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Staying Power

A Roundtable Talk on Saskatchewan’s Renewable Energy Sector

On January 12, 2021, Paul Huber, publisher, Industry West, moderated a discussion with several industry leaders to talk about the state of renewable energy in Saskatchewan and its challenges and opportunities.

Joining the chat were: Guy Lonechild (CEO, First Nations Power Authority), Chief Cadmus Delorme (Chief, Cowessess First Nation), Albert Derocher (COO, NewNation Developments and Flying Dust First Nation member), Jessica Nixon (CEO, Cowessess Ventures Ltd.), Kirsten Marcia (CEO, DEEP Corp.), Derrick Big Eagle (CEO, Tomahawk Energy Services), Guy Bruce (sustainable energy consultant) and Evan Wilson (senior director, Western Canada, Canadian Renewable Energy Association). Watch the video now on our YouTube Channel.

Who is FNPA?

Launched in 2011, First Nations Power Authority (FNPA) is North America’s only non-profit Indigenous-owned and controlled organization developing power projects with Indigenous communities across Canada.
FNPA works with industry, government, and Indigenous communities to develop power generation projects, with a network of experts and technical advisors that evaluate and implement projects that economically benefit First Nation communities.

Learn more at fnpa.ca.

Scaling Up

Huber begins by asking about the increase in solar, wind and geothermal energy projects in the province and how we can invest and scale their development. Guy Lonechild, CEO at First Nations Power Authority, notes that scaling depends on several factors, one being the development of projects that are the right size to scale. He points to projects at Cowessess First Nation near Regina as a good model. Their 1-MW (MW) wind and battery storage project was innovative at the time and allowed them to move onto a 10 MW solar project. He says that those moves helped provide the foundation for success that the First Nation is enjoying today as an independent power producer (IPP).

“Many First Nations across the province today are not just contemplating those projects, but they’re actually building them to scale up in 10 MW and 5 MW sized chunks,” says Lonechild. “What we’re seeing is a range of scales between five and up to maybe even 40 MWs of development in renewable energy technologies.”

Lonechild notes that successful projects focus on the needs of the community they are serving, as well as advancing renewable energy. He also sees the capital required to get such projects off the ground. He says that twenty MWs is a good size for an initial project, requiring about $40-50 million in capital investment. Using an 80/20 ratio between debt financing and equity, First Nations can develop a project for about $8 million. Plus, Lonechild is seeing projects through the FNPA using a joint venture model with a 51/49 per cent partnership—dropping equity requirements even lower to about $4 million. It is ventures such as these, often funded by agreements with the federal government, that get renewable energy projects off the ground and lead the way for further development.

“We think this is just a natural fit for both what I would term economic reconciliation and ensuring that First Nations are actively participating in the economy in a meaningful way. Renewable energy is a really good fit.”

Guy Lonechild, CEO First Nations Power Authority

“There's certainly risk, and equity being deployed by the First Nations communities to do just that—to get a foothold so that they can develop what we term as meaningful economic participation in these projects.”

Larger projects also face challenges with connecting to the larger grid. “What we're seeing is a significant cost to interconnect some of these renewable energy projects, but, on the whole I think this looks extremely promising, especially if technology advancements help to provide more distributed energy resources available to indigenous communities,” says Lonechild. “We think this is just a natural fit for both what I would term economic reconciliation and ensuring that First Nations are actively participating in the economy in a meaningful way. Renewable energy is a really good fit.”

Seize the Day

Next, Huber directs the conversation toward the overall opportunity for renewable energy in Saskatchewan. Evan Wilson, senior director, Western Canada, Canadian Renewable Energy Association has much to say on the subject. “I think that we’re really entering a moment—and hopefully it’s longer than a moment—of tremendous opportunity in Saskatchewan for the deployment of renewable projects,” says Wilson. He notes the regulatory requirements set out in the Government of Saskatchewan’s Prairie Resilience Plan, where reducing emissions for electricity generation by 40 per cent provides a significant opportunity for the deployment of wind and solar projects. “We’re actually in the midst right now of procurement for 300 MWs of wind currently,” says Wilson. “We’ve just seen competitions in the last several years for solar projects … in the 10 MW size, including two projects that are developed and will be deployed with significant FNPA interest in those.” As well, the competition for wind energy has additional scoring for Indigenous participation.

“I think that we're really entering a moment—and hopefully it's longer than a moment—of tremendous opportunity in Saskatchewan for the deployment of renewable projects.”

Evan Wilson, Canadian Renewable Energy Association

“There are currently many things being learned about the development of partnerships,” says Wilson. “As the province is looking to reduce its overall emissions and to increase the amount of deployment of renewables, there is the opportunity to go into more of these and develop some strong partnerships that are based on trust and learning that comes from the engagements, the partnership and the competitions that have already happened.” Plus, with coming increases to the carbon tax and more incentives for renewables, Wilson sees great promise and exciting opportunities for Saskatchewan.

Joining Forces

The renewable energy sector has also provided First Nations communities in Saskatchewan with economic development opportunities in the space. Cowessess First Nation took on the task several years ago and is building on their successes with larger projects. “We’re just finalizing a submission to a 200 MW project. It’s not an easy task to submit, be confident, and find the capital as well as capacity to do this,” says Delorme. “Ten years ago, applying for a 400 KW to 600 KW project was beyond what a first nation would apply for.” Cowessess realized a lot during the early days, learned from their mistakes, and built upon on their knowledge. They would move onto 1 MW projects and then to 10 MW. Renewable energy projects are also incredibly relevant to Indigenous culture. Delorme points out that being stewards of the land is part of the principles that guide Indigenous life, based in their inherent rights and relationship to the land and animals. Renewable energy also offers opportunities because it is not a finite resource. “It’s an unlimited resource when we’re talking about sunshine, especially in Saskatchewan. It could be -50C and still be sunny. And wind is an unlimited resource.”

“It’s building the capacity. When you come to Cowessess, you are going to see solar panels on our buildings now …. and it's becoming a norm.”

Chief Cadmus Delorme, Cowessess First Nation

Delorme and Jessica Nixon, CEO at Cowessess Ventures Ltd., also recognize the job creation that comes with energy projects—skilled jobs that can benefit generations. Cowessess is working with the First Nation’s high school students with information sessions and training in renewable energy. “We fund students through treaty right to education to go to university, and we're now getting interest shown in engineering and the area of renewable energy,” says Delorme. “It’s building the capacity. When you come to Cowessess, you are going to see solar panels on our buildings now …. and it's becoming a norm.” Renewable energy has allowed for business growth and diversification at Cowessess and contributing to the overall economy. “We’re also making sure that we look after our land for seven generations and [addressing] the truth and reconciliation calls to actions. Number 92 talks about business … we are exercising exactly that in number 92 of the TRC in regard to being a part of the economic opportunities,” says Delorme.

How Much and From Where

Guy Bruce, sustainable energy consultant, frames how much power Saskatchewan uses. “We talk a lot about MWs in terms of the opportunity. For SaskPower, the demand in the province ranges between roughly 2,500 and 3,500 MWs at any given hour of the day. And roughly a third of that comes from coal.”

According to the 2019-20 SaskPower Annual Report, the utility currently has 4,993 MW of total capacity —that’s a lot of watts. However, it’s about more than just generating watts. It’s also about the power system having dependable capacity to ensure that enough power is there when customers need it. Flexible capacity is also becoming more important, as power is generated through many different means. “Wind and solar run on their own weather-dependent schedule,” says Bruce. “As we move away from coal, the right mix of energy sources to provide the power we need is critical.”

With a province demanding nearly 4,000 MW of power during peak usage times, 10 MW projects may seem small. However, they are just the start. “These projects are steppingstones to much bigger goals,” says Bruce. “Smaller projects allow First Nations to get into the market and build up. Plus, it provides time to see what the future holds, what needs are, and what technology is coming. It’s a balancing act between cost and benefits—which include environmental and social.”

Ingredients for Success

According to the 2019-20 SaskPower Annual Report, the utility currently has 4,993 MW of total capacity —that’s a lot of watts. However, it’s about more than just generating watts. It’s also about the power system having dependable capacity to ensure that enough power is there when customers need it. Flexible capacity is also becoming more important, as power is generated through many different means. “Wind and solar run on their own weather-dependent schedule,” says Bruce. “As we move away from coal, the right mix of energy sources to provide the power we need is critical.”
With a province demanding nearly 4,000 MW of power during peak usage times, 10 MW projects may seem small. However, they are just the start. “These projects are steppingstones to much bigger goals,” says Bruce. “Smaller projects allow First Nations to get into the market and build up. Plus, it provides time to see what the future holds, what needs are, and what technology is coming. It’s a balancing act between cost and benefits—which include environmental and social.” The conversation moves onto how energy projects can be lucrative long-term. Partnerships are key to overall success to get projects moving, especially with the capital needed to build the infrastructure for energy production and storage.

“We’ve gone through a couple approaches at Cowessess,” says Nixon. “Dating all the way back to 2010 … we knew we wanted a partner. We called all the big players in the wind sector and said, ‘hey, are you interested in Saskatchewan? Are you interested in Indigenous partnership?” Nixon notes that 10 years ago when Cowessess began their journey, the current climate for renewables or today’s appetite for indigenous development did not exist in the sector. Cowessess was embarking on something new, and they had to really “put it on the table” with a sense of local community in order create an initial partnership. After that, Cowessess would solicit a partner for another 100 MW project that was ultimately unsuccessful. However, that learning experience was valuable for another project that came in 2018. “When the opportunity came about in 2018 to bid into the big wind partnership, [we knew] that you don’t need to accept the first partner that comes to your table,” says Nixon. “It’s really important that you can build a sense of rapport and trust and be able to talk … frankly what’s in it for you.”

Lonechild agrees about the importance of trust among strategic partners. “We often talk about accountability, transparency, and collaboration amongst the team and building and sustaining trust,” says Lonechild. “That’s core to what we believe in at FNPA. If we don’t live by those types of values, then our external partners will not see us as legitimate.” Because FNPA is often the go-between for industry partners and First Nations, trust and flexibility are vital for success, as well as experience at the helm. Lonechild also sees a long-term vision as key. “Power purchase agreements are 20 years and longer. If you see this as a long-term plan, then the economic, social, and other benefits like education and training will flow,” he says. “This is about the long-term view of what we see as a clean energy future and Indigenous roles in doing just that. We know it’s an important role that FNPA has, and we don’t take it for granted.”

“One of the things we always look for when we're dealing with any partners is their community responsibility, their transparency and their accountability.”

Albert Derocher - COO, NewNation Developments and Flying Dust First Nation Member

Albert Derocher, who works in economic development for Flying Dust First Nation near Meadow Lake, agrees with Nixon and Lonechild. “One of the things we always look for when we're dealing with any partners is their community responsibility, their transparency and their accountability,” says Derocher. “When we took a look at the Flare Gas project [a project in development at Kindersley, Weyburn and Estevan with Genalta Power Corporation and Capstone Infrastructure], we really only had two options.” Flying Dust weighed between two options: a large power developer or a smaller one, both from Alberta. After the interview and RFP process, Flying Dust opted for the smaller developer. “We wanted to go with a smaller partner because we didn't want to be a blip on larger corporation’s balance sheet. Right. We wanted to be able to have a say in what and where our company was going.” It took Flying Dust seven months to negotiate because they needed ensure there was fairness and the ability for their company to grow.

“One of the things that I've always said to the people I've worked with, after assisting Muskoday First Nation on their power projects … is that you find the right people that are going to bring some value to the First Nation—it's a 20-year commitment. You want to make sure that you're doing the right thing for your community, and you're doing the right thing for the business.”

The Indian Act also comes into play for projects with First Nations. Delorme notes the role the Act plays when working on economic development. “The Indian Act plays a vital role bringing in the Crown and [works] ultimately on behalf of the crown and the Government of Canada, says Delorme. “There's some extra steps that must be taken. But don't let those steps affect getting to that finish line.” For companies looking at First Nations as partners, organizations need to recognize the need to work with elected leaders and engage with the community. “The relationship is different when working with First Nations. Every First Nation in the territory should at some point be a part of this growth … from there we'll grow together.”

Show Us the Money

Energy projects are not an inexpensive endeavour and attracting investment can pose a challenge. Derocher points to the Flying Dust Flare Gas project’s finances. In the beginning, Flying Dust assumed they were looking at about $80 million in costs. After talking with partners, the price tag dropped to around $58 million—which is still no small potatoes. To get that type of financing, partners are necessary, and especially ones that have worked with capital markets and institutional banks. “We were fortunate enough to find a partner that … had some good partners in the financial sector.” He also notes that smaller projects are harder to finance than large ones. “There are a lot of difficulties with the smaller projects because of the viability of them. It is a lot easier to fund a 10 or 20 MW solar project than 1 MW.”

Derocher also notes how the Indian Act can hamper investment. “The Indian Act was never designed to accommodate the economic aspirations of First Nations. And that is due to, in part the limited access to resources and infrastructure.” He points to the nine First Nations that have First Nations Land Management Acts, which has helped their economic development efforts. “Fortunately, Flying Dust is one of them, so we control our own land and what goes on to our land. Any agreements we need to make with different groups, we can do ourselves,” says Derocher. “The majority of the First Nations in Saskatchewan have to go through Indigenous Services Canada. And that’s where part of the bureaucracy comes in because they have a risk aversion to the Crown.” This risk aversion makes it difficult for First Nations because they must get permission for projects, and Derocher says that the Indian Act has killed many deals before they have a chance to get off the ground.

Building Sustainable Business

Projects need to also have a lens on long-term sustainability for communities to benefit economically and socially. Derrick Big Eagle, CEO at Tomahawk Energy Services, sees culture change as a core issue. “There needs to be a culture change and …. [it] has to be done in the start, even in the elementary schools or in the educational system,” says Big Eagle. “All of these great projects … [have] gotten the eyes and the ears of people … and they’re wanting to see whether they are ready to make that step or not.”

Plus, Big Eagle notes that the building of projects is not the long-term job and wealth creator—it is the opportunities spun off project completion. “I think where …. the economic advancement is not from putting these projects up,” he says. “The long-term job creation comes with … the future of it. It is the money that is made from these projects. If that money made is direct[ed] into different jobs and into different areas … that’s where we see the real investment.” Big Eagle sees using the earned revenue from projects to generate more capital for long-term benefit. “If we can get it into the educational system and get more of this promoted to the people …. I think we’re going to have a way better chance at further getting investment dollars for these projects.”

“The long-term job creation comes with … the future of it. It is the money that is made from these projects. If that money made is direct[ed] into different jobs and into different areas … that's where we see the real investment.”

Derrick Big Eagle - CEO, Tomahawk Energy Services

Lonechild echoes Big Eagle’s sentiments. He also points to a project in southeast that Big Eagle is involved in. Tomahawk Energy is building an indoor agriculture facility in the city of Estevan that is using generated energy to grow food locally, and in turn, address food security issues. This spinoff from the energy sector is creating long-term jobs and wealth. “One way to add value to the province as a whole is to diversify the economy,” says Lonechild. “The power sector just has a fantastic opportunity to do just that is to ensure that the lower costs of developing market gardens, greenhouses or other types of agricultural development in the province for the long-term.” He sees a bright future for these opportunities, developing renewable energy projects helps to create a new green infrastructure for the long-term—bringing job opportunities with it.

Catching Heat

The conversation turns to the project everyone is talking about—Deep Earth Energy Production’s (DEEP) geothermal project in the southeast part of the province. In December, DEEP completed the first 90-degree horizontal well for geothermal energy production. DEEP CEO Kirsten Marcia leads the team and sees the importance the project plays in Saskatchewan’s renewable energy sector. The company has learned a lot since they began their journey ten years ago—and one of the lessons is patience.

“I think it’s important that we walk before we run,” says Marcia. “DEEP has made some great accomplishments. We are de-risking this resource … things are moving ahead, but this project is still in its infancy. [It’s] walk, run, and then sprint.” Marcia says DEEP is in the “walk” phase, with about six more months of engineering work to complete so that the first 20 MW field will be a decades-long success. The “sprint” comes later, with the larger build out to a 100 MW opportunity along the U.S. border. She notes that geothermal energy also offers power generation side that has baseload capacity. “It’s the only renewable energy source that runs 24 hours a day, seven days a week,” says Marcia.

“I think it's important that we walk before we run. DEEP has made some great accomplishments. We are de-risking this resource … things are moving ahead, but this project is still in its infancy. [It’s] walk, run, and then sprint.”

Kirsten Marcia - CEO, DEEP Corp

Geothermal also offers spinoff opportunities for economic development. In line with Tomahawk Energy’s greenhouse project, DEEP’s geothermal field has potential for the agriculture sector. Marcia explains that after heat is harvested from the geothermal brine (a piping-hot 120 C), the brine is now considered “cold” at 65 C. “65 degrees Celsius is still pretty hot. I think there's some pretty unique opportunities to take a little bit more of that heat out,” says Marcia. She sees the possibility of taking out more heat and redeploying it to address food security in projects like Big Eagle’s. “If we take just an extra 20 degrees out, we could heat a greenhouse one square kilometer in size using just average insulation. That is significant. That's where the long-term economic potential for this project can be.”

Working Together

Marcia also sees how First Nations can play a role in the development of geothermal energy in the province. Marcia sees plenty of future growth in training and employment, especially as the industry grows. “Geothermal is new and like [with] anything new there’s still a lot of learning along the way,” she says. “Right now, we’re doing the learning. We’re not in a position yet to do much training … but that that’s going to change.” She also sees equity participation as vital while ensuring that if a community invests that they know the risks and rewards. While not every community has the capacity to be able to participate in an equity basis, those that can access capital can invest for growth. She sees projects as avenues to generate pools of money where communities can then invest in things like education, health care and recreation. “It’s finding that community that’s appropriate,” she says. “It has to be fair. It’s about finding that partner with that same vision that wants to have that equal relationship where we’re all taking on a bit of risk, but we’re all working really hard to see that that when at the end, it’s a long-term relationship.”

Guy Bruce also weighs on how First Nations can play a role in geothermal energy and the energy sector as a whole. “The one thing that I’ve learned is … economic development, especially for First Nations, is [that] it’s not just about … people having a job, working in a plant,” he says. “It’s about having an ownership stake.”

Future So Bright

As the renewable energy sector establishes itself in Saskatchewan, Huber asks what comes next. Nixon looks at the question as an independent power producer. “Looking at Saskatchewan, we have one of the country’s best wind and solar regimes bar none,” she says. “The future sustainability … is going to be dependent on maximizing our penetration into the solar and wind markets. One of the things that I think is really quite important is the political landscape and the leadership within the province that incentivizes the sector.”

“Looking at Saskatchewan, we have one of the country's best wind and solar regimes bar none. The future sustainability … is going to be dependent on maximizing our penetration into the solar and wind markets."

Jessica Nixon, CEO, Cowessess Ventures Ltd.

She also notes the importance of energy storage and battery technology. “We haven't really put a really good plan forward for … the battery technology component of this. As we look at markets in the U.S. and the transformation to electric vehicles, lithium-ion battery technology has come so far. I am really interested to see some sort of innovative piece around that. To get to the targets that the province has set out on emission targets, we need to do something different than what we're already doing.”

Like Nixon, Wilson sees the value in battery storage technology. “I know that SaskPower had an RFI (Request for Information) earlier in 2020 to determine what a battery energy storage system would look like,” he says. “There is going to be some really exciting opportunities …. in the near future.”

Lessons Learned

Marcia sees that Canadians are recognizing the value of Indigenous partnerships for economic growth. “I think we’re [that] seeing more than ever,” she says, “I think Canadians are recognizing not just the want, but the obligation and the need to have First Nations partnership as equity partners in these projects to see those long-term wins …. Especially [in] infrastructure projects.”

Lonechild agrees with Marcia’s thoughts on walking before running and running before sprinting. He also sees that First Nations culture plays a part in that view. “It’s about patience, perseverance and ‘walk before you run’. And certainly, you run before you sprint. First Nations have an inherent ability to be able to do just that and persevere. In this day and age, we take the long view, and we do what’s best for future generations.”

Renewable Growth for Generations

Lonechild sees the shift away from investing in fossil fuels and money moving into renewable and clean energy projects. “Some of the largest pension plans in all of Canada are investing and reinvesting in energy infrastructure,” says Lonechild. “For every million dollars that is spent in investment, a significant amount of jobs and spinoff opportunities actually are created. When it comes to any type of electricity projects, power transmission, or power generation projects, there is a significant amount of economic activity that will be generated long into the future. And, if done right, those economic benefits will stay here in the province.”