Yukon policy wonks got a treat this week in the form of Yukon Energy’s release of the final parts of its resource plan.
Yukon Energy puts out the most fact-driven, analytical and rigorous strategic plans I have seen in the Yukon. More than one Yukon government department would benefit from a plan that was even half as substantive.
Since you as a Yukon citizen own a piece of Yukon Energy, and are probably totally dependent on their product, you should go to their website and look at the charts. They do a good job of presenting the factors an electricity company needs to think about as it plans for the future. It is a complex problem-solving challenge, including factors such as:
• Capacity: do we have enough power when our needs peak?
• Energy: can we generate enough energy to cover our needs throughout the whole year, including if we use more electric heat and cars in the future or have some big mines start?
• Cost: will our energy be affordable for Yukon homes and businesses?
• Climate change: how can we reduce our carbon emissions cost-effectively?
• Timing: how many years does it take to build new generating capacity?
• Political and social factors: how to involve citizens and First Nation governments and include their preferences in the outcome?
The report has several key findings.
First, the report has a clear warning for us. If Yukon Energy’s biggest plant or transmission line went down at the same time we were at peak winter electricity demand, we would not have enough power. This is not an acceptable risk for a modern society and economy. Regardless of where you stand on debates such as renewable versus fossil-fuel power, I think we should all agree this needs to be fixed as soon as possible.
Kudos to Yukon Energy management for stating this so clearly in their report. Some government departments would have been tempted to conceal this fact in a public non-report full of bureaucratic bafflegab and stock photos of happy Yukon families.
Second, the report’s forecasts on electricity demand were a surprise to me. With low industrial activity, our energy needs barely move from around 400 gigawatt-hours per year now, to under 450 in the 2030s. The medium industrial scenario with several mines would boost this to around 550. Even this, though sizable, is not a gigantic increase in demand requiring massive new dams.
One of my favourite ideas has been to use surplus electricity to transition Yukon homes from oil heat to electrical. The report takes a dim view on this idea. It points out that, unless we change electrical pricing for the use of such surplus power, electrical heat is currently over 20 per cent more expensive than even old oil furnaces (measured on a cost per gigajoule basis). Also, we are running out of surplus power compared to a decade ago. I still believe this is an idea needing more creative thought, but the report shows the challenges of getting Yukoners off their oil and propane tanks any time soon.
The report also looks at the potential for electrical cars. However, even with some additional electrical heat and electric car usage, our power demand does not skyrocket. We need some more generation, but not an enormous amount.
Third, quite a few small and mid-sized generating options have reasonable costs. I use 15 cents per kilowatt-hour as a rough rule of thumb. The report estimates that several micro-hydro and wind projects could deliver this. Even some solar projects get close, although solar has timing problems when you need power on cold winter nights.
Fourth is the output of the complex utility computer model used to optimize the plan considering all the factors mentioned above. This produces a plan that includes our existing assets plus a third natural gas turbine, a new energy storage facility, upgrades to existing turbines and dams as well as a new microhydro facility. It also leaves space for an independent power producer, whether that is another utility or a consortium of Yukoners and First Nations who build a power plant.
The cost of these facilities is $207 million in the low-growth scenario, and $299 million in the medium one. Assuming these facilities are built, it remains to be determined how the bill will be split between the federal government, Yukon government, private and First Nations investors and ratepayers (i.e., you).
The ball is now in the court of the new government in Whitehorse, since Yukon Energy is government-owned. Solving the reliability risk is job one and should be expedited. If houses freeze because Aishihik goes down when it’s -40C next winter, it will be on them.
On the other investments, they have more time. But they will find that the consultation, financing and decision processes on such projects can take years. They need to start now and move steadily forward. If we go into the next election without new generation capacity under construction, it will be a big red ‘F’ on their report card.
Yukon Energy’s resource plan is also an opportunity for the Yukon government on the climate change front. Yukon Energy is rightly focused on meeting the electrical needs of Yukoners on the current grid. But the Yukon government could think bigger, and develop ways to dramatically shift the Yukon’s mix of energy from fossil fuels to renewable electricity. This means a big shift to electrical heat and cars. As mentioned above, this is not easy. But now is the time to put some energy and creativity into the challenge.
Having a positive message on climate change might even make Yukoners easier to convince to pay their share of the more than $200-million bill shown in Yukon Energy’s charts.
Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. He is a Ma Murray award-winner for best columnist.