7.4 Summary of Options to Meet Ring of Fire Subsystem Needs
The Ring of Fire is a vast geographic area on the edge of the Hudson Bay Lowlands north of Long Lac and east of Pickle Lake. There are five remote First Nations (“FN”) communities in the area (Eabametoong FN, Neskantaga FN, Marten Falls FN, Nibinamik FN and Webequie FN) and a proposed mine development area called the Ring of Fire, where a number of companies are developing claims. At present the five remote First Nations communities are supplied electricity by local diesel generators.
The needs identified for the Ring of Fire subsystem in Section 6, are for the five remote communities to be connected to the provincial transmission system and to supply future mines. Since the least cost solution for the remote communities is a transmission connection to Pickle Lake, and it cannot be completed until at least 2017, the connection needs of these communities cannot be met by the system until that time. As mines at the Ring of Fire are not expected to start up until 2017 at the earliest, therefore they also have no needs in the near-term. As a result, all of the needs of the Ring of Fire subsystem are considered to occur in the medium- and long-term. A summary is provided in Table 23.
Table 23: Needs for the Ring of Fire Subsystem Needs Required Load Meeting Capability
Near term (2013- 2016)
 Connect 5 remote communities with 3 MW of load 3 MW
Medium and long term (2017-2033)
 Supply up to 7 MW of remote community demand and 40 MW to 70 MW of mining demand
47 - 77 MW
An assessment developed for the draft Remote Community Connection Plan determined that up to five remote First Nations communities in the subsystem are economic to connect to the grid. The economic rationale for connecting remote communities in northwestern Ontario to the provincial transmission system is developed in the draft Remote Community Connection Plan (see Appendix 11.2). As a result, all
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options identified for this subsystem include the connection of the five remote communities included in this subsystem.
Options to meet these requirements include:
 Connection of mines and remote communities to the transmission system; or
 Connection of the remote communities and on-site generation fueled by diesel or natural gas for the mines.
Given the Ring of Fire subsystem’s relative proximity to both Marathon and Pickle Lake, both are potential transmission supply points for the subsystem. It should also be noted that 230 kV supply at Pickle Lake is the minimum requirement for connecting any mining load at the Ring of Fire to Pickle Lake.
At present it is unclear how mines at the Ring of Fire will be supplied electricity. Cliffs Natural Resources (“Cliffs”) and Noront Resources Ltd. (“Noront”) have issued Ontario Environmental Assessment (“EA”) Terms of Reference reports for their projects, which identify their current plans to supply electricity to their future mine projects at the Ring of Fire. Cliffs17 has indicated a preference for on-site generation fueled by either diesel or natural gas. Noront18 has identified a preference for connection to the transmission system, but specifies diesel generation as its base case because of uncertainty regarding when transmission connection may be feasible. Both Cliff’s and Noront have indicated in their respective EA Terms of Reference that using renewable generation
17 Cliffs Natural Resources Chromite Project EA TOR Section 6.2.1.3 identifies mine electricity supply options - http://www.cliffsnaturalresources.com/EN/aboutus/GlobalOperations/chromite/Documents/Ferro%20Report%20Up dates%20-%20January%202013/Final%20Amended%20ToR%20-%20January%202013.pdf 18 Noront Resource LTD. Eagle’s Nest Project EA TOR Section 6.5.2 indentifies the use of on-site diesel generation as its base case - http://www.norontresources.com/?pressreleases&pdf=Final_Terms_of_Reference_Amended_2012_11_19_09_49_4 4.pdf
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resources for primary mine supply is not preferred. Table 24 below summarizes the evaluated options.
Table 24: Summary of Options to Meet the Medium- and Long-Term Needs of the Ring of Fire Subsystem Capital Cost1 PV Cost Incremental Load Meeting Capability PV Unit Cost of Incremental Capacity
Diesel Generation (High) + Remote Connection
Low: $275 M2 High: $324 M2
Low: $803 M2 High:$1,320 M2
47 MW 77 MW
$17.1 M/MW $17.1 M/MW
CNG Generation (High) + Remote Connection
Low: $327 M2 High: $415 M2
Low: $515 M2 High: $815 M2
47 MW 77 MW
$10.9 M/MW $10.6 M/MW
115 kV Line from Pickle Lake to Ring of Fire
$307 M2 $309 M2 47 MW $6.6 M/MW
230 kV Line from Pickle Lake to Ring of Fire
$400 M2 $438 M2 77 MW $5.7 M/MW
230 kV Line from Marathon to Ring of Fire
$346 M $399 M 77 MW $5.2 M/MW
(1) Description of capital costs can be found in the following tables: Generation, Table 26; Transmission, Table 27 (2) Transmission options routed from Pickle Lake include a prorated portion (based on the relative amount of load that would be supplied to each party) of the cost for a new 230 kV transmission line to Pickle Lake.
While, both the generation and the transmission options can meet the needs that have been identified at the Ring of Fire, a transmission line connecting the five remote communities and potential mines at the Ring of Fire would be the lowest cost option for the forecast range of mine development at the Ring of Fire. How costs of transmission are allocated between these groups of customers may have an impact on individual costs of particular future mine customers.
7.4.1 Discussion of Options to Meet Medium- and Long-Term Needs
Currently, the five remote communities in the Ring of Fire subsystem are provided electricity by local diesel generators. As discussed previously, up to five of these communities are assumed to connect to the transmission system.
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It is not feasible to have any transmission options in-service to serve remote communities until at least 2017 and the earliest the Ring of Fire mines will be in operation is 2017. Therefore the discussion of options is focused on meeting the needs of the subsystem in the medium and long term.
Generation Options
The Ring of Fire area mine developers, Cliffs and Noront, are developing options for mine site generation, as identified in their EA Terms of Reference. They have identified that diesel or CNG fueled generation plants can provide sufficient capacity and energy to reliably meet their needs and can be brought into service within their mine development timelines. The proposed all-season road that would connect the Ring of Fire to the provincial highway system (current proposal is near Nakina, Ontario) would enable the transportation of the large volumes of fuel required to operate mine site generation of this scale.
However, mine site generation would not serve the needs of the five remote communities which have already been identified as economic to connect to the transmission system at Pickle Lake. These communities are currently supplied by local diesel generation. Due to the difficulty of storing sufficient volumes of natural gas in the communities, they would not be able to access a supply of CNG unless all-season roads are built to connect them to the provincial highway system. Therefore, should the Ring of Fire mines choose mine site generation for their electricity needs, it is assumed that the remote communities will connect to Pickle Lake through a separate remote community connection project, which is discussed in detail in the draft Remote Community Connection Plan. The cost of serving the remote communities by transmission and the Ring of Fire area mines with mine site generation are considered together as an integrated option for serving the Ring of Fire subsystem.
The OPA evaluated the feasibility and relative economics of various mine site generation options. Findings indicated that reciprocating engines fueled either by diesel
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or natural gas could power future mines at the Ring of Fire, which is consistent with the respective EA Terms of Reference of Cliffs and Noront. These units are available in a large range of sizes which allows for capacity to be scaled to meet a wide range of needs for individual mines initially and over time. Mine developers at the Ring of Fire have plans for transportation systems that would connect the Ring of Fire to the provincial transportation network, by either road or rail. One of these options is an all- season road from the Ring of Fire to the railway near Nakina. For the purposes of this regional plan it is assumed that fuel would be transported to the Ring of Fire via the provincial road network to Nakina and then from Nakina to the Ring of Fire via the proposed all-season road. Other all-season roads or rail lines designed to carry mining supplies and ore could transport fuel to the mine sites.
Supplying mine site generation with diesel is common practice. Diesel fuel can be purchased at a number of bulk storage facilities in northwest Ontario and transported to mine sites. CNG also appears to be feasible though there are no direct examples that the OPA could reference for remote mining applications. The OPA has leveraged available public information and worked with industry to establish a reasonable set of assumptions and inputs that were used to develop cost models for both remote diesel and CNG fueled DG. The cost of fuel transportation infrastructure (trucks and trailers) required to transport both diesel and CNG to the mine sites has been included in the cost analysis.
The infrastructure required to fuel a natural gas generation facility at the Ring of Fire would include a compression station located along the TCPL mainline with road access to the all-season road to the Ring of Fire beginning near Nakina. Due to the complexities and permitting required to build a CNG storage facility at the mine site, the OPA understands that no CNG storage facilities are planned for the mine sites and that fuel would be delivered on a just in time basis, with allowance for only a few trailers to be kept on site.
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While the process is not substantially different from the transport and use of diesel, there are more steps and facilities required to compress, transport and decompress the gas before it can be used. Further without significant on-site storage facilities, natural gas transportation logistics will be more challenging particularly during inclement weather when the all-season road may be closed for extended periods. Therefore, it is likely that the generators will be capable of using both diesel and natural gas. Mines will have large scale diesel storage on site to fuel their vehicles and heavy equipment which could be used to fuel the generators when natural gas supply is interrupted. The OPA has also shared the results of its CNG cost model with industry to ensure the reasonability of the findings.
Liquefied natural gas (“LNG”) may also be a feasible option to fuel generators. However, it is not clear what minimum production volume is required to establish a natural gas liquefaction facility in northwest Ontario or what the economics of such facilities would be. As a result, the OPA cannot assess either the feasibility or the economics of LNG at this time.
The costs for supplying the forecast mining load by generation at the Ring of Fire are summarized in Table 25.
Table 25: Generation Options at the Ring of Fire Capacity Initial Capital Cost
Average Annual Fuel and O&M
Total PV
Diesel Generation (Low) 40 MW $65 M $76 M $688 M
Diesel Generation (High) 70 MW $113 M $133 M $1,205 M
CNG Generation (Low) 40 MW $116 M $33 M $400 M
CNG Generation (High) 70 MW $203 M $58 M $701 M
As discussed above, the integrated options for serving the needs of the remote communities and the mines in the Ring of Fire subsystem includes a transmission connection option to serve the five remote communities from Pickle Lake in the case
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where the Ring of Fire mines do not connect to the transmission system. This option would consist of a 115 kV transmission line from Pickle Lake to an end point near Webequie FN, passing near Neskantaga FN. Transformer stations to serve the communities would be sited near Neskantaga FN and at the end of the line near Webequie FN. Neskantaga FN, Eabametoong FN and Marten Falls FN would be connected via distribution lines and stations to the transformer station near Neskantaga FN, while Webequie FN and Nibinamik FN would be connected by distribution lines and stations to the transformer station near Webequie FN. Figure 36 in Appendix 10.7.3 shows this planned connection system for the five remote communities.
The OPA has estimated the cost of connecting the five remote communities in this subsystem to be $115 million. This $115 million cost includes 10% of the costs for a new 115 kV line to Pickle Lake. This 10% portion of cost has been included because the new 115 kV line to Pickle Lake is required to supply the five remote community loads and these communities are considered beneficiaries of this line. In accordance with the TSC issued by the OEB, beneficiaries must pay their portion of costs for this facility. The costs of the integrated options for mine site generation and transmission connection of remote communities are summarized in Table 26.
Table 26: Integrated Option for the Ring of Fire Subsystem; Mine Generation and Remote Community Connection to Pickle Lake LMC PV of Mine Site Generation PV Remote Connection Total PV of Integrated Option
Diesel Generation (Low) + Remote Connection 47 MW $688 M $115 M $803 M
Diesel Generation (High) + Remote Connection 77 MW $1,205 M $115 M $1,320 M
CNG Generation (Low) + Remote Connection 47 MW $400 M $115 M $515 M
CNG Generation (High) + Remote Connection 77 MW $701 M $115 M $815 M
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Transmission Options
Transmission options for supplying the five remote communities and mining load at the Ring of Fire together include a 115 kV single circuit line from Pickle Lake or a 230 kV single circuit line from either Pickle Lake or Marathon TS.
Power flow studies show that a single circuit 115 kV line from Pickle Lake could supply up to 40 MW of mining load at the Ring of Fire plus 7 MW of remote community load. Figure 37 in Appendix 10.7.3 shows a potential configuration of the North of Dryden system with a 115 kV connection to the Ring of Fire from Pickle Lake.
Due to the distance from Marathon to the Ring of Fire it would not be economic to supply the low demand level (40 MW of mining load plus 7 MW of remote community load) from Marathon. To do so would require a new 230 kV line from Marathon TS to a new 230 kV TS near Nakina and then a new 115 kV line from the new 230 kV TS at Nakina to the Ring of Fire. The combined costs of these two lines and the 230 kV TS at Nakina is substantially more than a new 115 kV line from Pickle Lake plus a prorated portion of the costs for the 230 kV line to Pickle Lake. Therefore, it is the OPA’s view that a new 115 kV line from Pickle Lake to the Ring of Fire is the cost effective transmission option for serving the lower demand level in the Ring of Fire subsystem (up to 47 MW) and thus it is the only transmission option included for this demand level.
To serve mining and remote community load beyond 47 MW a new 230 kV connection to the Ontario transmission system is required for the Ring of Fire subsystem.
Given the forecast potential for up to 70 MW of mining load at the Ring of Fire and the 7 MW of remote community load (upper bound of the demand forecast) it is prudent to consider a 230 kV connection system for the Ring of Fire subsystem. These options include:
1. A new 230 kV single circuit line from a new 230/115 kV station at Pickle Lake to the Ring of Fire, and new 230/115 kV TS near Neskantaga FN; and
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2. A new 230 kV single circuit line from Marathon TS to a new 230/115 kV station at the Ring of Fire and a new 230/115 kV station near Marten Falls FN.
Both options are capable of serving the upper bound of the demand forecast (77 MW) and their capacity could be expanded to serve up to about 125 MW of total load in the subsystem, if needed beyond the planning period. The Pickle Lake option requires 230 kV supply and a new 230 kV station in Pickle Lake to serve Ring of Fire mining load. A prorated portion of the costs for new a 230 kV transmission line and station from the Dryden area to Pickle Lake is included in the cost of the Pickle Lake to Ring of Fire 230 kV line option. These options are shown in Figure 39 and Figure 41 in Appendix 10.7.3.
As mentioned in Section 7.4.1, the five remote communities in the Ring of Fire subsystem have been identified in the draft Remote Community Connection Plan as being economic to connect on their own. It is therefore assumed that if the Ring of Fire mines do not connect to the grid, then the five remote communities will connect to the transmission system at Pickle Lake. The lowest cost transmission connection for these communities is a single circuit 115 kV line from Pickle Lake to new 115/44 kV transformer station near Webequie FN.
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Figure 36 in Appendix 10.7.3 shows the North of Dryden transmission system with the connection for these communities on their own. A summary of the cost and capabilities of these options is provided in Table 27.
Table 27: Capacity and Costs of Transmission Options LMC Capital Cost Prorated Capital of Line to Pickle Lake
Total Capital
Total PV During Planning Period
Remote Community Only Connection from Pickle Lake (115 kV)
7 MW $196 M $15 M $211 M $115 M
New 115 kV line from Pickle Lake to Ring of Fire
47 MW $222 M $85 M $307 M $309 M
New 230 kV line from Pickle Lake to Ring of Fire
77 MW $291 M $109 M $400 M $438 M
New 230 kV Line from Marathon to Ring of Fire
77 MW $346 M N/A $346 M $399 M
The cost allocation for the new line to Pickle Lake and any connection line to the Ring of Fire shared by mines and remote communities would be determined either through commercial agreements or through the OEB’s Leave to Construct application process.
Comparison of Options to Meet Medium and Long-Term Needs
The comparison of options to meet the medium- and long-term needs of the Ring of Fire subsystem considers societal costs borne by all parties involved including customers and the provincial rate payers in general. The eventual allocation of costs between these parties has not been considered, nor has the varying costs of capital that various parties would face were they to invest in the identified options.
Based on this framework, the lowest cost option for meeting the medium- and long-term identified needs is a transmission connection from either Pickle Lake or Marathon to the Ring of Fire. The incremental cost of developing a transmission connection capable of serving mines and remote communities is substantially lower than the cost of generation to serve mines in the generation options.
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8 SUMMARY OF RECOMMENDATIONS
Recommended solutions for the North of Dryden area consider that the near-term needs are more certain than the medium- and long-term needs due to uncertainty regarding demand growth beyond 2017. Given that the existing transmission facilities serving Ear Falls (E4D), Red Lake (E2R) and Pickle Lake (E1C) have reached their respective load meeting capabilities, it is prudent to undertake development work on options that can quickly and cost effectively increase capacity to serve the near-term needs of the North of Dryden area.
Therefore, it is recommended that development work be undertaken as soon as possible for two high value projects that are needed to meet the near- and medium-term needs:
 New line between the Dryden area and Pickle Lake; and  Upgrade of E4D and E2R.
The OPA understands that near-term actions for implementing a new line to Pickle Lake have been initiated by two proponents for this line, Wataynikaneyap Power Ltd. and Sagatay Transmission L.P.
As set forth in the PPWG report to the OEB for regional planning, the OPA will send a hand-off letter to Hydro One to initiate a Regional Infrastructure Planning process for the Red Lake subsystem. The Regional Infrastructure Planning process will enable development and implementation of the near-term transmission component (upgrade of E4D and E2R) of this regional plan. This will also transition the lead responsibility for these near-term projects from the OPA to Hydro One.
These near-term projects have an estimated PV cost of between $230 million and $265 million (depending on the voltage for a new line to Pickle Lake), and they will more than double the existing LMC of the North of Dryden area from 85 MW to between 195 MW and 265 MW.
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The OPA will continue to monitor progress on these projects; demand growth, conservation activities and the uptake of transmission line capacity in the area for the purpose of ensuring forecast needs for the North of Dryden area are met.
When the medium-term needs (scope and timing) for the Red Lake and Ring of Fire subsystems become more certain, reinforcement projects can be triggered with appropriate lead times to ensure that the needs will be met.
Some projects may require funding by customers, in accordance with the TSC. In these cases the projects cannot proceed until customers have committed the required resources. Therefore, the timing of these facilities may be partially dependent on when customers can identify their needs and provide commitment to the project.
Due to the current level of uncertainty regarding the location, scope and timing of longer-term demand growth in the Red Lake and Ring of Fire subsystems proceeding with system expansion projects to serve the medium and long-term demand growth is difficult to rationalize at this time. The connection of remote First Nations communities is expected to proceed separately unless mine developers come forward to participate in a joint connection project.
Additionally, conservation and distributed generation resources are important contributors to the integrated solution for addressing the needs of the North of Dryden area. The OPA has and will continue to actively work with existing and future customers in the North of Dryden area to pursue conservation and DG. The OPA will continue to work with interested customers to understand the availability of potential resources including conservation and customer based DG in the North of Dryden area.
Monitoring growth in electricity demand and the achievement of conservation and distributed generation in the North of Dryden area will be key components of on-going electricity planning in the area. Options to address potential long-term needs are identified in this regional plan, but selection of solutions will be dependent on how the
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needs of the area develop over time. Therefore, both needs and options for the longer term will be reviewed in updates to this plan.
The recommended solutions in the North of Dryden area are consistent with the broader planning and development work that is underway to ensure an adequate supply is available in the Northwest as a whole. This includes the expansion to the East-West tie, co-generation in the Kenora District and potentially the development of new generation and transmission into the Dryden area.