The Remote Frontier: Exploring beneficial investment opportunities for SMEs in Canada’s emerging remote community market. | Clean Technology | Renewable Energy

The Remote Frontier

Exploring beneficial investment opportunities for SMEs in Canada’s emerging remote community market.

March

2013


a world with an increasing hunger for natural resources, “ In the economic potential of Canada’s remote communities is very much on the minds of Canada’s businesses, governments and community leaders. The Canadian Chamber of Commerce (2011)
The CleanTech Community Gateway (CTCG) is engaging with rural and remote communities across Canada, to assist them in achieving their social, economic, and environmental goals through innovative clean technologies. By empowering remote communities to deploy clean technology projects, CTCG hopes to not only improve their standard of living and increase the opportunities available to them, but also to elevate the profile and expertise of Canada’s cleantech industry. Those enterprises willing to adapt to the unique circumstances and challenges of remote communities will find a market at the gateway to Canada’s resource wealth—one in need of innovative solutions that are sensitive to local context and culture.

CTCG is a neutral, not-for-profit organization comprised of public and private sector partners who are collaborating to develop and deploy clean energy solutions within remote communities. info@ctcg.org | +1.778.866.9433

Acknowledgements
The authors wish to thank all of those who donated their time, ideas, and opinions to the creation of this report. In particular, the following individuals were able to provide valuable insights into the unique context of rural and remote communities and the potential value to Canadian cleantech SMEs. Their assistance is greatly appreciated. Aaron Rodgers Amber Zirnhelt Andrew Moore April Goffic Chris Down Diana Nacer Jako Krushnisky Jeff Ragsdale Jerry Sucharyna Jim Vanderwal John Castle Lori Law Scott Stanners Shannon Mallory Sophie Vallée Urs Thomas District of Tofino City of Campbell River T’Sou-ke Nation Quesnel City Economic Development Corporation Energy Secretariat of Nunavut NRC IRAP Gitxsan Energy Village of Burns Lake Municipality of Lillooet Fraser Basin Council Seymour Arm Community Association NRC IRAP British Columbia Bioenergy Network Yukon Energy Corporation EcoENERGY for Aboriginal and Northern Communities Village of Port Clements

Disclaimer
This document is an independent report prepared by the CleanTech Community Gateway (CTCG). The views and opinions expressed in this report are those of the author(s). The information, statements, statistics and commentary (together the ‘information’) contained in this report have been prepared by CTCG from publicly available material. CTCG does not express an opinion as to the accuracy or completeness of the information provided, the assumptions made by the parties that provided the information, or any conclusions reached by those parties. CTCG has based this report on information received or obtained, on the basis that such information is accurate and, where it is represented to CTCG as such, complete.

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Table of Contents  
Acknowledgements .............................................................................................................. 2   Disclaimer ............................................................................................................................... 2   1   Introduction ...................................................................................................................... 4   1.1   Scope of Report ........................................................................................................ 5   1.2   Who are Canada’s Remote Communities? .......................................................... 6   1.3   Remote Community Energy Demand .................................................................... 8   1.4   Remote Community Power Supply ......................................................................... 8   2   Identifying the Opportunity .......................................................................................... 10   2.1   The Opportunity for RET in Remote Canada ....................................................... 10   2.2   Resource & Technology Specific Opportunities.................................................. 11   2.3   Identifying Entrepreneurial Communities ............................................................. 12   3   Demonstrating Benefit .................................................................................................. 14   3.1   Community Champions ......................................................................................... 14   3.2   Neutral Scientific Evaluation .................................................................................. 16   3.3   Unique Value Proposition ....................................................................................... 17   4   Creating Value............................................................................................................... 19   4.1   Determining Technical & Financial Viability ........................................................ 19   4.2   Establishing Business Structure & Ownership ........................................................ 21   4.3   Developing Strategic Partnerships ........................................................................ 22   5   Conclusion ...................................................................................................................... 24   Appendix A   List of Resources .......................................................................................... 26   Appendix B   Rapid Community Assessment................................................................... 29  

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This belief is substantiated by the fact that many of Canada’s greatest wealth assets are distributed across the country’s vast remote and wild areas. In its 2011 Canadian Clean Technology Industry Report. Canada was once entirely a disparate network of remote communities built. by and large. However. foreign direct investment in Canada’s natural resources sector was approximately $185. critical challenges lie ahead. these communities are largely reliant on diesel power generation. The high cost of electricity in these remote off-grid communities has been identified as a significant deterrent to economic development opportunities for any industry consuming even a moderate amount of electricity. an unreliable and expensive energy source that is a significant contributor to both poor air quality and climate change. and 2.7 billion. The Canadian Chamber of Commerce (2011) ” It is fitting to begin this briefing paper with two reminders: 1. In a global geopolitical landscape dominated by concerns of resource abundance. Analytica suggested that the development of a domestic market for clean technologies is critical to achieving this The Remote Frontier 4 . areas of resource wealth will play an important role in shifting power dynamics and the economic prosperity of nations. Canada’s cleantech industry currently generates $9 billion in revenue annually. More than 90 percent of Canadian business stakeholders believe that remote communities will play an important or very important role in the future of Canada’s economy (General Electric Company 2011). generators of the wealth that will make it possible for us to maintain—even enhance—our standard of living and the incubators of the new technologies and business practices to make us more internationally competitive. These expenditures also add to the cost of living for remote populations.1 Introduction Communities] need to be regarded for what “[Remote many of them are. by private sector interests who recognized the economic potential of the land and its resources. up $10 billion from 2009 and $56.5 billion since 2005 (The Canadian Chamber of Commerce 2011). a paltry sum in comparison to the $60 billion a year industry that Analytica Advisors has indicated as a reasonable goal for the sector (Analytica Advisors 2011). In 2010. many of which struggle with high rates of unemployment and poverty (Komarnicki 2012).

1.” and that “providing opportunities for domestic deployments and referrals [would] make it possible to convert the world’s openness to Canadian clean technology into export sales” (ibid). 1 Perhaps the most authoritative quantitative assessment of remote communities in Canada is the 2011 NRCan report “Status of Remote/Off-Grid Communities in Canada. while the report focuses primarily on the market for renewable energy technologies (RET) in remote communities.1 Scope of Report The following report is intended as a tool to help Canadian cleantech SMEs to better understand the needs and realities of the domestic remote community energy market. housing. The intent was not to provide statistics and data analysis. and waste. global clean energy investment surged to a new record of US $243 billion (Bloomberg New Energy Finance 2011).” It is important to understand that there is no single authoritative entity serving these communities or collecting comprehensive data. In 2010. For Canadian cleantech small to medium size enterprises (SME). Therefore. they suggested that Canada should “foster access to public and private domestic markets by globally competitive SMEs. With diesel-generated electricity costs as much as $1. food. and the benefit that could be derived from integrated technology solutions to address remote needs around energy. Specifically. The report highlights the necessity of more holistic approaches to remote community planning. a compelling business case can be made for renewable energy technology (CTCG 2012). All quantitative descriptions in this and other reports should be used with caution and an awareness of their potential shortcomings.goal. the path to this global market could begin by addressing the country’s own emerging cleantech needs. water. The insights and conversations described in the report are admittedly anecdotal and qualitative1. the lessons are broadly applicable to other clean technology industries interested in collaboration. In particular. heat.75/kWh in remote communities. the report aims to help Canadian SMEs to better assess the fit of this market with their commercialization strategies. and to assist them in better marketing their technologies and services to this unique demographic. but rather to describe the on-the-ground needs and insights that may sometimes be missed in quantitative assessments. The Remote Frontier 5 .

1.281 people (see Table 1). Inuit or Métis) with approximately 126. resulting in a stable overall population (Natural Resources Canada 2011). villages or cities as well as long-term commercial outposts and camps for mining.000 people.700). and 2.2 Who are Canada’s Remote Communities? communities] include Aboriginal and non-Aboriginal “ [Remote settlements. Figure 1.180). A permanent or long-term (5 years or more) settlement with at least 10 dwellings. Recently. fishing and forestry activities…170 sites are identified as Aboriginal communities (First Nations. Innu. villages or commercial outposts that are predominately non-Aboriginals or under non-Aboriginal governments. Over the past twenty-five years.1 shows the locations of Canada’s remote communities.420 people living in them. ” The Remote Frontier 6 . the number of remote Canadian communities has decreased from 380 to 292. the populations of existing communities have increased marginally. The communities of Yellowknife (18. Whitehorse (22. it is important to note that estimates include three large communities of more than 10. However. Green dots show Aboriginal communities while yellow dots show non-Aboriginal sites (ibid). primarily as a result of grid extension and abandonment of communities due to relocation to larger villages or cities. This 2011 report used the term “off-grid community” and “remote community” interchangeably to describe any Canadian community meeting the following two criteria: 1.900) and Magdalene Islands (13. Not currently connected to the North-American electrical grid nor to the piped natural gas network.861 people…122 communities are cities. When reviewing the energy supply and demand characteristics of remote communities. with approximately 67. the accepted definition has come to be associated with a Natural Resources Canada (NRCan) report on the status of remote communities in Canada. Natural Resources Canada (2011) Traditionally “remote communities” was used as a catchall term with various meanings depending on context. while the number of total communities has decreased. The NRCan report identified 292 Canadian remote communities with a total population of approximately 194. represent about 28% of all people living in remote communities (Natural Resources Canada 2011).

The Remote Frontier 7 . Their populations range from 10 permanent residents to more than 20.000 MWh (Natural Resources Canada 2011). remote communities are as varied in their energy requirements as they are in their geographies and cultures.453 29.342 14.236 7. One element that unites these communities is the importance of energy generation.910 5.950 22.000.619 16. their energy demand varies dramatically between communities.840 336 41.281 126. and accordingly.063 2.160 903 57 57 0 21.068 7.634 3.449 533 0 533 3.277 8.106 34.Table 1 Remote Communities in Canada & Population Province or Territory British Columbia Aboriginal Non-Aboriginal Alberta Aboriginal Non-Aboriginal Manitoba Aboriginal Non-Aboriginal Saskatchewan Aboriginal Non-Aboriginal Ontario Aboriginal Non-Aboriginal Quebec Aboriginal Non-Aboriginal Newfoundland & Labrador Aboriginal Non-Aboriginal Yukon Aboriginal Non-Aboriginal Northwest Territories Aboriginal Non-Aboriginal Nunavut Aboriginal Non-Aboriginal Grand Total Aboriginal Non-Aboriginal Type # Sites 86 25 61 2 0 2 7 4 3 1 1 0 38 25 13 44 19 25 28 16 12 22 21 1 38 33 5 26 26 0 292 170 122 Population 24. and others upwards of 270.540 29. and the high price of maintaining a reliable power supply.729 15.453 0 194.276 30.452 19. They extend from over 20 degrees of latitude and 90 degrees of longitude.861 67.420 As would be expected.176 29. and from mountains to plains.410 19. from arctic to coast. Some smaller communities require little more than 70 MWh annually.

and. Given the differing rates and levels of subsidies from electric utilities.32/kWh— approximately two to three times that paid by on-grid customers (ibid). to independent service providers. 1. Thus. high energy The Remote Frontier 8 .3 Remote Community Energy Demand As previously noted. to Aboriginal bands themselves. in some cases. regional governments. it can be challenging to identify the real cost of electricity or energy service.477.Figure 1. Residential retail energy rates in remote communities are generally subsidized to varying degrees. yet despite subsidization.4 Remote Community Power Supply Remote community power plants are operated by a number of bodies across the country. to regional governmental organisations.1 Remote communities and 65 kV grid lines and above. ranging from approximately 70 MWh annually to in excess of 270. ranging from provincial or territorial utilities. while total energy demand in Canada’s remote communities is significant—1. most of these communities are characterised by a high degree of dependence on imported fuel. the ultimate price for electricity paid by consumers is on average $0.415 MWh yearly—there is considerable variability between remote communities. 1. and Aboriginal Affairs and Northern Development Canada (AANDC). The vast majority of remote communities across Canada rely on diesel generation for the production of electricity.000 MWh (Natural Resources Canada 2011).

The Remote Frontier 9 . NWT and the Yukon as the only areas using hydroelectricity on a large scale to provide electricity to a number of remote communities. a total of 251 communities have their own fossil fuel power plants totalling approximately 453 MW. 176 are diesel fuelled. relatively little has been done to integrate local resources into the energy mix of these communities. Of the communities with reported data. Many of these systems are typified by aging infrastructure in critical need of upgrades and replacement. and higher than average per capita greenhouse gas emissions (Natural Resources Canada 2011). most remote communities have access to abundant renewable energy resources. BC demonstrated a small number of communities relying on hydroelectricity on an individual basis. Of these. The NRCan report identified Quebec. yet.costs. wind and biomass projects in remote communities. To date. two are natural gas powered and 73 are from unknown sources but most Figure 1.2 Elhlateese generator and battery bank likely diesel power plants or Source: BC Hydro gasoline gensets (Natural Resources Canada 2011). The report highlighted a noticeable dearth of successful solar.

Their citizens will also enjoy cleaner air.N. alternative energy sources can present a persuasive business case in remote communities.1 The Opportunity for RET in Remote Canada The International Renewable Energy Agency has noted that the global deployment of renewables has historically been hampered by high up-front capital costs. greater market competitiveness. ” 2. However.2 Identifying the Opportunity that move quickly down a clean energy pathway will “Countries be the economic powerhouses of the 21st century. The future policy landscape and competing fossil fuel prices will invariably impact the desirability of renewable energy technologies in Canada. Many branches of Canadian federal. Ban Ki Moon. and AANDC. is dependent on a number of shifting political and market influences. and enhanced security. Secretary General The market for renewable energy technologies in remote communities. these The Remote Frontier 10 . the expectation that these costs will likely continue to increase. This trend is changing and in remote communities renewable energy technologies have now become the most economic option for off-grid electrification (IRENA 2012). U.1 Fuel Storage Tanks in Iqaluit Resources Canada. (Indian and Northern Affairs Canada 2010) through the EcoENERGY program. To this end. and the desire to develop local green economies. have all indicated a commitment to strengthening the capacity of Canada’s remote communities through a focus on renewable energy. provincial and territorial governments are providing grantbased support and loan programs that can be used to help fund renewable energy projects in rural and remote Photo by Daniel Van Vilet communities. Groups like the Canadian Chamber of Commerce. just as in urban communities. Canadian remote communities have the potential to become showcases for Canadian clean technologies and facilitate their export to fast-growing international markets. Natural Figure 2. Increasingly. given the high costs of supplying power. better health. Sustainable Development Technology Canada.

and ocean waves and tides.government agencies accept that not only are there significant cost savings achievable through the adoption of renewable energy. Canadian Wind Atlas: http://www. 2 Provincial and territorial governments also provide tools to assess the resource potential within their boundaries.ca http://www. NRCan suggests that there are four main renewable energy alternatives to diesel generation in off-grid communities that could generate substantial economic development benefits: small hydro. opportunities may exist for partnerships to develop small-scale pilot and demonstration projects in remote communities.ca/MapTools/BCEnergymaptool. wind. but that the retention of such savings in the communities could lead to job creation. which plots data provided from a host of public departments.do?id=1226509218872&lang=eng. and solar energy (Natural Resources Canada 2011).gc. biomass. run-of-river.gov. 2. although issues around financing the preliminary investigation stages. Photovoltaic potential and solar resource maps of Canada: http://pv. and the capacity to undertake the work remained a roadblock.ruralbc. most remote communities in Canada have access to natural resources capable of contributing to their local energy mix.html 3 The Remote Frontier 11 .nrcan. Interest among community stakeholders in particular resources and technologies tends to vary by community. dependent on their perceptions of resource availability. Some communities expressed a preference for those technologies that they believed would create the most jobs in the community. local skills development and increased community self reliance.ca/.agr. An illustrative example is the BC Clean Energy Map3. In the case of emerging. although their job creation estimates for particular technologies at times seemed to be overestimated. 2The Biomass Inventory Mapping and Analysis Tool (BIMAT) http://www4. many communities express an understanding that they likely have renewable energy resources available to them.gc. Conversations with various levels of government indicate that projects of these types will be more common in the future. and will likely roll out with greater government participation. municipal solid waste. and give useful insights into where resource potential exists. Solar and Biomass resources. Such maps are available for Wind. pre-commercial technologies.ca/AAFCAAC/display-afficher.windatlas. Cleantech firms interested in identifying areas most relevant to their technologies can access a number of publically available sources.bc. Interactive resource inventory maps are provided by various federal government departments.2 Resource & Technology Specific Opportunities While variable by location. and includes resource opportunities including wind. Generally speaking.

et al. In conversations with several cleantech stakeholders. remote communities will demonstrate an aversion to their adoption. given the risks associated with newer renewable energy technologies. 2012). Canada demonstrates a comparative inexperience with many RETs.3 Identifying Entrepreneurial Communities Few remote communities in Canada rely on alternatives to “tried-and-true diesel powered generators” (Natural Resources Canada 2011).Figure 2. Communities—like people and businesses—are diverse in their willingness to incur risk. However. the sentiment that remote communities should not be “guinea pigs” for innovation was frequently expressed. While one smaller community expressed very little interest in participating at any level in the provision of its energy The Remote Frontier 12 .2 Example of a map showing distribution of geothermal potential in Canada based on end use (Grasby. Despite a relatively mature market for renewable energy technologies throughout much of Europe and the United States. conversations with remote community stakeholders substantiated a diversity of opinions about innovation and risk. There is a common belief that. 2.

list of successful projects and best practices5.aadncaandc. rather than eliminating it.C. Several participants also noted that the ancillary benefit of working with an EDC could be that. Table 2 indicates three examples of funding sources relevant to remote Canadian communities. Another approach to identify entrepreneurial communities could be to seek out those communities who have already demonstrated an interest in clean energy planning and deployment.gc. Public agencies offering funding support in favour of renewable energy will often make successful applications publically known. several other communities expressed a desire to look outside the status quo for potential benefits to their community. In particular. many remote First Nations groups have been proactive champions of creating opportunities for local capacity building and economic development through formalized corporate structures. These applications may also provide insight into where community interests lie and how much progress has already been made (i. These communities demonstrated a keen interest in managing risk. given their arms length from local government. This can prevent disruptions to the project during future community election cycles.gc.ca/EAED/ICEFund/Pages/ApprovedProjects.gc.ca/eng/1334855478224/1334856305920 http://www.aadnc-aandc.ca/eng/1312222759090/1312222864232 http://www.bc.services (renewable or otherwise).aspx 6 The Remote Frontier 13 . One potential characteristic of an entrepreneurial community could be the presence of an economic development corporation (EDC). The ICE Fund encourages the development of new sources of clean energy and technologies to help support local economies in communities across B. planning versus deployment stage. The presence of an EDC also points to the existence of organized decision-making structures and a familiarity with business planning. The FNCEBF aims to promote increased First Nation participation in clean energy.empr. Information Available Previous recipients4. Approved list of rural and remote ICE projects6 Previous recipients and projects7 4 5 http://www. and the information available. SMEs interested in partnering to deploy clean energy solutions should aim to identify those communities with an entrepreneurial spirit and a willingness to explore innovative collaborations.gov. the EDC remain somewhat insulated from changes to the community’s political leadership.ca/eng/1312212959922/1312213056686 and http://www. Thus. Table 2 Relevant Funding Sources & Information Available Funding Source ecoENERGY for Aboriginal and Northern Communities Program BC Innovative Clean Energy (ICE) Fund First Nation Clean Energy Business Fund Description Focused exclusively on providing funding support to Aboriginal and northern communities for clean energy projects.aadnc-aandc.) Many of these funding agencies also publish lessons learned and best practices from previous funding rounds.e.

Thibault and Beckstead 2012). the presence of community champions with the capacity to lead the preliminary organizational aspects of the project. 3.news. by participating in demonstration projects and small-scale trials. For the cleantech SME this will entail: identifying a project champion who is trusted within the community. Conversations with remote community stakeholders indicate that these community champions can come from local leadership (one community described a past mayor with a passion for innovative business opportunities). local saw mills have been champions of successful bioenergy projects).gov.htm & http://www2.Many of the communities spoken with expressed an understanding that in some cases their unique needs will necessitate innovative solutions. Therefore. 7 http://www2. and provide insight into community decisionmaking structures and priorities. universities.ca/news_releases_2009-2013/2012ARR0029-001796. communities often lack the staff time needed to devote to early stage project development (Gibson.” partnerships with technology suppliers. some participants expressed a belief that the potential existed to incorporate innovation into the long-term energy planning and economic development of the community.bc. 3 Demonstrating Benefit as important as clean energy. Rather than equating this position to that of “guinea pigs.gov. ” T'Sou-ke First Nation. 2010 Demonstrating benefit to community stakeholders will require an understanding of their unique characteristics and priorities.bc. is the “Just need to integrate this technology with our own sustainable culture—language. and funding agencies can mitigate the technical and financial risk to communities. and demonstrating a unique value proposition.htm The Remote Frontier 14 .ca/news_releases_2009-2013/2012ARR0021-001010. and training. art. will facilitate project momentum. community members (a First Nation group benefited from the herculean efforts of a community member to secure funding and manage projects). As noted in a recent Pembina report.news. encouraging a neutral and scientific approach to community energy planning.1 Community Champions Time and again. Further. the presence of community champions has been identified as a critical factor to the success of all stages of clean energy projects. and the economic development corporation or local businesses (in some communities. values and traditions. new jobs.

The author estimates that only 30 percent of the rural and remote community stakeholders who were contacted by email or phone ultimately responded. or were engaged with. and volunteer hours (Gibson. The return on this investment is that the knowledge gained from local communities can help projects proceed more quickly and inexpensively. Community champions can also assist in improving the early-stage economics of projects by leveraging government grants. The Elected Chief in Council. hence the onus is on the SME to consider the importance of community consultation and oral communications. the forums listed included: • • • • • The Economic Development Corporation. Thibault and Beckstead 2012). SMEs should be sure to explain how initial engagement is expected to relate to long-term relationship building. SMEs can smooth the road for successful projects in remote communities by taking the time and making the effort to do more than what is legally required to consult with and engage local communities when planning. During early conversations. existing public resources. The Chief Administrative Officer and Mayoral Office. reliable email addresses. or employees tasked with responding to inquiries. To name a few. while accessing the potential of a local workforce (2011). Unfortunately there is no roadmap on how an SME should initially approach communities or community champions. Project participants indicated a number of potential forums for engagement on clean energy issues that varied by community. Engagement and collaboration with community champions should be viewed as a long-term investment in the project.Demonstrating benefit to the community is contingent on understanding the local cultures and norms. The authors believe that it is noteworthy that in attempting to contact rural and remote community stakeholders for this project. Consistently demonstrating deference for local values will go a long way towards earning the trust of the community. Those communities with more established infrastructure and communication channels will likely be more appealing to SMEs interested in pursuing potential projects. constructing and operating projects. it became apparent how difficult this task would be for cleantech SMEs. and The Regional District. and factor this into their planning (The Canadian Chamber of Commerce 2011). BC Hydro. Unlike larger municipalities. As the Canadian Chamber of Commerce has noted. many remote communities do not have websites. The Remote Frontier 15 .

It is intended as a good-faith gesture to the community to demonstrate their commitment to the partnership. learning opportunities) and negative effects (e. resources and demand profile prior to any project beginning in earnest. CTCG advocates for a preliminary assessment of the community’s features. and 2. who it is implemented by. transparency and science-based methods should be adopted to ensure the mutual desirability and applicability of the partnership.g. but should be designed to ensure that the broad spectrum of community needs and resources are considered (an example is provided in Appendix B). jobs. These evaluations need not be lengthy or costly.g. The benefits of a neutral and science-based approach to community energy planning can be seen as both strategic and financial.2 Neutral Scientific Evaluation “ While community opposition to renewable energy is sometimes explained as a Not-In-My-Backyard (NIMBY) reaction to technologies that are widely considered beneficial at a societal level. Beckstead (2012) ” The long-term success of business partnerships is predicated upon an alignment between partner goals and expectations. Thibault.3.. In addition to meaningful engagement. Their interest in the evaluation is twofold: 1. income. or non-profit organisations. and how the positive effects (e. Gibson. community’s desired ownership models or utility’s definition of ‘proven technologies’) The Remote Frontier 16 . Conversations with large established cleantech firms have indicated that often the firm itself will cover the costs of such an evaluation. lack of community acceptance can be also be based on community members’ concerns with how the project is implemented. noise. • Strategic o Initiates and promotes engagement with the community o Resource inventory identifies most viable options o Neutral evaluator adds credibility to the process o Provides an early opportunity to outline stakeholder financial and technical requirements (e.. disruption of views) of the project are distributed. Given the value of such an assessment to the community it may be possible to secure financial or technical assistance from funding agencies.g. The ancillary benefit is that funders will reward project developers with a demonstrated commitment to long-term planning and due diligence. utilities. The assessment collects and confirms the information required to validate their business case for the project and allows for preliminary design considerations to be accounted for.

but will not trump more pressing concerns like cost and reliability. and culture. Learning to communicate complex scientific and technical concepts in simple and engaging language is a talent that SMEs will need to quickly adapt to. conversations with large multi-national clean technology suppliers indicated that their value proposition to communities often emphasizes cost savings and reliability versus diesel. “made in Canada” is appealing.3 Unique Value Proposition Despite recent advances.9 percent of global market share. Canada is not considered a leading global presence in the cleantech industry (Analytica Advisors 2011). Thibault and Beckstead 2012). If SMEs can help to identify useful information or identify opportunities for community mentorship8. that there was too much valuable information to synthesize effectively. and keeps the project moving efficiently. but they can demonstrate value to communities in other meaningful areas. climate. 3. it will serve to enhance their rapport and trust-level with the community. Encouraging a community champion to join the program would better equip them to identify potential roadblocks. Remote communities place a strong emphasis on personal rapport and trust. Community respondents indicated that they saw value in domestic firms who could demonstrate a deep understanding of their local context. The Remote Frontier 17 . Accordingly. Canadian SMEs may not be able to compete with larger foreign firms on cost or experience. The Pembina Institute has found that most aboriginal communities are unaware or only vaguely aware of similar renewable energy projects completed or underway in other aboriginal communities in Canada (Gibson. the Fraser Basin Council in BC offers a community-to-community mentorship program for remote communities. Conversations with remote community stakeholders also indicated the divergent beliefs that access to relevant information was a challenge. Conversations with remote community stakeholders has indicated the general sentiment amongst respondents that all other things being equal. at 0. They 8 As an example. and conversely.• Ensures all stakeholders are working from the same set of assumptions Financial o Financial modeling identifies business case for various projects o Evaluation is aligned to the requirements of future funding applications o Clarifying the community’s resource and demand profile will allow SMEs to verify their business case for the project o Holistic evaluation saves future costs by considering various externalities and potential roadblocks o Time and care must also be taken to present the results of the assessment to the community through a narrative that they can understand and relate to.

to military forward operating bases. Cleantech SMEs should endeavour to demonstrate linkages between renewable energy and the local economy by highlighting the benefits to peripheral sectors and industries. Wind project developers agree to compensate farmers for the use of their land. Natural Resources Canada is also developing an online database that will provide detailed information on the energy profile and infrastructure of each remote community across Canada. this would factor favourably into an evaluation. intelligent grid and waste-to-energy technologies—have potentially vast international markets. For example.bc. Finally.ca/icsp The Remote Frontier 18 . there may be opportunities to partner with other cleantech suppliers to create more impactful solutions. if Canadian firms were able to offer enhanced value around technology support and project development. Identifying community priority areas could be as simple as reviewing their Official Community Plan or website. the intent is to create a hub where remote community information can be readily updated and accessible to all (Natural Resources Canada 2011). Given the importance of holistic community planning. Alberta (Bell and Weis 2009). They suggested that a supplier who explained the benefit of their technology through this particular lens. taxes from wind farms provide vast revenue to rural municipalities—nearly 27% of all tax revenue in Pincher Creek. Many rural and remote municipalities rely on Canada’s Gas Tax Funds to help them build and revitalize public infrastructure. A respondent indicated that one of the community’s most pressing concerns was their poor air quality. could be at an advantage over those suppliers who did not.toolkit. to resource extraction operations in remote locations. adding a “second cash crop” to farmers’ revenue streams. In Alberta’s wind power industry. from the bioenergy sector there are new business opportunities for forestry operators in relation to woody biomass (NORDREGIO 2012). Strategic partnerships to develop 9 A description of ICSP can be found here: http://www. SMEs can improve the value proposition of their technology offerings by demonstrating how they can be integrated into local economic development. farmland is one of the most favourable landscapes for wind projects. Canadian SMEs may be able to offer improved value to remote communities by engaging in strategic partnerships. In addition to creating high-skill local jobs. Once launched. from island nations. or providing feedstock collection and processing services. These opportunities can include incremental revenue from heat or wood waste sales. The availability of these funds is contingent on local governments demonstrating that they are applying the Integrated Community Sustainability Planning (ICSP)9 principles to all forms of planning at the local level.also suggested that the innovation level of the technology might be less critical if it was better at addressing their unique challenges. The emerging industry of autonomous community technology solutions—integrated packages that combine renewable energy. Further.

1 Northwest Territories Ice Road (AANDC 2010) Advancing Canada’s economic prosperity through the development of its resource sectors will necessitate critical infrastructure upgrades throughout many of Canada’s remote communities. 4 Creating Value Figure 4. food security. remote communities will require at a minimum: water that is clean and safe. Creating value for communities will also include demonstrating the economic viability of the venture. 4. The Remote Frontier 19 . Other important issues that could impact the scale and nature of the project—for example demand-side management. waste and wastewater treatment—are sometimes not receiving the early attention that they merit. energy that is economical and environmentally-sound. and establishing mutually beneficial ownership and business structures from the onset. Each of these requirements can be linked with various clean technology applications. capacity building needs. details of a long-term business plan. and broadband telecommunications (General Electric Company 2011). affordable housing. and technical evaluations of the energy resource’s magnitude. health care. This is further complicated by the fact that conversations with some remote communities indicated a tendency to overlook or delay important business considerations like their desired level of ownership. supply. and additional requirements around heat. could find much larger audiences globally once they have been demonstrated domestically. and access.innovative applications in remote Canadian communities. To attract investment.1 Determining Technical & Financial Viability There is a general perception in Canada that public finances directed toward remote communities are “subsidies” rather than “investments” (The Canadian Chamber of Commerce 2011). and Canadian SMEs should attempt to position themselves as integral facets of remote community strategic investment plans. transportation links.

SMEs should be prepared to offer assistance and referrals to where the community can find potential funding and business planning support.10 10 The 269 Community Futures offices across Canada are a good place to start for communities requiring business planning assistance (http://www. It may be tempting for communities to focus on the additional environmental or social Figure 4. Remote communities may not have the capacity or resources to lead the initial business planning efforts. Thibault and Beckstead 2012). or they may be limited in their ability to do so by regulations or inadequate smart grid infrastructure” (Gibson. utility companies may not be willing to purchase power from the new or proposed energy project. and the various government bodies that will be involved. Validating business model inputs is also critical to early planning stages and will ultimately lessen the risk of project failure. however as Pembina has recently noted. Nunavut. project developer. and community resulted in wasted time and costs. Thibault and Beckstead 2012).communityfuturescanada.Given that strong business planning. successful projects demonstrate “cost competitiveness or a positive return on investment prior to being able to secure financing and move the project forward” (Gibson. the community.2 District heating system in Iqaluit. It’s important to consider that “even when grid connections are technically present. SMEs should work with communities to ensure that this due diligence is accomplished at the earliest project stages. A well-designed business proposition will confirm the technical and financial requirements of all potential partners including the utility. benefits that can be Source: (Indian and Northern Affairs Canada 2010) demonstrated with renewable energy projects.ca/) The Remote Frontier 20 . Conversations with remote community stakeholders noted at least two examples where a lack of alignment in business expectations between the utility. and a clear path to sustainable operations will attract participants and funding.

and felt that the proposition would be dependent on context. A further subset of communities were unsure.2 Establishing Business Structure & Ownership Conversations with various remote communities indicated no unified perspective on their desired ownership and involvement in energy projects. Co-operative. Gordon Planes looks over an array of photo-voltaic panels on the roof of the Nation’s administrative building. 4. Joint Venture. Sole Proprietor. It is important to The Remote Frontier 21 . 3. and Bulk Purchase Model Figure 4. It is noteworthy that several communities in the early planning stages of projects had still not come to any conclusions about what their desired business involvement in the project would be.3 T’Sou-ke Nation. There are a wide range of business structures and ownership models available to project participants. Renewable Energy Services Company. 7. Depending on the will of the community and its capacity. Thibault and Beckstead 2012): 1. Ownership by a Public Institution.4. training initiatives. While some communities expressed a strong interest in ownership and management. 2. there are eight potential business models that could be used for renewable energy projects in rural or remote communities (Gibson. contracts and legal requirements—and should be first and foremost in the minds of project proponents.turtleisland. Ownership by a Business Corporation. (Source: http://www. 8. each allowing for various levels of involvement and flexibility. 6. required capacity building.org) Each of these business models has potential advantages and disadvantages for participants that must be weighed on a case-by-case basis. 5. Community involvement in a project will impact a number of critical project elements—potential funding. other communities indicated that they would rather the utility completely manage their power supply. Limited Partnership.

while this also likely means that most of the financial rewards are incurred by the corporation “communities can still share in the economic gains.3 Developing Strategic Partnerships For communities. in Alberta. As Pembina have observed from similar case studies. capacity and context of a remote community. the best business and ownership options will be those that add expertise. 4. For SME’s. this model allows the corporation to adopt most of the risk in developing the project. employment opportunities and other forms of engagement. with energy seamlessly drawn from a variety of conventional and renewable sources. towards autonomous. Creative partnerships in remote communities should aim to address the growing demand for autonomous community technology solutions (ACTS). the Municipal District of Pincher Creek receives 27 percent of its revenues from wind farms” (Gibson. A host of interacting forces are currently driving a global transition away from centralized energy generation and delivery. campus environments. Thibault and Beckstead 2012). while simultaneously creating highly marketable innovations for export. Self Healing Networks: automatically detecting and responding to grid problems. selfsustaining systems. With a goal of mitigating risk to the community. and Reliability: Near 100 percent uptime for critical loads. Quality of Supply: Stable power to meet exacting consumer energy requirements. Advanced Power Storage: Energy generated during peak times can be stored for potential future use to ensure minimal wastage and add firmness to intermittent resources. the opportunity exists to develop partnerships around the deployment of innovative solutions to remote community challenges. Subsequently the global demand for such systems reaches across a host of market segments including. social and economic benefit. emerging energy markets in the developing world. build on partners’ strengths. that any of the business models could be designed to work within the culture. • • • • • ACTS and advanced microgrid systems can offer a quality and diversity of services that incumbent utilities have previously been unable to offer to consumers. Even the wholly-owned corporation model could allow for significant community involvement through consultations. and equity to the project. and military stationary bases. capital. Strategic partnerships in remote communities should aspire to offer: • Hybrid Design: accommodating all generation and storage options. and create environmental.remember when demonstrating benefit to the community. The microgrid market is expected to The Remote Frontier 22 . For example. Security: Enabling cyber and physical security.

school. representing revenue of $3. though few deploy renewables. • Typically provides power to a medical clinic. U.follow an adoption trend analogous to exponential growth over the next 5 years (Pike Research 2012). Weak Grid Island Systems •T   ypically largescale microgrids that have linkages to a larger grid.7%. Hardware for connecting to grids.8B by 2017. DOD). Renewable energy project development and financing. Mobile Military Microgrids • Mobile military microgrids are expected to show a robust 2011-2017 CAGR of 49.S.4 identifies the features of the leading remote microgrid market subsegments globally. Figure 4. • Total capacity will still be modest at 20 MW and revenue will reach just over $32M by 2017 (limited to U. but the highest growth rates. Given that North America and especially the United States are expected to represent the best overall market for advanced microgrid applications (ibid). waste. •G   lobally. •E   xpected to achieve 40% CAGR and revenue of $1.S. designed and operated as if the larger grid is not there. by 2017 and revenue of $4. projects deployed in Canadian remote communities are well-positioned to access this export potential. nearly 75% of existing mines are remote operations.2%.4 Leading remote microgrid market subsegments globally (Pike Research 2012) Strategic partnership opportunities that should be explored by SMEs through remote community projects include: • • • • • • Microgrid management software. End user change management programs. Figure 4. The Remote Frontier 23 . and/or community centre • Expected to grow to CAGR of 21. Power system design and modeling. water. and Integration of ancillary community critical infrastructure including food. •E   xpected CAGR of 16.2%. Source: Helen Pidd for the Guardian Source: MeridianEnergy Sam Shepherd - Source: energydigital.com Remote Village Power Systems • The average village power system has a capacity of 10 kW. Industrial Remote Mine Systems •L   east mature market.7B.7B by 2017.com Source: Spencer Ackerman for WIRED. and building technologies.

environmental. deploy. However. The opportunity exists to facilitate Canada’s participation in the competitive global cleantech marketplace by addressing domestic market needs for innovative technologies. Strategic collaborations between SMEs. and commercialize their innovative technology solutions. Canadian SMEs should look to remote communities for opportunities to demonstrate. should play to participants’ strengths to reimagine remote communities as centers of social. and public institutions. as Canada’s resource economy expands. the demand placed on remote communities for reliable services and infrastructure will necessitate rapid investment in these areas. and economic prosperity for Canada. rather than adopting centrally guided policies that arbitrarily spread renewable energy projects across the national landscape (NORDREGIO 2012).5 Conclusion The term “emerging markets” naturally calls to mind the rapidly growing energy and resource management needs of the developing world. remote communities. The Remote Frontier 24 . Policy and investment should focus on identifying those places that have the greatest potential to benefit from renewable energy. Of course the federal government should take the lead in developing a long-term strategy to allow Canada and remote communities to benefit from investment in the resource sectors. but sustained SME investment will ensure that a business lens is applied to these opportunities.

Renewable Energy Systems Business Case Analysis for Remote Communities Project .cgdi. Cañizares. 2009. Ed. Bloomberg New Energy Finance. Komarnicki. 2011. January 11. Skills Development in Remote Rurual Communities in an Era of Fiscal Restraint. "Integrated Community Sustainability Planning-Implications for Rural British Columbia. "Renewable Energy Alternatives for Remote Communities in Northern Ontario. Grasby. "The Business Case for Investing in Canada’s Remote Communities.gc. Claudio A. Centre for Indigenous Environmental Resources . The Remote Frontier 25 .se/oecdrenewableenergy (accessed 2013). 2011. November 2012. "Summary for Policy Makers: Renewable Power Generation Costs . "Towards a Remote Communities Investment Strategy for Canada Shaping Economic Growth in Canada’s Remote Communities. "Sharing Knowledge for a Better Future: Adaptation and Clean Energy Experiences in a Changing Climate . and Tim Weis. "The 2011 Canadian Clean Technology Industry Report." 2011." 2012. and Claire Beckstead ." 2011." NORDREGIO. Sachi. "Total Microgrid Capacity by Segment. et al. Pike Research. Canada." 2010." Market Report. Renewable and Electrical Energy Division. Fraser Basin Council. October 2012.ca/nationalatlas/download/part6/ess_pubs/291/291488/of_ 6914. "Reflections on Success . Bell. 2012. "Geothermal Energy Resource Potential of Canada. Jeff.." 2012. Chess. Natural Resources Canada. and Mehrdad Kazerani.Bibliography Analytica Advisors. Clean energy investment storms to new record in 2010. Indian and Northern Affairs Canada. www. Greening the Grid. Energy Policy Sector.com/PressReleases/view/134 (accessed 2013)." 2007. 2012.nordregio." 2011. Gibson ." Smart Planning for Communities. NORDREGIO. 2012. "DRAFT Community Renewable Energy Projects in Rural and Remote Canada. The Pembina Institute.E.A Sustainable Future in a Changing Climate. Status of Remote/Off-Grid Communities in Canada. https://bnef. CTCG. Natural Resources Canada." GeoGratis .pdf (accessed 2013). Natural Resources Canada. "OECD Renewable Energy . Ben Thibault. IRENA. House of Commons. General Electric Company." IEEE Transactions on Sustainable Energy. 2012. Arriaga . Mariano. The Canadian Chamber of Commerce. http://geogratis. S. 2012. Joan. Industry Canada.

pdf Presents a “state of the nation” summary of Canada’s remote communities. and technology systems for electricity.ca/images/uploads/Reports/2011/The_Business_Case_for_Inve sting_in_Canadas_Remote_Communities0911. and other socioeconomic benefits. a case study review of known renewable energy projects in rural and remote communities in Canada. please contact CTCG if you have any questions. Community Renewable Energy Projects in Rural and Remote Canada . exploration camps. Guide to Best Energy Practices for Remote Facilities Arctic Energy Alliance . Also includes business ownership models specific to rural/remote communities. 3. efficiency. the following documents may be of interest to those interested in remote Canadian communities. and Rural The Ontario Rural Council – 2007 http://ruralontarioinstitute.ca/files/download/99 Specific energy optimization. and traditional camps with up to 50 people on site at one time). while also highlighting the importance of community ownership.ca/file. The Business Case for Investing in Canada’s Remote Communities The Canadian Chamber of Commerce – 2011 http://www. Lastly. 4.2011 http://aea. and vehicle energy use considerations for small to medium sized remote facilities (lodges. 2.nt. Rural Landowners.chamber. heating. The Remote Frontier 26 . and build capacity to tap Canadian natural resources situated near these communities. 1. Exploring Ownership Communities Options for Farmers. As links sometimes change and new materials are constantly being released.Literature Review and Case Study Analysis [Pending publication] The Pembina Institute – April 2012 Success factors for renewable energy development in Canadian remote communities.Appendix A List of Resources In addition to the sources cited in the bibliography and footnotes of this report. particularly grid connection and connectivity.aspx?id=d3c5ae30-a984-4672-8990-be20ff9b0dff Highlights key factors for building renewable energy infrastructure. and introduces how proper investment can spur economic development. water.

Renewable Energy Systems . Communities are split into climate type (i. Suggestions for policies supporting renewable energy development including the reduction of capital costs.pdf Detailed energy considerations in remote areas. Canada IEEE TRANSACTIONS ON SUSTAINABLE ENERGY – November 2012 https://ece. Highlights lessons learned and challenges in several Canadian case studies. 8.ca/~ccanizar/papers/mariano_TSG1. warm). temperate. and community acceptance. Walkthrough of business and labour needs for clean energy project and technology developers. long winters.Business Case Analysis for Remote Communities Clean Technology Community Gateway – March 2012 [Draft available upon request from CTCG] This report analyzes four northern Canadian remote communities for the business case potential of introducing renewable energy technologies to displace diesel The Remote Frontier 27 .e.toolkit. 7. particularly the increasing cost of diesel electricity. 6.do?id=1290792790023&lang=eng Summary of renewable energy policy and challenges in Canadian rural and remote communities. on-going financial support. demographic trends.gc.pdf Contains updated energy output data from Northern Ontario community-based and utility-owned remote communities.ca/News/New-Report-Powering-our-Province Overview of opportunities and barriers for clean energy development in BC. Analyzes insights and opinions from 34 BC IPP projects and 8 different renewable technologies. Powering Communities: An Analysis of the Clean Energy Business and Workforce Opportunities in British Columbia GLOBE Advisors – May 2012 http://www.5.org/wp-content/uploads/2012/06/IEA-RETD-REMOTE. 9.rural.bc. technical assistance.ca/RURAL/display-afficher. and requirements for renewable energy. local capacity. Examination of remote microgrid operation and challenges of integrating renewables—particularly the impacts on existing diesel generators—and a model of wind + battery and solar + battery scenarios. Renewable Energies for Remote Areas and Islands (Remote) IEA – Renewable Energy Technology Development – April 2012 http://iea-retd. Renewable Energy Alternatives for Remote Communities in Northern Ontario. discussion on necessary skills and capacity building. Renewable Energy Policies for Remote and Rural Communities – Energy Policy Assessment (Final Report) Canada’s Rural Partnership (Government of Canada) – August 2009 http://www.uwaterloo. and strategy enabling within rural communities.

10. and energy demand. Status of Remote/Off-Grid Communities in Canada Aboriginal Affairs and Northern Development Canada/Natural Resources Canada – August 2011 [Available upon request from CTCG] Highly comprehensive breakdown of all 292 Canadian remote communities by population. and payback period. The Remote Frontier 28 . and wind/fuel cell. fossil or renewable fuel type used. Systems modeled included biomass. aboriginal/non-aboriginal ownership.power. Financial analysis included net present value. per capita power capacity. internal rate of return. biomass/hydro.

Population/Demographics Primary Community Contacts Basic Decision Making Structures High-Level Skills Inventory Yes/No on likelihood of labour availability Drinking Water Water Waste Water & Sewage Technology The Remote Frontier 29 . Resource Inventory High-level resource inventories outlining the availability and magnitude of local renewable resources. HOMER. Geography Access Current means of access for various products and services. specifications.Appendix B Rapid Community Assessment 1. Micro-hydro Solar Wind Biomass Harvestable & Waste Sources Other Energy Project Modelling e. Electricity Heat Current Supply & Demand Profile Transport Fuels Associated Costs Technology Characteristics Age. pooling talent. Surrounding Area Other communities/populations within [100 km]. May be useful for combining resources. Telecommunications 4. Community Profile Overview of community features and unique considerations. Demand Profile Profile of community energy use and sources. RETScreen 3. expected replacement of various existing systems 2. Logistical Considerations Identification of current or potential access concerns. and expanding market catchments for various products and services.g.

g. forestry. mining) Other Relevant Considerations e.g.Waste Food Infrastructure Waste Streams Disposal/Landfill Waste Diversion Access Local production Costs Demand Industry Identification of any major industrial activity (e. forest fire risk The Remote Frontier 30 .

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