NOTE - THE STUDY REFERENCED BELOW REFLECTS CONNECTING 16 COMMUNITIES. A 17th COMMUNITY (PIKANGIKUM FIRST NATION) JOINED THE PROJECT SUBSEQUENT TO THIS STUDY.
PricewaterhouseCoopers (“PwC”) was engaged by Wataynikaneyap to assess the financial feasibility of connecting 16 of Wataynikaneyap's member communities (four communities are already grid connected) to the Ontario grid. The connection of First Nations communities currently serviced by diesel generation forms part of the two phase Wataynikaneyap Power project, a First Nations led initiative.
Continued Diesel Generation Case
The estimated cost for diesel generation for Wataynikaneyap's 16 remote communities in 2013 was $43 million, and this cost is projected to grow with load growth, fuel price, and other costs. Based on this current state (continued diesel generation), the present value of avoided costs over 40 years is $3.4 billion. The largest avoidable cost element is fuel; this is also an input characterized by substantial cost volatility and environmental risks. O&M expenses are also significant.
Transmission Connection Case
The estimated capital expenditure required to build the 1500km of transmission line to the 16 remote communities is $1.15 billion (in constant 2015 dollars, including HST). The final routing will be selected on the basis of the results from additional engineering analyses as well as the outcome of community and stakeholder engagement processes. Based on the assumptions described in PwC's report, the net present value (“NPV”) of transmission costs (including capital contributions), plus the cost of purchased energy, is $2.3 billion
Comparison - Transmission vs Continued Diesel Generation
As can be seen below, the estimated annual cost of diesel generation is expected to be much higher than the cost of transmission over the study period.
The table below shows the comparison of contninued diesel generation to transmission connection. Based on the current state and forecast assumptions, PwC estimates that developing and operating a transmission line connecting the 16 Wataynikaneyap remote communities to the grid will result in a net present value of approximately $1 billion over continued diesel generation during the analysis period (2021-2060). Canada, Ontario Ratepayers (RRRP), and communities would see significant savings from the project.