Frequently Asked Questions
Distributed energy is all about smaller scale energy generation and distribution. Here's the facts you need to know.
Distributed Energy - At a Glance
No, Distributed Energy networks and micro-grids existed well over 90 years ago, prior to the creation of SaskPower.
From the 1920's to the 1940's, utilities all over North America, including SaskPower, centralized and amalgamated electrical service into the utility model we see today. They focused on the customer and made energy service simpler, safer and more cost effective.
Today’s opportunity to is revisit the Distributed Energy model, 100 years later, with much better technology and digital advancements. Now Distributed Energy solutions are simple, safe and cost competitive with the old centralized utility service model. Distributed Energy also allows for greater local economic participation and resiliency whenever the utility service is interrupted.
It's not just Saskatchewan, power service all over the world is changing because of Decarbonization, Decentralization and Digitalzation.
Saskatchewan’s Energy utilities need to plan for the purposeful integration Distributed Energy resources into their energy network. There’s a made in Saskatchewan solution where the Crown utilities, Communities and Industry can work together to provide affordable, sustainable and reliable energy service.
Not exclusively. Let's define cost, not just in terms of 'lowest unit cost'
There’s several aspects to this question.
Firstly, utility scale is described as the cheapest way to add generation to the grid. The conversation of cheap is giving way to more meaningful discussions on energy security, energy resilience, energy sovereignty; all aspects of energy service which utility scale solutions simply fail to provide. We need to keep more of our energy investment dollars in the province through smaller scale energy investments; utility scale energy investment simply exports our dollars to companies and organizations located outside this province.
Secondly, many Distributed Energy solutions make sense today, specifically at the grid-fringe where utility costs are very high, reliability is challenged and sustaining capital is needed simply to maintain service. Moving forward, the economics, value and simplicity of Distributed Energy will improve as traditional grid service costs continue to escalate at 3-4% per year and Distributed Energy technologies continue to scale and reduce in cost.
With Saskatchewan's low cost natural gas, DER technologies like cogeneration and combined heat and power are more economic, reliable and resilient than standard grid service today. Combining CHP with Solar/wind & battery creates micro-grid opportunities at the “grid fringe” as a cost competitive alternative to traditional and "siloed" utility service.
The energy transition is taking place today, we need to plan for the integration of these DE technologies with simple public policy objectives the utilities actively identifying the best hosting opportunities and where DE provides the most economic benefit today, tomorrow and into the future.
Reductions in operating costs, capital costs, and debt burdens. Resilience in times of disruption.
Revenue destruction, grid defection and unfair cost burden to other non-participants are the most common arguments for utilities to oppose Distributed Energy and self-generation as an alternative to traditional utility scale service.
There’s a number of clear benefits to the utilities if utilities choose to be a willing partner and integrate distributed generation technologies into their grid in a planned and purposeful way.
By deploying distributed energy solutions at the grid “fringe”, the utilities would remove the highest cost services from their system, and with their average cost rate methodology, reduce the “cost of a stamp” for everyone. So even non-participants in distributed energy would see reduced cost pressures. Utilities, like any business, can benefit if they can reduce their costs to a greater extent than any revenue reduction. This is a net income increase view to the utility benefit.
Increased innovation and efficiency
The private sector strength is efficiency of service, innovation and customer responsiveness. By partnering with the private sector, the utilities will realize the efficiency benefits of collaboration in delivering energy services versus trying to duplicate these competencies within their organization.
Reduced debt burden
Businesses, communities and distributed energy providers all want to financially participate in the future of distributed energy service. Why continue to burden the utility and the province with a substantive and long term debt when people, businesses and communities are willing and able to invest in their own energy service?
There’s a number of additional benefits to the utility with a planned and purposeful energy transition to Distributed Energy:
Reduced workload burden- Rather than task the utility with creating, delivering, monitoring and managing outcomes associated with distributed energy, let them focus on what they do best- core utility scale energy service. The Distributed Energy Association, working with utilities, private sector and community members, is more than willing to pick up the gauntlet, knowing there’s a future target and placeholder for distributed energy technologies developed through clear public policy.
Transition is certain, disruption is a choice- Even if Saskatchewan continues to do very little, distributed energy technologies will continue to become more and more cost effective while traditional utility service costs will continue to increase. If we simply wait until those two cost trajectories intersect, and energy alternatives are now more more attractive than traditional grid service or “stand on their own two feet”, there will be a significant and uncontrollable migration away from grid service- a grid exodus. This can result in significant over investment in generation and stranded assets for the utility. These are costs that will be borne by low income, elderly and other communities and customers that do not participate in energy choice. This is a totally avoidable outcome; evolution not revolution is the key to transition.
Federal Funding- Community and Distributed scale energy solutions can attract significant portions of the $11 Billion of federal funding for efficient, resilient, renewable and sustainable energy solutions. Given Saskatchewan's position as the most emissions intensive economy and scoring last in Canada on efficiency, we, arguably have the furthest to go. Let's utilize Federal funding support to finance our transition; burdening the people and businesses of this province with the total cost will simply disadvantage our ability to attract new business and grow.
By becoming more efficient during the transition, utilities will maintain more customers in the long run.
There's a world of best practice examples we could mold into a 'made in Saskatchewan' solution.
Saskatchewan is arguably lagging other jurisdictions in Distributed energy efforts, but we can be a "fast follower" by adopt the best regulatory and service practices occurring elsewhere in the delivery model for energy service.
As first point of contact, need to “change the conversation” with new and existing customers to speak about energy efficiency goals, community development and energy security goals, and move the conversation from gas and electric “molecules and electrons” to energy service aligned to business and community needs. Utilities would be an active partner, not a competitor, with the distributed energy industry in meeting these customer needs. Utilities are best placed, with their significant community presence, to deliver on efficiency programs both for production and consumption of energy; however program targets and goals could be developed outside the utilities.
Agency for Efficient Energy Production
There should be an new independent and autonomous agency tasked with the efficiency targets, pathways and programs for achieving public policy milestones and community and business goals related to efficient and renewable energy generation both utility and non utility scale.
We don’t need to lead and recreate the energy service “wheel”, we can simply adopt and integrate best practice from elsewhere as a “fast-follower” to create a “made in Saskatchewan” solution.
A balanced approach to energy service would see all stakeholders playing to their strengths in the delivery of energy service within the province.
Governments would provide clear policy, direction and legislation on renewable and efficient energy targets and goals ie "space and opportunity" with a view to optimizing benefits to people and businesses within the province.
There would be clear opportunities for private sector participation and deployment of new and efficient technologies, supported through dealership networks and engagement of the Distributed Energy Association by the utilities.
Cities and towns would have energy efficiency goals and energy resilience and security targets developed and supported with municipal public energy policy.
The DEAS is looking to consolidate and streamline efforts by the community, business, and energy advocacy groups to create a simplified and unified message around the Distributed Energy opportunity - no one can go it alone; let’s cooperate and collaborate.
Together we are stronger.
Distributed Energy (DE) is about smaller scale and distributed electrical generation, both renewable and nonrenewable, installed directly at the load or point of consumption.
Historically, electricity has only moved in one direction. Large scale synchronous power is typically generated at an energy resource (e.g. coal, hydro, wind etc), and then transported many hundreds of kilometers to cities and industry where the electrical power is then consumed.
Distributed Energy (DE) is about smaller scale and distributed electrical generation, both renewable and nonrenewable, installed directly at the load or point of consumption. Distributed Energy provides two-way energy flow, allowing for energy sharing. Energy production at the point of consumption creates customer resiliency, employs more efficient technologies and reduces the need for expensive transmission infrastructure upgrades. Ultimately DE is about more efficient and reliable energy production and use which saves money for energy consumers.
The concept of a load being both an energy consumer and energy producer, all in one, is referred to as a prosumer.
Canada's Federal government has committed to improve the national energy grid average from 82% to 90% green or low emission by 2030. Saskatchewan has a long ways to go, and should take advantage of Federal investment dollars.
In addition to the three D’s of disruption (Decentralize, Decarbonize and Digitize), another big driver of the Energy Transition is the Federal governments commitment to improve the national energy grid average from 82% to 90% green or low emission by 2030.
Unfortunately, Saskatchewan is heavily reliant on coal for generation with only 25% of the power generation in the province being renewable.
For Saskatchewan there are two key impacts:
- With the most emissions intensive economy and last place ranking in efficiency, Saskatchewan has farther to go than most other jurisdictions in “greening up” its energy service to meet Federal emissions targets. This means billions of dollars in new costs and capital to retire and replace coal-generation assets. Saskatchewan, rightfully, should be a major recipient of the roughly $11 Billion of Federal investment dollars for sustainable, resilient and efficient energy solutions. As a province we shouldn’t have to and can't afford go it alone.
- Saskatchewan’s solution in managing this Energy Transition is in the near exclusive construction of utility-scale wind and baseload combined cycle gas generation. Now is the time to look at technology and people, to “energize the future” with a more inclusive view to Distributed Energy use and deployment.
A long way to go, but the ingredients for success
Saskatchewan is blessed with world class wind, solar and geothermal, as well as an extensive natural gas distribution infrastructure that serves 94% of the communities and businesses within the province.
Saskatchewan also has direct access to some of the lowest priced natural gas in the world, yet less than 2% of the planned generation over the next 10 years is Distributed Energy scale.
Given Saskatchewan’s large geographic area, the highest emissions per person and last place ranking in efficiency , Saskatchewan could and should be doing much more to deploy Distributed Energy solutions.
These proven and efficient technologies provide a cost effective and reliable energy alternative to utility-scale generation, keeping energy investment dollars in the province, creating many new jobs and saving the province and energy consumers hundreds of millions of dollars in reduced energy and avoided Carbon tax costs.
We have the people, the resources and technology, and with Federal funding, the financial support to fund Saskatchewan's Energy transition.
Geography, Capital Investment and Resiliency. And more.
There are several reasons why Distributed Energy rightly deserves to play a much greater role in Saskatchewan’s future Energy Service:
Saskatchewan has one of the largest service areas with a very small customer base at only 3 customers per km - this is a systemic driver for the high energy cost in Saskatchewan; energy generation at the point of delivery makes much more sense in Saskatchewan than in most other jurisdictions within Canada.
Over the next ten years, the utilities will invest billions of dollars to renew, replace and upgrade generating, transmission and storage capacity due to age and the retirement of coal. We should invest in efficient and distributed energy technologies to create opportunities and jobs for businesses and communities across the province.
Distributed Energy provides something that utility scale service cannot, namely energy resiliency or energy security for the consumer. Energy security is important when planned and unplanned outages reduce the overall reliability of service to customers.
It's simple here with the Saskatchewan Energy advantage
Saskatchewan has a significant advantage over most other jurisdictions when it comes to an Energy transition.
The Crown model with a single utility owner in CIC (Crown Investment Corp) should be seen as the “Saskatchewan Energy Advantage”. This simple ownership structure can make the energy transition to a cooperative and shared Utility and Distributed Energy service model much simpler and easier in Saskatchewan than in any other jurisdiction.
Legacy thinking is as much a barrier to change as legacy assets; change requires first and foremost a willingness to recognize issues associated with a 90 year old business model and entertain a new shared model of energy service, supported through a combination of public policy, energy self-generation programs and lastly private sector and public participation.
The Distributed Energy Association was created to facilitate the energy service transition in a way that drives efficiency in the production of power and balances the outcomes and benefits for the utility, technology and community partners alike.
C-A-R-E: Collaboration, Assets, Resilience, Emissions
Here’s why Saskatchewan should CARE about Distributed Energy:
Distributed Energy creates energy awareness for conservation and allows people and communities to directly participate in their own energy service and choice. This drives Crown/Industry/Community energy service collaboration to a whole new level.
DE allows people, businesses and local industry to directly invest in providing energy service, so more of the investments dollars stay in the province. Communities everywhere are moving from Energy as a service to energy as a business.
DE deployed at the highest cost delivery areas and using utility hosting benefit drivers for deployment, results is a more efficient and resilient grid, benefitting all users.
Smaller scale industrial and commercial combined heat and power is much more efficient than the utility scale gas-fired baseload this is resource conservation and drives reduced carbon tax impacts for energy consumers.
Last Updated: 02-Mar-2021
The time is right for a new way, a distributed way, a collaborative way, to provide energy service in Saskatchewan.
Rise in investment in smart grid technologies, increase in shift toward efficient energy technologies, and advanced metering infrastructure fuel the growth of the global smart energy market. Based on product, the smart grid segment accounted for the highest market in 2019. Moreover, the market across North America dominated in 2019 and would lead the trail throughout the forecast period.