Thursday 29 October 2015

First Nations Power Authority of Saskatchewan

For many years if you wanted hydro-electrical power in our province, you needed a connection to SaskPower’s province-wide grid. But now circumstances have changed.

Rapid advancement in renewable energy, battery storage technologies, and micro grid options provide individuals and communities with an opportunity to generate power themselves or at least increase reliability and lower power bills. Economics are changing too, and the self-generation costs per unit of electricity (the kilowatt-hour or kWh) with solar panels are at parity with retail power costs from SaskPower.

First Nations Power Authority is leading the way as it assists First Nations communities to meet their own energy needs, placing First Nations’ interests front and centre.

First Nations Power Authority of Saskatchewan
Communities and power project development companies approach SaskPower with their needs and proposals, but there isn’t always a good fit between the two perspectives. “Developers have a lot of different irons in the fire across Canada, North America, and globally,” says Ian Loughran, Vice-President of Projects and Business Development for First Nations Power Authority (FNPA) of Saskatchewan. “For a typical power project development company, the close rate on large-scale projects (over 10 megawatts) is about 5 to 10 per cent. The successful projects typically cover the business development costs of all the others.”

This approach doesn’t always work for local communities, such as First Nations reserves. They have very specific needs and requirements but generally don’t have the expertise to identify valid options and have limited control over the final decision.

First Nations Power Authority of Saskatchewan (FNPA) was established to assist First Nations communities to identify and address their energy needs and help validate projects before they are sent to SaskPower for consideration.

FNPA has two primary objectives:
1. To provide economic development opportunities in larger-scale power projects; and
2. To ensure lower energy prices for First Nations people and their communities through conservation, energy efficiency, and self-generation options.

They do this by providing expertise and building relationships between interested parties (First Nations community members, SaskPower and other utilities, industry partners, developers, installers, and construction companies).

FNPA also explores renewable and clean energy generation options – such as flare gas – to assist with lowering Saskatchewan’s intense carbon footprint. Many First Nations communities align with this direction as it is closely linked with traditional teachings about respecting Mother Earth.

In establishing FNPA, Saskatchewan is following the lead of Ontario and Alberta:
1. The Aboriginal Energy Partnerships Program supports the participation of First Nations and Metis communities in Ontario’s energy sector by helping to fund community energy planning and renewable energy project development as well as building energy knowledge and skills related to energy projects. Wataynikaneyap Power is a First Nations-led transmission company that intends to connect remote First Nations communities currently serviced by diesel generation.
2. Green Arrow Renewable Energy Corporation in Alberta is owned by Montana First Nation. Its goal is to assist First Nations communities in assessing the feasibility of renewable energy projects on reserve lands.

FNPA Membership 
Established in 2012, FNPA has two types of memberships. It provides annual general memberships to entities wholly owned by First Nations, including economic development corporations, bands, and tribal councils. FNPA assists its general members in establishing a vision, auditing their energy needs, and obtaining financing.

Annual industry memberships are available to all other organizations or corporations interested in working with Aboriginal business interests in the power industry. FNPA can leverage industry members for advice and information on the latest technology while in turn providing developers with a heads-up on SaskPower’s current and future priorities.

How It Works 
FNPA has a 10-year Master Agreement with SaskPower that sets out how the two parties will work together and provides FNPA with access to the crown corporation’s Master Supply Plan. In addition, FNPA meets with SaskPower’s Generation Supply Planning Team and executive management group on a regular basis.

As a result, FNPA is aware of SaskPower’s current objectives and knows when the time is right to submit a particular utility-scale project. For example, developers have been eager to promote solar projects due to their success in Ontario, but SaskPower hasn’t been ready to consider solar projects at this time.

A process is also in place for FNPA to submit unsolicited proposals with various power generation types.

At present FNPA has one gigawatt of power projects in various stages of development. These projects are established in four different ways:
1. SaskPower provides them with a set-aside or project to work on;
2. A developer approaches FNPA with a project and, if it looks promising, they try to match it with a First Nations community;
3. A First Nations community, often with a developer in mind, comes to FNPA with a project and asks for help in making it happen; and
4. FNPA identifies opportunities and looks for First Nations and industry partners.

At the community level, residents and community buildings can take advantage of SaskPower’s Net Metering Program. FNPA is leading two solar power generation projects to install solar PV systems at two schools in northern Saskatchewan – Father Megret Elementary School in Hatchet Lake Denesuline First Nation and Father Gamache Memorial School in Fond du Lac Denesuline First Nation. Both projects are generously funded through multiple funding partners, including Western Economic Diversification Canada, Aboriginal Affairs and Northern Development Canada’s Community Opportunity Readiness Program and ecoENERGY for Aboriginal and Northern Communities Program, and Bullfrog Power.

It is anticipated that the projects will significantly lower the schools’ energy bills. Results will be measured in order to determine how well the solar option works in more northerly communities. “FNPA isn’t specifically mandated to provide green energy, but it makes a lot of sense,” Ian says. “It aligns with First Nations’ beliefs, provides more reliability options, and is an increasingly important source of energy for lowering our carbon footprint.”

Preparing for the Future
FNPA is eager to develop not only utility-scale projects but also community energy projects that will help remote communities and families with limited incomes to reduce their energy costs.

They are working on a sustainable funding model to decrease dependency on government funding through the implementation of successful projects. FNPA hopes to become self-sustaining in the next five years and, once that goal is achieved, will use the revenue from large-scale industrial projects to help fund community energy projects.

A total of 70% of FNPA’s staff are Aboriginal and they are working hard to develop credibility with First Nations community members and their leadership. They recognize that First Nations communities have many competing needs and that economic development is of primary importance. Leading the team at FNPA are CEO, Leah Nelson Guay, and Chair of the Board of the Directors, Tribal Chief Felix Thomas. Both have contributed significantly to the vision, direction, and progression of the organization.

Distributed vs. Centralized Energy
Ian Loughran believes that the trend towards distributed renewable energy will move rapidly over the next decade with the introduction of increasingly powerful storage batteries, both for the residential and commercial sectors (think Tesla Power Wall) and for utility scale power storage (e.g. vanadium flow batteries). District energy projects, solar-co-operatives, and wind farms will allow communities to choose greener options and generate their own power.

Will communities be able to separate themselves completely from the centralized grid? Do they need to? Should they? These questions are still up in the air.

Many experts believe that a centralized grid is essential to ensure stability and reliability. Others foresee the potential of a low-carbon distributed energy sector led by civil society.

First Nations Power Authority has the potential to lead the way in Saskatchewan through its community/developer partnerships and its close relationship to SaskPower. FNPA is also expanding its reach into Alberta, Nunavut, and the Northwest Territories.