Overcoming Challenges to Secure a Renewable Future a Report to the World Energy Congress
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Overcoming Challenges to Secure a Renewable Future A Report to the World Energy Congress July 2010 Table of Contents EXECUTIVE SUMMARY .......................................................................................................3 INTRODUCTION ...................................................................................................................4 ENERGY PLAN .....................................................................................................................5 WEALTH OF RENEWABLE ENERGY RESOURCES ..............................................................5 CURRENT PRODUCTION ...........................................................................................................5 Future Potential ..............................................................................................................6 Hydroelectricity ...........................................................................................................6 Wind ............................................................................................................................7 Other Renewable Energy Sources .............................................................................7 ENSURING A RENEWABLE FUTURE – OVERCOMING OBSTACLES ..................................8 GEOGRAPHY .........................................................................................................................8 Labrador-Island Transmission Link ...........................................................................8 MARKET ACCESS ..................................................................................................................9 Isolated Non-Connected Communities .......................................................................10 Wind-Hydrogen-Diesel Technology ..........................................................................11 Coastal Labrador Alternative Energy Study ............................................................12 DEVELOPING ADDITIONAL RENEWABLE ENERGY SUPPLIES .............................................................12 Energy Innovation Roadmap ...................................................................................13 CONCLUSION ....................................................................................................................13 SOURCES AND NOTES .....................................................................................................14 2 Executive Summary Newfoundland and Labrador is a windswept Canadian province nestled into the North East corner of the North American continent. While it’s geographic land mass is quite large, almost twice the size of Great Britain in fact, the province’s population is just over 500,000. Comparing that to Great Britain’s population of almost 60 million provides an indication of how sparsely populated the province actually is. Despite its relatively small population scattered over a large, difficult terrain, Newfoundland and Labrador is on the brink of two extraordinary energy achievements: becoming one of the only jurisdictions in the world to eliminate almost all of its thermal generation; and, making a huge contribution of clean, renewable energy to the North American continent. The key to both of these achievements is the development of the Lower Churchill Hydroelectric Project. Its development, along with the associated transmission infrastructure, will ensure that 98 percent of the province’s electricity will be indefinitely generated by clean, renewable hydro power. This, in itself, is a monumental achievement. On a much larger scale, however, the excess hydro power from the Lower Churchill Project can be exported into the North American continent and contribute greatly to a clean, renewable energy future for many jurisdictions. In fact, the power generated from the Lower Churchill Project is enough to power 1.5 million homes and will displace the equivalent GHG emissions of over 3 million automobiles. Yet, the Lower Churchill Project will not be developed without a business case to support it. Building the Lower Churchill Project for domestic use only is not economically viable at this time. The future of the project rests entirely on securing market access for its excess power. In order for the waves of clean energy to flow across North American markets, jurisdictions must be focused on improving regional transmission infrastructure, and committed to the principles of open access. There are also additional challenges that must be overcome for the province to truly realize its renewable energy potential. The province has a number of remote communities that are isolated from the existing electrical grids and rely solely on diesel generation. Through Nalcor Energy, the province’s Energy Corporation, the province is currently undertaking an innovative project that would displace diesel generation with a combination of wind, hydrogen, and diesel. The province is also continuing to examine the potential for additional renewable energy development. This paper will highlight how the province, through its Energy Plan, has set the path forward for the future development of its renewable resources including how it plans to overcome some of these significant challenges ahead. 3 Introduction Newfoundland and Labrador is blessed with an endowment of rich and diverse natural resources. There are few jurisdictions in North America that match the unprecedented resource potential of the province’s oil, gas, hydro, wind and other energy resources, making it a true Energy Warehouse. In terms of non-renewable resources, Newfoundland and Labrador represents a maturing industry. In fact, on a per-capita basis, the province is one of the largest petroleum producers in the world. To date, approximately 3 billion barrels of oil and 10 trillion cubic feet of natural gas have been discovered off the shores of the province and in early 2009, the province produced its billionth barrel of oil; a milestone achieved just 10 years after first oil production. The province’s non-renewable resource potential is even higher, with an estimated 6 billion barrels of oil and 60 trillion cubic feet of natural gas yet to be discovered. Figure 1 However, while oil and gas resources will no doubt form a significant part of the province’s energy mix for the foreseeable future, such non-renewable resources are finite and continued development constitutes their demise. Therefore, the province must ensure that its vast renewable resources are developed in a manner that will not only maximize the benefits of the people of the province, but also ensure indefinite energy security. 4 Energy Plan Figure 2 In 2007, the Government of Newfoundland and Labrador released Focusing our Energy, the province’s first comprehensive Energy Plan. The Plan contained 107 actions and commitments intended to guide the responsible development of the province’s energy resources into the future. One of those commitments was to invest a portion of the province’s non-renewable resource revenues into the development of renewable energy resources such as hydro and wind, as well as the associated infrastructure – a commitment that requires careful and responsible planning. The Energy Plan established a provincial energy corporation, Nalcor Energy, to manage and lead the development of the province’s energy resources. Since that time, the province has been progressing towards fulfilling this commitment. As will be demonstrated in this paper, the province has not only identified the unique challenges associated with achieving its commitment to a renewable future, it has developed innovative solutions to overcome them. Wealth of Renewable Energy Resources As previously described, the province has an abundance of non-renewable energy resources that will continue to be a part of the energy mix for some time. However, the province’s renewable resource potential is arguably even more impressive. Current Production On a per-capita basis, Newfoundland and Labrador is the largest producer of electricity in the world. The province currently has 33 hydroelectric plants generating over 6,700 MW of power, most of which (5,428 MW) comes from the Churchill Falls power station: the largest underground power station in the world and third largest hydro-electric generating station in North America. Beyond hydroelectricity, the province, through Newfoundland and Labrador Hydro, a Nalcor Energy company, has also recently taken the first steps towards developing its wind resources by advancing two 27 MW wind projects. Additionally, the province currently has three wood pellet production facilities in various stages of development and pilot project is underway to assess the viability of making fuel pellets from locally harvested peat resources. However, to meet the commitment to a renewable future, the province needs to tap into its vast undeveloped renewable energy resource potential which, as shown in the chart below, is quite substantial. 5 Potential Opportunity for Renewable Electricity Generation: 2007-2060 Figure 3 Future Potential Hydroelectricity The Lower Churchill Hydroelectric Project is the most attractive undeveloped hydroelectric project in North America. Its two installations at Gull Island and Muskrat Falls will have a combined capacity of over 3,000 MW and can provide 16.7 Terawatt hours of electricity per year, sufficient energy to power over a million homes. In particular, the project could displace over 16 megatonnes of greenhouse gas (GHG) emissions every