Research Shows Critical Conditions Necessary for Microgrid Investment in Northern Canada

Ottawa, April 26, 2021 — The Conference Board of Canada has released new research outlining the conditions necessary for successful investments in microgrid renewable energy sources in rural, remote, and northern Canada.

The research showed that, with the right conditions in place, microgrid investments have the potential to remove carbon dioxide emissions from the atmosphere, reduce reliance on diesel fuel, and create jobs in up to 106 remote diesel dependent communities, many of which are on Indigenous lands and require their involvement to move projects forward.

The three conditions that were isolated as critical to success include:

“As governments across Canada look to expand the use of renewable energy sources and meet our international climate obligations, microgrids offer a tangible solution,” says Roger Francis, Director, Sustainability, at The Conference Board of Canada. “But communities must be put at the centre of decision-making, each community must determine what is best for them.”

The small size of northern and remote community projects can make it difficult to access capital for the development of microgrids. Increasing utility and regulatory support for independent power production is critical to shaping partnerships with communities. This interest in decentralized energy generation and transmission is creating new opportunities for community-based renewable power.

A publicly capitalized financial institution could accelerate remote microgrid growth. Public-private financing can provide low-cost financing, credit enhancement, and project de-risking, and can streamline the layering of public grants with debt financing.

Governments could encourage microgrid infrastructure investment by consolidating the complexity of today’s grant-funding landscape. Energy transitions are vehicles for community-led planning and development processes that further self-determination and Indigenous reconciliation. 

Moving from diesel dependence to renewable energy is a microgrid opportunity. The study assesses the market opportunity and potential economic and emissions outcomes for a group of 106 communities under two renewable scenarios.

The research findings show that the long-term use (27 years) of wind and solar powered microgrids can have environmental benefits that include avoiding the use of 40 million litres of diesel fuel a year and reducing carbon dioxide emissions by 111,000 tonnes per year.

The scenarios used can also attract more than $1 billion of investment and have the potential to create as many as 5,900 full-time equivalent jobs.