From coast to coast, Canada’s Aboriginal communities are flipping a clean-energy switch—and this story, which is still unfolding, is a classic Canadian tale filled with history, opportunity, enterprise, partnership, and innovation.
Renewable energy development, encompassing hydro, wind, biomass, and solar power, is a massive global infrastructure driver. In 2013, total global capital placed in renewable energy projects totalled $254 billion, according to the Bloomberg New Energy Finance. The Canadian situation has been particularly positive. Moreover, a number of converging trends are promoting Aboriginal participation in the clean energy sector.
Every square kilometre of Canada is Aboriginal land—the traditional territory of more than 1,200 First Nations, Mètis, or Inuit communities that blanket the landscape of the country. In the past, Aboriginal land and water rights were secondary to other private and public interests. This is no longer the case. The Canadian Constitution and a growing body of legal rulings have affirmed that Aboriginal communities must have a definitive say over the use of traditional territory, especially property that is crown or public land.
This emerging standard reflects a fundamental Canadian value: fair play. Rather than repeating the mistakes of history, and taking advantage of and subjugating Aboriginal communities, the new normal recognizes that simply consulting with indigenous peoples is just not good enough today. Aboriginal support and agreement for natural resources development is necessary and can be hugely value-additive when done right.
In the course of this process, Aboriginal communities have taken a leap forward to become project partners.
The Okikendawt Project is located on the French River south of Sudbury, Ontario, a 10-megawatt (MW) new hydro run-of-river generating station being built beside an existing dam. The local indigenous community, the Dokis First Nation, will own 40 per cent of the project at the outset in partnership with Hydromega Services of Montreal, general manager of the project.
The Mother Earth Wind Energy project on Manitoulin Island in Northern Ontario is a wind farm 100 per cent owned by the M’Chigeeng First Nation. The facility captures the strong winds that blow on the northern shores of Lake Huron, generating power which is being fed into the Ontario power grid.
The Dokis and M’Chigeeng First Nations are two among dozens of Aboriginal communities that are partners and co-owners in renewable energy projects across Canada. The “big ones” in this mix are the large hydro and large wind developments, including the following infrastructure initiatives now in the planning or construction stages.
• On the Lower Churchill River in Labrador, Muskrat Falls Hydro has the potential to be a game changer for Newfoundland’s power system. Slated for development by Nalcor, and partially owned (five per cent) by the Innu Nation, the multi-pronged project will cost $6.2 billion and have a generating capacity of 800 MW.
• The Romaine Complex on the north shore of the St. Lawrence in Quebec is a huge hydro project: 1,500 MW in size and requiring $6.5 billion in investment. The project is not without controversy as some opponents believe the development will alter a pristine watershed. However, local First Nations are in support and will receive a one-time payment of $125 million, plus an additional $80 million spread over 50 years.
• The Henvey Inlet First Nation in Ontario is developing the 300 MW Nigig Wind Farm Project with partner BluEarth Renewables. This massive, complicated $1-billion piece of energy infrastructure is poised to become Canada’s largest wind installation—provided it can meet development and financing challenges.
• The Lower Mattagami Hydro Project in Northeast Ontario is a joint venture between the Moose Cree First Nation and Ontario Power Generation. In the final stages of construction, the $2.6-billion build will bring 450 MW of electricity on line, largely by expanding existing dams and reservoirs.
• Now operational, the Dokie Wind Farm in northern British Columbia has a nameplate of 144 MW. The $230-million investment is 25.5-per-cent owned by Alterra, with the balance held by Fiera Axium Western Energy. It is located within the traditional territories of the West Moberly, Saulteau, and Halfway River First Nations and the McLeod Lake Indian Band. The Dokie General Partnership entered into Memoranda of Understanding with all of these First Nations, which allow access through the First Nation’s traditional territories and provides revenue sharing, employment, and contracting opportunities for First Nations members.
• Wuskwatim Hydro on the Burntwood River in Manitoba is a 200 MW initiative. Manitoba Hydro led the $1.4-billion project, which includes a 33 per cent stake held by the Nisichawayasihk Cree Nation. The project represents the first time Manitoba Hydro has entered into a partnership with a First Nations community on a generating station project. First Nations input was also critical during the design and planning phase of the project, which included combining traditional knowledge with scientific knowledge during the environmental assessment studies. Traditional knowledge will continue to play an important role in monitoring the operation of the project from an environmental perspective.
It’s an impressive list of projects based on substantive and significant utility/power-developer and Aboriginal partnerships. In addition, these projects also include a range of impact-benefit arrangements, notably job targets, skills training, and procurement set-asides for Aboriginal service providers. And there’s more.
First Nations, Mètis, and Inuit participation in new electricity transmission infrastructure is a relatively recent development. Projects on the docket being promoted by utilities/governments with Aboriginal partners include: Ontario’s East-West Tie Line, which will be about 400 kilometres long and run between Thunder Bay and Wawa; a line in the Northwest Territories linking the First Nations and other communities south of Slave Lake with a prime grid system in the territory; and up to three lines connecting 18 remote, off-grid Ontario First Nations communities to the provincial grid. In addition, Aboriginal communities are co-owners of several transmission lines, connecting renewable energy generating stations to grids in several provinces, particularly in British Columbia.
In my recent book, Aboriginal Power, I track the clean energy project pipeline in all regions of the country. The numbers are adding up. As of January 1, 2014, some 27 hydro, wind, biomass, and major solar projects co-owned by Aboriginal communities are generating electrons. A further 11 will come on line in 2014, and another 13 will continue in construction for the next couple of years. The flow of energy infrastructure investment doesn’t stop there. Almost 80 additional projects, some at the feasibility stage and others at concept definition, will drive Aboriginal power developments well into the mid-2020s, especially large projects like those described earlier that have long implementation timelines and construction periods. It is critical to emphasize that these numbers are not optimistic, “hope-for” projections: the totals reflect projects with very high likelihoods of realization based on sound business propositions and energy market fundamentals.
Why the Aboriginal power rush across Canada? First and foremost, provinces and territories are procuring more clean energy because of: rising electricity demand in some regions, replacement of antiquated generating capacity, natural resource development, and green or environmental provisions. From Manitoba to British Columbia, and in the northern territories, populations and economies are growing, which requires higher electricity baseload capacity. In some provinces, such as Nova Scotia, Ontario, and Saskatchewan, older (often coal-generating) plants need to be mothballed. Oil and gas extraction and processing, and the minerals sector are on long-term growth trajectories—trends that must be fueled by power. Finally, virtually all jurisdictions are seeking to reduce their environmental footprints and greenhouse gas emissions by promoting green energy resources.
Canadian governments, utilities, and electricity market authorities have also introduced a swath of policies and practices that encourage Aboriginal participation and co-ownership. On one hand, such rule changes have been introduced to recognize Aboriginal land and water rights. On the other hand, these innovations also reflect a rational public policy position that First Nations, Mètis, and Inuit participation makes economic and social sense. The full involvement of Canada’s First Peoples is a win-win proposition for all Canadians.
First Nations, Mètis, and Inuit communities have embarked on this journey with eyes wide open—taking a balanced and business-oriented approach to becoming joint venture partners.
They have also been smart as they leverage their rights over traditional territory. Firstly, they have largely entered into the sector with proven partners such as power development firms, electricity utilities, and engineering companies. Secondly, Aboriginal communities are holding their interests in clean energy projects through corporate trusts and other holding mechanisms with comprehensive governance and management arrangements. Such structures ensure project earnings, which can be very substantial, are applied to purposes supported widely by community members.
It is a fantastic Canadian story. It speaks to a Canada that fully includes First Peoples in the economic fabric of the country through their co-ownership and participation in new clean energy infrastructure.
Chris Henderson is the President of Lumos Energy and the author of Aboriginal Power.