangements with third parties, set Remotes apart
from other Ontario electricity distributors. This unique operating environment has a profound
impact on operations and costs throughout Remotes’ service area. 1
In 2007, HORCI provided electricity to 3 332 customers, most of which (87% according to
EB-2008-0232, HORCI’s most recent rates application) pay electricity rates below the cost
of providing service. The rates structure in the HORCI communities is based on a structure
developed by the former Ontario Hydro Remote Communities and Indian and Northern
Affairs Canada.
Electrification of the remote First Nation communities began during the 1960’s with
Electrification Agreements signed between the former Ontario Hydro and Indian and
Northern Affairs Canada. Under the Agreements, the federal government paid for the initial
capital costs of the generating and distribution equipment. Indian and Northern Affairs
Canada (INAC) is responsible for funding new generation/capital upgrades and
connections associated with load growth in the communities, and HORCI is responsible for
funding capital replacements, and for any capital improvements that are not associated
with load growth. A unique cost structure known as the Standard A rate was developed,
where residential and commercial customers are subsidized by those entities receiving
government funding from either the provincial or federal government. The “Standard A”
rate continues to exist, and is approximately ten times the rates charged to residential and
commercial customers, or $0.8418 per kWh (EB-2008-0232).
The Standard A rate structure is not only used in the HORCI system, but also has served
as a basis for the development of the rate structures in the community owned IPAs. The
basic principal of this rate structure was to ensure that the residential customer on a
remote Indian reserve is charged rates similar to all other residential customers in Ontario,
1
EB-2008-0232 – Hydro One Remote Communities 2009 Distribution Rate Application – Evidence
Update Filing
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
while ensuring that this operating subsidy was contained within the Ontario Hydro operated
remote community system. This system of rates was originally developed to meet the
needs of a community where the residential customer was restricted to service in the 15 to
20 amp range. Therefore, the high rate charged to government customers which was, at
the time, substantially higher than the generation cost, allowed the total revenues in the
system to equal residential plus commercial plus Standard A billing. The amperage
restriction was removed in 1992, and the growth associated with that removal accounts for
the majority of the operating losses incurred by HORCI.
In addition to the Standard A rate structure, the HORCI system is further subsidized under
the Remote and Rural Rates Assistance Program (RRRP). Remote and Rural Rate
Protection is a program developed to assist in supporting affordable and reliable electricity
supply to rural and remote areas of the province, and is funded by all Ontario electricity
consumers through a charge of $0.001 per kilowatt hour, as part of the regulatory charges
on each consumer’s bill. This allows HORCI to charge their residential and commercial
customers rates approximately equivalent to the rates paid by an electricity customer in an
urban setting, so that customers in remote and rural areas are not penalized by the higher
cost to provide services to them.
Since 2002, HORCI has received RRRP funding of $21.1 million per year. In its most
recent rates application, HORCI is proposing to recover a total revenue requirement of
$42.5 million from its customers and from the Rural and Remote Rate Protection fund for
the 2009 test year. This represents an increase of $6.9 million, or 20% over the 2006
approved revenue requirement. In its rates submission (EB-2008-0232), HORCI is seeking
increased RRRP funds in the amount of $27.845 million per year, with the explanation that
the increase is needed due to the increased cost of diesel fuel. This amount represents
approximately 66% of the revenue requirement for the utility. Additionally the utility is
seeking to develop a variance account for the RRRP in the amount of $ 4,031,000 to
enable the utility to mitigate risks related to increased costs and to recover the existing
deficit balance from prior years. This would increase the charge to Ontario electricity
consumers to $0.0013 per kWh.
RRRP protection is set out in section 79 of the Ontario Energy Board Act, 1998 (the “OEB
Act”) and in Regulation 442/01, made under the OEB Act. Subsection 79(1) provides that
“The Board” in approving just and reasonable rates for a distributor, who delivers electricity
to rural or remote consumers, shall provide rate protection for those consumers or
prescribed classes of those consumers by reducing the rates that would otherwise apply in
accordance with the prescribed rules. The rules are set out in section 79 and Regulation
442/01. Subsection 79(3) provides that “A distributor is entitled to be compensated for lost
revenue resulting from the rate reduction provided under subsection (1)”.
The rationale underlying the RRRP Regulation is that economically challenged
communities in Ontario should be financially assisted by wealthier urban regions to ensure
that their residents have access to affordable electricity. The Ontario Government has set
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
the criteria in deciding who should be eligible to receive financial assistance under the
RRRP Regulation looking at a mix of social, political, and economic factors. Currently,
there are five categories of consumers in Ontario who are eligible to receive the RRRP
funding.
The Nishnawbe Aski Nation (NAN) continues to lobby the Ontario Government, seeking to
extend coverage under the RRRP Regulation to the communities whose electricity is
supplied by IPAs.
E.3 Issues facing Independent Power Authorities
Twelve community owned and operated IPAs provide diesel generated electricity to their
communities. Some community systems are operated by outside contractors, some are a
separate corporation from the First Nation, and some are operated by employees of the
First Nation. The IPAs are not regulated by the Province of Ontario, and operate outside of
the provincial regulatory environment. As such, they are free to set their own standards,
working protocols and rates. Some of the IPA diesel generator and distribution systems
were not built to Ontario standards and do not follow Ontario distribution code protocols.
Electricity rates differ in each IPA community, and are set based on various factors
including social concerns such as affordability for elders and other community residents. In
some communities, residents are charged a flat rate, regardless of how much electricity
they use, with elders receiving a further discounted rate. Some communities have flat
demand based charges, and others charge a monthly service fee plus a demand charge.
Some communities have maintained a rates structure similar to the Standard A structure,
where residents and businesses are subsidized by government customers.
Since 2004, the commodity price for diesel fuel has more than doubled. These significantly
increased costs have been compounded by the shortages of trained staff, and higher costs
of doing business in remote communities. This has had a devastating impact on the IPA’s
who do not have access to the RRRP subsidies available to HORCI in order to break even.
IPA’s are reliant on the electricity revenues collected plus any subsidies that are available
from Indian and Northern Affairs Canada to operate, and despite the fact that some of the
IPA’s have rates structures that are more than double those charged by HORCI, they are
still operating at a loss. Unfortunately the reality of many First Nation communities is
extremely high unemployment rates, and a high reliance on social assistance. Many
community residents are simply unable to afford their hydro bills, as many of the houses
have electric heat in the winter. Collection issues are a persistent challenge for the IPA’s.
The IPA’s provide a source of employment to some First Nations residents. In some
remote First Nations communities, unemployment rates frequently range from 65% to 95%
of the workforce, so any jobs are critical.
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
The increased price of diesel has meant that some of the IPA communities do not have the
necessary funds to pay for diesel fuel and properly maintain generating and distribution
equipment at the same time. As a result, the electrical power supply for local residents
has become unreliable. Back-up generators, which should ordinarily be reserved for
emergencies, are frequently being used to ensure an adequate supply of power on a daily
basis. Important maintenance work on the diesel generators and distribution systems has
been delayed due to a lack of funding, which could be disastrous from a health and safety
perspective.
Recently, as a result of the significant challenges faced, the IPA’s have decided to form
their own IPA agency to work collectively, and have agreed to sign a Memorandum of
Understanding to form this agency.
E.4 Potential Impacts of Grid Connection
There has been much discussion about how to deal with the deficiencies in the IPA
systems, including becoming part of the HORCI system, banding together to operate as a
regional entity, and purchasing HORCI to take over the entire system. There has also
been much discussion and lobbying to connect the remote communities to the IESO grid.
Currently, the IPA’s operate and maintain the diesel generators, operate and maintain the
distribution systems, perform billings and collections and connection and disconnections,
but are not regulated by the Ontario Government. Connecting to the IESO controlled grid
would almost certainly involve becoming regulated by the Ontario Energy Board, and
having to comply with the rules and regulations associated with grid connection, including
becoming licensed distributors and generators, and bringing the system up to Ontario’s
transmission and distribution code standards. This would require quite a bit of capacity
building for the system operators, as well as a significant influx of funding to pay for the
required system upgrades.
Connecting most of the remote communities to the IESO controlled grid would have a
number of impacts. The diesel generators in the communities could be placed on standby
for back up generation, significantly reducing air and noise pollution in the communities.
Rates charged to residential customers would likely be standardized, depending on which
entity took over distribution in the community. The distribution system in each community
would need to be brought up to Ontario Standards, and Ontario’s Distribution System Code
would apply. The transmission company that built the line to connect the communities
would add the cost of building the new transmission line to its rates base, and would likely
become part of the transmission pool in the province. The Transmission System Code
would apply to the transmitter. This is the key element to the building and operations of a
transmission line to service the communities. A licensed transmitter operating an IESO
controlled asset would be able to distribute the capital costs of building the system over a
40 year debt financing model.
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
E.5 Smart Meter Initiative
In November 2005, the Ontario Government passed measures that will see smart meters
installed in all Ontario homes by 2010. The existing meters in most communities measures
the total amount of electricity used over an entire billing period. A Smart Meter
automatically records when electricity is used, recording the consumers’ total electricity
consumption hour by hour, allowing for time of day electricity billing. This will allow the
government to move from a standardized price for electricity to time of use pricing, where
different prices would apply at different times of the day. Prices rise and fall over the
course of the day and tend to drop overnight and on weekends based on the amount of
supply available and our levels of demand. When demand is highest, prices will be higher,
as sometimes the province has to import electricity from other jurisdictions at a higher price
during these times. At times of low demand, prices will be lower.
It has been estimated that each smart meter costs approximately $500 2. The Ontario
Energy Board has decreed that the cost of the Smart Meter initiative will be recovered over
time through the electricity rates paid by customers over time. The board expects it to cost
more than $1 billion to install the meters across the province, which is expected to add
between one and four dollars a month to the average electricity bill.
It is unlikely that the remote communities, particularly the IPA’s could comply with this
legislation as they do not have the financial resources required to carry out the changeover
of the meters, and associated software/hardware. They could ask to be exempted from the
Smart Meter legislation if they are connected to the IESO controlled grid.
E.6 Potential Impact of Grid Connection on the Winter Road System
Funding for construction and maintenance of the winter roads systems to the remote
communities is provided by the provincial and federal governments, but not in adequate
amounts to subsidize the entire costs of building the road system. The tolls charged to
trucks hauling diesel fuel to the remote communities subsidizes the costs associated with
building the winter road system, which allows residents to be charged reduced rates (or no
tolls at all) to use the winter roads in the province.
One of the impacts of connecting the James Bay communities of Attawapiskat, Fort Albany
and Kashechewan to the IESO controlled grid was a reduction of tolls on the winter road,
and alternative funding had to be sourced. In the case of these three communities,
approximately five million liters of fuel per year were removed from the goods hauled on
the winter road system.
2
INDEPTH: ENERGY, Smart meters: FAQ’s, CBC News Online | November 3, 2005
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Transmission Line Concept (TLC) for Northern Ontario Off-Grid Communities
E.7 Green Energy Act
In May 2009, the Government of Ontario passed the Green Energy and Green Economy
Act (GEA). The Act is intended to facilitate the development of additional “Green Energy”
in the province and further encourage energy conservation in the province. The Act also is
designed to facilitate the involvement of First Nations and Metis communities in the
renewable energy sector of the province.
The Green Energy Act amends twenty one statues, including the Electricity Act, the
Ministry of Energy Act, the Ontario Energy Board Act, the Clean Water Act and the
Environmental Bill of Rights Act, among others. The Act repeals the Energy Efficiency Act
and Energy Conservation Leadership Act.
The Act should streamline approvals of renewable energy projects, including water, wind,
solar, biomass and geothermal energy projects.
Renewable energy projects will go
through one approval process under the Environmental Protection Act, replacing the past
requirements of various approvals under various pieces of legislation. Renewable energy
projects will be exempted from municipal controls and approvals, although the government
has retained the right to set rules and standards for planning, notice and consultation,
design, siting, and reporting for renewable. A Renewable Energy Facilitation Office will be
created within the Ministry of the Environment to assist proponents through the approvals
process, and the government is hoping to guarantee a six month review process (not
including any appeals).
A Feed in Tariff (FIT) process has been developed that will enable the development of
renewable resources through long term contracts. The FIT program provides a simple
standardized method of procuring contracts for renewable energy supply. The FIT includes
standard rules, standard contracts, standard pricing and provisions for domestic content
and Aboriginal and community involvement. Different prices will be offered for different
technologies and project sizes. Generators of renewable energy will no longer be
competing to be a lowest cost producer of power.
It is unclear whether renewable energy projects that are not connected to the IESO
controlled grid will be eligible for the FIT program. One of the intentions of the Green
Energy Act is to offset greenhouse gas emissions, so the OPA would likely be very
interested in projects that could replace the high-cost diesel generators in the remote
communities. The OPA indicated that they are considering a specific pricing schedule
under the FIT program for the remote communities that would facilitate renewable energy
development and remove diesel generators from Ontario’s electricity mix.
The
representative acknowledged that the cost of working in the remote communities was
significantly higher than the rest of Ontario, and that the OPA was attempting to determine
what the specific pricing schedule for the remotes should be.
Under the Green Energy Act, the Minister of Energy has been given increased power,
including the power to direct the Ontario Government Ministries on energy and
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environmental standards in Government buildings, to direct the Ontario Power Authority to
develop renewable resources, transmission and distribution, and to direct the Ontario
Energy Board to facilitate development of a “Smart Grid”. The Minister may also direct the
Ontario Energy Board to enable the connection of renewable projects to the grid, through
system reinforcements or expansions. Further, the Minister of Energy also could, if he
chooses, to issue a shareholders directive to the provincially owned transmitter, Hydro One
Networks Inc. to undertake the expansion of the IESO grid.
The GEA is a significant shift away from the previous mandate of the Ontario Energy Board
which was to “ensure adequacy, safety, sustainability and reliability of electricity supply in
Ontario through responsible planning and management of electricity resources, supply and
demand. Effectively, the Ontario Energy Board acted as a watchdog for the monopoly
businesses of transmission and distribution, and ensured that Ontario consumers were
protected. Under the GEA, transmitters and distributors must connect renewable energy
projects that make a written request for connection and meet all technical, economic and
other requirements. The transmitters and distributors must provide priority connection to
renewable energy projects that meet these requirements. Transmitters and distributors are
also required by their respective licenses to prepare plans for the expansion of their
systems to accommodate renewable generation and the smart grid.
The GEA is now putting the OEB in the position of encouraging system growth and
expansion, as compared to its previous mandate of providing a prudent financial check on
expansions. This may be very advantageous for the remote communities that are seeking
to be connected to grid power. It appears that the Minister of Energy has the power to
direct the Ontario Energy Board to facilitate connection of the remote communities to the
grid. His rationale could be that the greenhouse gas emissions that will be offset by
construction of a transmission system to the remotes and putting the diesels on standby is
considerable. The Ontario Power Authority’s Integrated Power System Plan (IPSP)
identified potential renewable energy projects in the North West of Ontario that have not
been economically viable without a method to deliver the electricity to the main grid. A
transmission line extension to the remote communities would potentially facilitate the
development of some or all of these projects. The OPA recently commissioned a wind
study in the northwest of Ontario to further define the wind generation potential of the area.
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APPENDIX F
GLOSSARY OF TECHNICAL TERMS
Load Flow (Power Flow) Study: A load flow study entails electrical modeling of the power
system components (generators, loads, transmission lines, transformers, etc.) and
simulation of the system line flows and bus voltages for a specific set of load and
generation values. For the system to be operationally acceptable, the resulting line flows
and bus voltages must stay within their IESO prescribed limits.
Category B Event: Refers to a single power system component being out-of-service. The
event could be caused by a power system fault, resulting in the protection system
disconnecting the component. Impacts of a Category B event on a power system are
assessed by comparing pre- and post-event system conditions, obtained by performing
load flow studies.
Contingency Analysis: Is performing systematic load flow studies for a set of Category B
events to identify weaknesses in the power grid. A power system that can withstand the
impacts of all selected Category B events is deemed to be operationally robust (strong).
Load Rejection Scheme: A protection system strategy that, when some power system
components approach their operational limits, starts disconnecting loads from the system
to bring the components back within their acceptable operating limits.
Protection System: A set of relays which command breakers to disconnect a power
system component when that component operates outside its operational limits.
Special Protection Schemes (SPS): A protection system strategy that, when some power
system components approach their operational limits, start to disconnect specific
components from the system to bring back the components into their limits.
Static VAR Compensator (SVC): An electrical component added to the transmission
system to ensure that substation voltages stay within their limits during normal operations,
and also following any Category B event, under different load conditions
VAR Compensation: This term defines the action of any controllable/switchable power
system device that can produce or absorb reactive power. Static VAR Compensators are
one example of such devices.
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