Energy transition modelling for Arctic off-grid communities

Abstract

Fossil fuels are the most common energy source for electricity generation among remote Arctic communities. Around 80% of remote Arctic communities are predominantly dependent on fossil fuels. Even if some of the region's raw oil is extracted, the processed diesel must be imported. Transport is complicated and strongly dependent on weather conditions. The harsh Arctic weather conditions make fuel transportation is complex, risky, and costly, leading to an insecure primary energy supply and high fuel prices. For many inhabitants of remote Arctic communities, the high energy costs are a significant cost burden because unemployment, temporary jobs, and a resulting low income are common issues. This presentation will focus on implementation strategies for renewable energy sources into the energy mix or remote Arctic communities, with the aim of lowering the energy cost burden. System dynamics (SD) was used as a methodology to analyze the implementation process. SD is a powerful tool to analyse complex systems with non-linear relationships, as it is expected to find them among the policy strategies for energy transition. Investing in renewable energy technology is a high-risk investment; therefore, the effects of such an investment must be well studied to gain an optimal result. Furthermore, remote communities are often facing financial issues, which limits investments in energy infrastructure. Therefore, the model is looking for affordable ways of investing in energy infrastructure. The model aims for a sustainable performance of the utility provider, whereas the electricity cost for the consumer can be lowered and the utility provider can perform well on a non-profit base. The research indicates that renewables have a significant cost-saving potential. Despite all the positive effects, investment in renewables can be risky and a substantial commitment for small communities. Moreover, depending on the type of renewable energy source, there can be some environmental impact that must be considered as well. With a well-structured integration process, the most can be made out of the investment, which helps lower the energy cost burden even more.