ecoEII GC 128296 - Completion Report Glencore RAGLAN Mine Renewable Electricity Smart-Grid Pilot Demonstration ecoENERGY Innovation Initiative Demonstration Component Public Report Project: GC 128296 Glencore RAGLAN Mine Renewable Electricity Smart-Grid Pilot Demonstration TUGLIQ Energy Co. Page 1 of 24 ecoEII GC 128296 - Completion Report Glencore RAGLAN Mine Renewable Electricity Smart-Grid Pilot Demonstration Contents 1 Executive Summary ................................................................................................................. 4 2 Introduction ............................................................................................................................ 5 3 Background ............................................................................................................................. 6 4 Objectives................................................................................................................................ 8 5 Results ................................................................................................................................... 10 5.1 Project Achievements .................................................................................................... 10 5.2 Benefits........................................................................................................................... 19 5.3 Technology Development Objectives ............................................................................ 21 6 Conclusion and Follow-up ..................................................................................................... 21 6.1 Potential for Replication ................................................................................................ 22 6.2 Project Monitoring ......................................................................................................... 23 6.3 Next Steps ...................................................................................................................... 23 TUGLIQ Energy Co. Page 2 of 24 ecoEII GC 128296 - Completion Report Glencore RAGLAN Mine Renewable Electricity Smart-Grid Pilot Demonstration Figures Figure 1 - Layout of Renewable Energy Storage at RAGLAN Mine ................................................. 5 Figure 2 - Map of Main Diesel Consumption Points in North-Eastern Canada .............................. 7 Figure 3 - Energy Storage in Arctic Environment at Mine RAGLAN ................................................ 9 Figure 4 - Electrical Room, Flywheel, and Battery Container ....................................................... 10 Figure 5 - Demonstration Conceptual Diagram ............................................................................ 11 Figure 6 - Smoothing Function of Energy Storage ........................................................................ 12 Figure 7 - Ride-Through Function of Energy Storage .................................................................... 13 Figure 8 - Spinning Reserve Function of Energy Storage .............................................................. 14 Figure 9 - Switchgear and Power Electronics Installation ............................................................ 15 Figure 10 - Predictive Algorithm Output for RAGLAN Operations ............................................... 17 Figure 11 - Arctic Landscape of RAGLAN's Energy Storage .......................................................... 24 TUGLIQ Energy Co. Page 3 of 24 ecoEII GC 128296 - Completion Report Glencore RAGLAN Mine Renewable Electricity Smart-Grid Pilot Demonstration 1 Executive Summary This Project aimed to set a new landmark in renewable energy penetration of diesel autonomous grids, by coupling leading-edge storage technologies and an advanced controller to an Arctic-grade wind turbine, at a Canadian Arctic mine location. The Project was successful in demonstrating a high-impact pathway towards full energy diversification north of the 60th parallel. Overreliance on a single fossil fuel exposes northern mines and communities to significant volatility in energy prices, impacting negatively on investment and employment levels, while presenting higher environmental risks, reducing social acceptance of mining activities, increasing exposure to regulatory carbon taxes, and lowering the quality of life of communities. Tragically, overreliance on diesel in the North leaves unexploited one of the best wind resources, available in close proximity to significant industrial activity, in one of the most fragile ecosystems experiencing twice the South’s rate in global warming. The Project installed and operated a wind hydrogen smart grid system at Glencore’s RAGLAN Mine, demonstrating in severe arctic climate conditions that industrial / community scale renewable energy with storage can significantly reduce the cost of energy and the diesel consumption, compared to diesel only or to wind-diesel alternatives. In particular, the Project demonstrated how essential energy storage is towards achieving higher levels of penetration in renewable energy. As of this reporting, we successfully deployed and operated the wind turbine, achieving 97.3% availability during the inaugural period, displacing 3.4 million liters of diesel and 9,110 tons of GHG Green House Gas (equivalent to removing 2,400 cars from Canadian roads). Each storage technology has been commissioned and activated, with positive control from Hatch’s HµGRID controller. Experimental optimization is taking place to achieve higher than 40% renewables penetration contained to the subset island of Mine 2 and 3, within RAGLAN’s broader micro- grid. Importantly, the System paves the way towards further regional deployments, community energy, mining transport electrification, and lowered underground emissions at the flagship RAGLAN site. The Project’s financials will aptly sustain operations for the next 5 years at RAGLAN, but further regional projects remain economically challenged without continued governmental support given that, over the course of this project, nickel price eroded to the lowest level in 12 years, and oil prices plunged from $120 to less than $30 / barrel in the span of 10 months. TUGLIQ Energy Co. Page 4 of 24 ecoEII GC 128296 - Completion Report Glencore RAGLAN Mine Renewable Electricity Smart-Grid Pilot Demonstration 2 Introduction The Project demonstrated, among other elements, how a hybrid system can integrate high- penetration renewable power with fossil fuel generation in such a way as to maintain grid stability (voltage and frequency) in spite of the intermittent nature of wind power. The Project minimized the loss of wind energy due to wind curtailment (blade-feathering, or load shedding, or blade ice formation) incurred in conventional wind-diesel hybrid installations, in order to maintain grid stability and when wind power generation is greater than the load. Importantly, it eliminated the need for wasteful diesel powered spinning reserves running at partial loads, and gainfully captured the waste from wind curtailment occurring during excess wind conditions. The Pilot showed how to meet the above storage requirements and how such a sophisticated system could be delivered in a remote location (Glencore’s RAGLAN Mine: 61.66°N; 73.62°W), and how the system could be seamlessly operated as part of complex mine operations subjected to harsh climate conditions. Figure 1 - Layout of Renewable Energy Storage at RAGLAN Mine During the FEED Front-End Engineering and Design, the site originally selected for deployment (i.e. the port at Deception Bay), was subsequently changed to Mine 2, east of RAGLAN’s main complex (Katinniq), because of Inuit reservations expressed about the Deception Bay location (stroboscopic impact on fishing and wildlife, raptor’s nesting in proximity). Mine 2 proved a TUGLIQ Energy Co. Page 5 of 24 ecoEII GC 128296 - Completion Report Glencore RAGLAN Mine Renewable Electricity Smart-Grid Pilot Demonstration better location to demonstrate autonomous islanded grid operations, as its own 1.6MW diesel genset with 1.4MW average local load matched well to the 3MW wind turbine’s 32% capacity factor and to the 600kW storage systems’ production. All long lead-time items were ordered in December 2013 and January 2014, and were shipped in time to the site. Turbine foundation work started in Spring and Summer 2014, and the foundation was ready for turbine erection in August 2014. Storage plant and electrical collector grid works were completed by September 2015, and complete project start-up was achieved on December 17th, 2015, with the first 16 kWh of hydrogen electricity produced on that day. Collaboration with Glencore’s RAGLAN Mine was excellent, along with multiple strategic partners: Hatch Ltd., BBA Inc., Enercon G.m.b.H., Hydrogenics Corp., KTSI Kinetics Traction Systems Inc., Groupe Ohmega Inc., Gas Metro Renewable Energies, Morneau Construction Inc., NEAS Shipping Co., Katinniq Transport Ltd., and a range of other suppliers and partners involved in this $20M effort. 3 Background To date, virtually all energy (electricity, transport, and heating) needs in the North are met by diesel, and no substantial deployment of renewable energy existed among the North’s largest emitters until recently (Diavik 2012, RAGLAN 2014), in spite of some of the best wind resource available and in spite of oil prices’ volatility in recent years. As a result, Canada continues to consume 1 billion liters of diesel annually north of the 48th parallel1 (60th parallel