Enoch Cree Nation Community Solar FarmThe Journey Thus Far

Presenters: Chase Morin Enoch Cree Nation, and John Kenney Urban Systems

October 23, 2018

Thank-you

Our Story

Enoch Cree Nation (ECN) has engaged Urban Systems to

complete a Solar Farm Technical Feasibility Study to consider

the options of developing, owning, and operating a large scale

solar farm on reserve lands to advance the Nation’s economic,

environmental, and community development interests.

Big Picture:• Global climate change and international commitments to reduce

emissions

• Revolution of energy generation technologies

• Decentralization of energy markets

Closer to home:

• Alberta Climate Leadership Plan / Federal Plan• Expect an investment greater than $10.5 billion and 7,200 new jobs

• Empowerment of Indigenous leadership in the energy sector

• ECN is working to meaningfully participate in this sector

Getting Started – The Big Picture

• Interest from within Enoch Cree Nation to be a leader in Alberta’s renewable energy sector

• In 2017, ECN completed a “Renewable Energy Options Analysis and Pre-Feasibility Study”

• GOAL: understand what opportunities existed and whether or not they made any sense to invest in

Starting from ground zero

Summary of Options Analysis

Technology Resource Scenarios Considered Findings

WindMarginal • 6 m/s at 80 m

• 6 MW• 60 MW

Likely not viable under the REP

SolarStrong • 1200-1300 kWh/kW

• Small to largeLikely to be viable business case (with grant funding) and need to be “creative”

Biomass

Most promising supply is agricultural and community wastes

• Displacement of community energy use

Likely not viable due to low cost of energy (in particular natural gas)

Geo-exchange N/A• Displacement of

community energy use

Likely not viable due to low cost of energy (in particular natural gas)

KEY FINDING: SOLAR PV APPEARS TO BE THE MOST OPTIMAL

Why Solar at ECN?

• Located in an area with a strong solar resource.

• Ample land and roof space on reserve to host large solar PV projects.

• Solar PV projects can be mobilized & developed relatively quickly to leverage available grant funding programs.

• Solar PV projects have a relatively straightforward regulatory approval process.

About Solar Farms

• Key components:

1. Solar panels (fixed)

2. Electrical infrastructure (inverter/transformer)

3. Switch gear

4. Meter

5. Distribution / transmission

• Site access roads

• Scenario 1:• 1 MW Roof Top Mounted Solar on the RCRC

• Scenario 2:• 5 MW RCRC Roof and Parking Lot

• Scenario 3:• 10 MW Solar Farm at a Nation-Owned Site w/ power sold

to an off-taker

• Scenario 4:• 5 MW Solar Farm at a Nation-Owned Site w/ a direct

connection to the RCRC

2018 Pre-Feasibility Study of 4 Project Scenarios

Outcome of the Pre-Feasibility Study

Advance the development of a solar farm project with an Off-Take Agreement in partnership with the River Cree Resort and

Casino

The Proposal/Recommendation

• 10 megawatt solar farm• Approximately 40,000 panels

• Footprint of approximately 90 acres

• Generate 12,500+ MWh per year• Enough power for approximately 1800 homes

• Approximately $1 million of power generated

• Development cost estimated to be $18.5 million

What does a 10 MW Solar Farm Look Like on the Land?

• Visually changes the landscape

• Noise is minimal • Slight hum during the day

• Approximately 30 decibels @ 300 meters (i.e. whisper)

• No night time noise, as solar farm is not operational

• Minimal opportunity for mixed use

• Last a minimum of 25 years

5 Ingredients to Make a Large Scale Solar Farm Work

1. Site control

2. Interconnection to the power grid

3. Contract to sell the power

4. Permits and authorizations

5. Funding

Ingredient #1 – Site Control

• Identified a number of sites of interest at Enoch

• Significant effort allocated to advancing a partnership with a Certificate of Possession holder, but fell through

• Selected a new site with great attributes!

• Actively working to complete site investigations and advance land lease arrangement

Key Learnings:

No site is perfect, and don’t be surprised if the first site you pick isn’t that one that ends up working.

Ingredient #2 – Interconnection

• Renewable energy projects require interconnection with existing power system infrastructure

• Electrical engineering is complicated and existing utility have rigorous standards

• Preliminary assessments have proven to be positive for the Enoch solar farm

• Enoch is completing a detailed interconnection study to define interconnection requirements and costs

Key learnings:

Interconnection is $$$, the studies take a long time, but critical to a project’s viability

Ingredient #3 – Contract to Sell the Power

Three key options:

• Option 1: Follow the heard and compete in the Renewable Energy Program (REP)• Basic renewable energy economics not favourable to solar

• LCOE - Solar: $110 -150 / MWh vs Wind: $30 - $35 / MWh

• Option 2: “Behind the Fence”• The Alberta Micro-Generation Regulation is great framework but need to have direct

connection• Land constraints

• Option 3: Leverage Alberta’s unique and competitive power market• Sell the energy to ourselves!

Summary of the Alberta Wholesale Power Market

• The market price for electricity is constantly changing, moving up and down

throughout the year, month, week, day and even hourly

• How is the price set?

• The power pool represents the wholesale power market in AB

• Bid process where generators bid to sell power to the market

• This is overseen by the Alberta Electricity System Operator (AESO)

What is an Off-Take Agreement?

• An Off-Take Agreement can stabilize the power price for:

• The generator (i.e. solar farm)

• The customer (i.e. the Casino)

• But how?

• Negotiate a strike price that reflects interests of the generator and customer

• Enter a long-term contract (i.e. 25 year Off-Take Agreement)

Example: How it works in dollars and cents

• Plus RECs valued

at ~$15/MWh

Why an Off-Take For Enoch

Overall benefit to Enoch:

• Casino has a large power load

• Hedge both the solar farm and casino from external market conditions

• Support viability of solar farm and fix a major operational cost of the

casino

• Aim to achieve profitability from RECs sold (e.g. Edmonton)

Ingredient #4 – Permits and Authorizations

• The project we are looking to advance can be considered “straight forward” from a regulatory approval perspective

• Actively working to secure approvals from:• Enoch Land Management Bylaws, Policies and Protocols

• Alberta Utilities Commission

• Environmental regulations (federal and provincial)

Key Learnings

Balancing aggressive project timelines, overall project definition and lead time for regulatory processes is challenging!

Ingredient #5 – Funding

• The good news is, once we’ve got the other ingredients together, Enoch will be well positioned to:

• Raise debt financing from lending institutions both traditional & non-traditional

• Leverage existing federal and provincial programs/grants

Key learnings:

Be proactive and strategically share your story. The money will come.

Identification

Project Definition

Pre-feasibility

Detailed Feasibility/Pre-Design

Approvals

Design/Build

Construction

The Lifecycle of Most Renewable Energy Projects

COD

The Plan for Getting it Built

• Finalize key site investigations

• Interconnection, environmental, noise, geotech, survey, etc.

• Detailed project costing and update business case

• Strike lease agreement and finalize off-take agreement

• Advance project funding/financing

• Submit regulatory applications

• Site plan / design

• Final investment decision

Summary of the Story So Far…

• Understand your options and resources

• Be open to innovative and unique ways to advance projects

• Come up with a clear plan to:

• Secure land

• Proactively advance interconnection work

• Sell the power

• Advance permitting asap

• Attract funding

Thank you!

Backup Slides

Summary of the Alberta Power Pool -Simplified Scenario

• Assume a demand for 350 MWh of power at 7 pm tonight

• 3 companies (A,B, and C) are each able to supply 100 MWh of this demand (baseload), and two (D and E) that can provide 50 MWh of peaking power

• Companies A, B, and C submit their bid price for the first 300 MWh• Company A - $40/MWh • Company B - $50/MWh • Company C - $60/MWh

• Companies D and E submit their bid prices for the peak 50 MWh• Company D - $70/MWh • Company E - $100/MWh

• AESO first selects Companies A, B and C (baseload) then selects Company D (the lowest bid) for the peaking demand

• Company D sets the power price for the entire pool

Business as Usual

The Model We Are Considering