The case for Distributed Energy Generation - Newfoundland and Labrador

Publication Date: 
August 6, 2010

I present arguments in  favour of the small-scale, community owned, renewable energy generation in Newfoundland and Labrador.  I identify current bottlenecks in  the development of the distributed energy generation in the province and list necessary conditions that have to be met in order to move forward. Most of the arguments would apply to other provinces in Canada as well.

Dr. Piotr Trela, SCC- Atlantic Region; Atlantic Canada Sustainable Energy Coalition.

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The potential of small-scale distributed energy: wind, small-hydro and wave/tidal, on the island portion of Newfoundland and Labrador is, at least, several times larger than that of the proposed Lower Churchill 3000 MW project, with fewer environmental problems and with more economic and social spin-offs. The best way to develop this potential is a distributed network of locally-owned renewable energy generation. For this to occur, a few things have to come into place:

1. recognition of its potential by the provincial government:  the great potential of the small, distributed wind and small hydro has not been fully recognized and appreciated (not much space given in the provincial  Energy Plan) and is in the danger of being overshadowed by mega-projects like the Lower Churchill Hydro, which can absorb most, or all, of the provincial government's attention and resources;

2. recognition of the multiple benefits to the province: locally-owned small renewable energy generations would help the provincial government to meet its greenhouse emission commitments, strengthen its position as the green energy exporter, re-invigorate struggling rural communities, increase the tax base, reduce money the province currently spends in social support to individuals, make work projects, grants to the municipalities ( since the local renewable energy projects would provide the employment and source of income to the communities), build up the green-job work force and expertise.

The investment in the sustainable local energy generations is also an opportunity to save the $600 million that would cost putting the scrubbers on the bunker-oil  power plant in Holyrood (promised by the province should the Lower Churchill project didn't get a go-ahead by 2009). The wind and other distributed energy sources could easily reduce or entirely replace the need for the power curently generated by the Holyrood power plant, thus removing the need to waste a huge amount of money for an upgrade of the plant that will have to be scrapped in the near future anyway, if we are to meet our provincial emission targets.

3.  interest by rural communities – needs to be recognized as a new economic and social opportunity: creating local jobs and countering out-migration, building skills in expertise for the new green economy, providing source of stable income for the rural communities;

4. improving the transmission lines:

  • within the island (you will not get financing for a wind power turbine if you have no way to send the energy to the consumer), and later:

  • between the island and the mainland: we could easily produce more energy on the island than we consume; the connection to the North American grid would increase the economic viability of the NL renewable energy, provide the other jurisdictions with a source of “green energy”; increase the energy security of the province and allow a higher proportion of the wind and other renewable energy in the NL energy mix – smoothing out the peaks and lows in wind energy generation and customer demand;

5. creating an integrated provincial and/or regional energy system in which different forms of energy generation would be used in the way that takes advantage of their individual strengths and minimizes the overall vulnerability of the energy system: e.g.: an easily-mobilized hydro energy on the island and/or from the Lower Churchill hydro would be best used when applied to smooth out the more variable and less flexible wind power (when the wind blows: use the wind, stop the hydro, store the water behind hydro dams; when the wind stops: run the water through the turbines);

6. “Feed-in tariffs” - potential green energy investors would not get a bank loan if they cannot show the bank that you can sell the product. Feed-in Tariffs are a way to do it. Following the example of Ontario – implement a system of Feed-in Tariffs in which the provincial power generations agrees to buy energy generated by local producers (individuals, communities) at the predetermined rates. The prices will be guaranteed for a long-term period. Without this, securing private funding for the capital investment from would be practically impossible. Furthermore, by setting different feed-in tariffs for different sources of renewable energy, the province gets the ability to promote these forms of energy that are least damaging to the environment and have most economic and social spin-offs (e.g. job creation in rural NL, income for struggling rural communities, diversification of local economies);

7. Initial investment capital: banks may be reluctant to deal with small customers and financially-struggling communities – so the low-interest loans and/or loan guarantees by the provincial government to the community-owned renewable energy generation may be needed to secure the high initial capital investment (unlike the fossil fuel power plants, in which fuel continues to be a big part of the costs throughout the lifetime of the plant and is being paid by the current cash-flow, the renewable energy projects have a vast majority of the costs borne up-front, before a single megawatt-hour is sold to the grid).

If we are serious about reducing our greenhouse gas emissions, about saving of our dying rural communities, about stopping the outflow of our best resource, our people, out of this province, and about creating new green economy - we have to start moving in the direction of the community-owned distributed energy generation and do it now.

Dr. Piotr Trela, SCC- Atlantic Region; Atlantic Canada Sustainable Energy Coalition.

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