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Yukonomist: Connecting to the big grid

Are you a fan of the game Power Grid? Do you ever daydream about quitting your job and enrolling in Power Grid School at Michigan State?

Are you a fan of the game Power Grid? Do you ever daydream about quitting your job and enrolling in Power Grid School at Michigan State?

If so, here’s a brain teaser for you.

Suppose you ran a small triangular-shaped northern jurisdiction, whose mini-grid is isolated from the North American grid. The International Energy Agency thinks Canada will need two to three times more renewable power for the climate transition. Should you spend your billions on building local renewable power plants or a connector line to the continental grid?

It’s a real question, brought up in the legislature after the Yukon’s recently announced addition of five new diesel generators. This brings our fleet to 22 and puts us in that awkward club of jurisdictions who announce increases in fossil fuel power in between attending UN climate conferences.

In February, Pakistan said it would be quadrupling coal-fired power. Vietnam’s new draft energy plan sees increases in coal use through 2030. Even climate-conscious Germany brought retired coal power plants back online in 2022.

These countries can blame Vladimir Putin. Germany literally had to find a way to keep the lights on as natural gas imports from Russia plummeted. The Russian invasion caused liquefied natural gas (LNG) prices to surge, pummeling poor countries such as Pakistan and Vietnam where higher power bills are devastating for people earning just a couple hundred dollars a month.

We, meanwhile, were mostly sheltered from the invasion’s effects. Diesel and LNG prices paid by the Yukon went up, but by a fraction of the amount in Asia or Europe. Scanning a decade of government press releases suggests we want more renewables, but struggle to actually build sizable plants. The Atlin micro-hydro expansion saga is just the latest example.

Over the last two decades, the share of our power coming from renewables has fallen from nearly 100 per cent to around 93 per cent. As I wrote this column, Yukon Energy’s online power tracker said we burned fossil fuels every month in the last year, every week in the last month and every day in the last week.

This undermines the case for buying an electric vehicle or switching to electric heat. We don’t have a digital system to signal your car battery or heat pump to only run at times when the power is 100 per cent renewable. You could pay the big bucks for an electric vehicle, only to find it was being powered half the time by Yukon Energy diesel.

So, to help you write your application essay for Power Grid School, let’s look at the options.

Option 1 is to spend a few billion dollars connecting the Yukon grid to the North American grid so we could get BC Hydro renewable power. Here’s what a booster of Option 1 might say.

A BC Hydro connection would give us enough power to go to 100 per cent renewable power, supporting eventual 100 per cent electric heat and vehicles. It would enable low-carbon mines all along the route from the Stewart-Cassiar highway through Watson Lake to Whitehorse and wherever the Yukon grid extends.

This could be a huge win for the Casino mining project, for example. They could build their mine to be low-carbon from the beginning, rather than have to go fossil until the Yukon got around to building more renewable power.

The project would also be a huge testament to reconciliation and the effectiveness of Yukon governance. For the roughly 1,200-kilometre project to happen, you would need to work with five Yukon First Nations, several British Columbia First Nations, the Yukon and B.C. governments and multiple federal agencies. Two government owned utilities would need to be heavily involved as would First Nations development corporations, federal funding agencies and private investors.

The project would also enable us to replicate the energy model we enjoyed during the fossil fuel era. In that period, the Yukon had oil and gas resources but decided not to develop them. In 2019, for example, we produced zero litres of refined petroleum products and imported 217 million litres. This cost us a quarter of a billion dollars, but allowed us to avoid the political and environmental trade-offs of producing our own.

The B.C. grid tie-in would allow the same. There would be no need for controversial projects like Atlin or Moon Lake pumped storage. We would just buy our power from B.C. like we buy our gasoline from Alberta.

Although the construction of the project would involve a lot of jobs, once it was done there would be relatively little effort required to maintain it. The intertie would also enable significant reductions in costly staff at Yukon Energy, Yukon Environmental and Socio-economic Assessment Board and the territorial energy department. In this sense, outsourcing power production jobs to B.C. would help solve our housing and labour shortages.

The intertie would also simplify the challenge of deciding Yukon electricity prices. We would be part of the North American grid so would compete with Washington and California for B.C. power. We would simply pay whatever the going rate was and that would get passed on to Yukoners.

A booster for Option 2 would take many of the same points above but spin them against the intertie.

Instead of one big indigestible megaproject, there would be many bite-sized projects. Think of a future with a dozen Atlins, a dozen large wind farms, a handful of Moon Lakes or hydrogen backup plants, some minor grid extensions to new mines and maybe some geothermal or a small nuke or two.

Instead of huge surplus intertie capacity in the initial years, you build up generation capacity in small steps as demand for electric vehicles and heat grows.

Instead of outsourcing power jobs to B.C., you create well-paid engineering and union jobs here.

Instead of B.C. investors getting the returns, they go to Yukon First Nations development corporations and our private sector.

Options 1 and 2 are both very difficult, and we are not moving very quickly in either direction. Which is why Alberta diesel and LNG producers can, in effect, count on the support of the Yukon for years to come.

Keith Halliday is a Yukon economist, author of the Aurore of the Yukon youth adventure novels and co-host of the Klondike Gold Rush History podcast. He won the 2022 Canadian Community Newspaper Award for Outstanding Columnist.

Stephanie Waddell

About the Author: Stephanie Waddell

I joined Black Press in 2019 as a reporter for the Yukon News, becoming editor in February 2023.
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