Regional transmission system would benefit green power projects
Energy is everybody’s business these days.
Electricity is such an important commodity and the methods of producing it are changing so much that it has opened up a whole new world for entrepreneurs.
Fort Reliance is one such company that has seen an opportunity and is trying to capitalize on it. The Saint John–based parent company for Irving Oil and various Irving Oil companies wants to see the creation of a regional electricity transmission system in Eastern Canada.
Last week it announced it has created a new company, Portage Energy Limited, that will aim to create joint ventures with other public and private stakeholders to complete projects costing in the $1 billion to $2 billion range.
“If we are to improve our energy costs, our environmental footprint, building better, stronger connections is a necessary first step,” says Andy Carson of Fort Reliance. “We have a number of jurisdictions that are essentially energy islands, so we’re talking about building better bridges to connect those energy islands.”
Carson says energy costs will be impacted with a regional system because the system operator will constantly be able to dispatch the lowest cost power available.
It will also be able to choose to use the most environmentally friendly power available.
A regional system could impact renewable energy development in an even more direct way.
One of the challenges for green energy development in New Brunswick going forward will be finding a buyer. With a cheap, guaranteed source of power from Hydro-Quebec, New Brunswick may not be interested or have the need for more expensive wind or tidal power and getting the energy to the New England market is impossible for most small companies. All of the current export capacity on the New Brunswick grid is in use, so potential exporters would have to build their own transmission lines – a prospect that is cost prohibitive for most renewable energy projects.
What Fort Reliance is proposing, says Charles Cirtwill, president and CEO of the Atlantic Institute for Market Studies, is sort of like a toll highway. The company and its partners would build the “highway”, then sell the space to those wanting to export power. Green power producers, in turn, wouldn’t have to foot the bill for the cost of constructing the highway, just the toll for using it.
“All of a sudden a lot of marginal projects suddenly become possible,” Cirtwill says. “From the perspective of these little green guys running around who want to start their one megawatt generator, this is a huge piece of good news.”
Carson says there are wind farms being built all over the region, not to mention a lot of interest in exploring tidal power. But the wind, in particular, doesn’t blow all the time, so the challenge in adding it to the grid is that it must be balanced with power that can be put on to the grid at a moment’s notice to cover the times when no power is being created.
In a regional system, however, whichever wind farm in the region is working most efficiently at any given time could serve the whole region — in other words, they help balance each other, though balancing power would still be needed.
The idea of a regional transmission network has been proposed in the past.
Yves Gagnon, the K.C. Irving chair in sustainable development at Université de Moncton, proposed a project called the Maritime Green Power Pool two years ago.
Carson says they have been looking at the possibility of creating a regional system for the last 18 months.
Fort Reliance’s regional vision includes the four Atlantic provinces and Quebec.
Carson says they are focusing on meeting with stakeholders and figuring out how best to move forward as a region as well as trying to identify what infrastructure is needed to make a regional network feasible. He says the company is interested in finding partners it can work with to build the necessary infrastructure. They estimate the cost of bringing the current network up to speed is somewhere in the realm of $1 billion to $2 billion.
David Coon, executive director of the Conservation Council of New Brunswick, says having some stake in the interconnections makes sense if you want to get into the electricity business.
“I think the Irvings have made no secret of the fact they want to expand their electricity business,” he says. “They already sell electricity from a gas-fired plant and from a hydro-electric dam and they want to do more and would like to get into wind and tidal power. So with that in mind and them thinking about their markets, I think they would like to have some ability to control the capacity, the adequacy of the interconnections, for example, between New Brunswick and Nova Scotia, because the Nova Scotia market I expect will be a significant one because it is so dependent on coal.”
Gordon Weil, an energy consultant with Standard Energy Company in Maine, says the proposal couldn’t have worked without the changes to the memorandum of understanding between Hydro-Quebec and NB Power.
“It would not have worked if the New Brunswick System Operator and transmission disappeared,” he says. “It’s interesting that the Fort Reliance proposal and the maintenance of the independent manager and New Brunswick ownership of its transmission (system) occurred almost at the same time and they dovetail well. They offer a future prospect.”
Unlike Weil, Cirtwill doesn’t believe the sale of NB Power would have or will have any impact on Fort Reliance’s project.
“The Fort Reliance proposal would have worked under the existing arrangement, under the first MOU and under the existing agreement,” he says.