Government plans for new hydro

When it comes to questions in the Yukon legislature, the territory's three political parties don't often agree on much. Except, it seems, the need for more hydropower.

When it comes to questions in the Yukon legislature, the territory’s three political parties don’t often agree on much.

Except, it seems, the need for more hydropower.

Last week the territorial cabinet directed the Yukon Development Corporation to start planning for a new hydro project in the territory.

As Energy Mines and Resources Minister Scott Kent explained, the corporation has 90 days to map out how it will do the planning.

“The direction we’ve given to the development corporation is to look at a project that is probably 10 to 15 years away, so it’s probably going to be a larger scale hydro project,” Kent said.

The territory is sorely in need of more power, and the demand is only expected to increase as many of the newer homes going up in the Yukon are heated with electric heat, Kent said.

“We support renewable energy, and we approve of long-term plans. We’re pleased that the Yukon Party has finally seen the importance of it,” said the NDP’s energy critic Jim Tredger, though he did question the government’s track record of consulting with First Nations.

The Liberals are also happy with the move, but wary about the Yukon Party’s ability to manage major capital projects, especially after the considerable problems that have emerged with plans to build a replacement of F.H. Collins school and to build new hospitals in Watson Lake and Dawson City.

“We’ve been calling for this since I got elected,” said interim Liberal Leader Sandy Silver.

“We 100 per cent support hydro expansion, and we 100 per cent support any type of renewable energy initiative that decreases our reliance on fossil fuels,” he said.

Kent wouldn’t speculate on how much the plans might cost, preferring to wait until the development corp. has submitted its initial work plan three months from now.

He said the government will cover the cost of the initial work plan, and will look for other funding resources to cover the rest of the research and design so that the territory’s ratepayers aren’t on the hook for it.

Kent also wouldn’t say what sites might be considered in the planning for new hydro, only that it will be substantial. In the meantime, the territory will still have to find other incremental ways to offset rising power demands.

“We’re going to have to do other things to meet the incremental demand as we move forward. Projects like West Creek (outside Skagway, Alaska) or other smaller scale hydro projects along that Alaska power corridor are options, depending on what Yukon Energy does within its 20 year plan,” Kent said.

That 20-year resource plan identifies a number of potential options ranging from relatively small projects on Moon Lake or the Tutshi River, which would yield around five megawatts and cost around $130 million, up to a $2.5 billion, 300-megawatt monster at Fraser Falls on the Stewart River.

But there are some challenges.

The boom-bust cycle of mining at the whim of the markets can make it difficult to predict exactly how much power the territory will need.

The territory’s isolated power grid also makes planning for power generation a finicky business. If the government doesn’t have enough energy cards in the deck, it could get caught by a sudden spike in demand and be forced to fall back on expensive diesel generation to make up the shortfall. But if the government overbuilds and ends up with a surplus of power in the grid, there is no one to sell that extra power to because our grid doesn’t connect anywhere outside the territory. That means the Yukon ratepayers end up paying for power they don’t need.

Earlier this fall Kent and Environment Minister Currie Dixon signed a deal with Alaska to study the feasibility of a power grid connection to Skagway. If it works, that would allow the Yukon to sell some of its excess power to the American port in the summer. It could also allow for a small-scale power station at West Creek, which would bolster the power portfolio.

But Skagway’s power demands peak in the summer when cruise ships are in port, and even then the community isn’t likely to buy enough power to offset serious overproduction in the Yukon.

The only likely answer to that is a grid connection to B.C. That would allow the Yukon the safety to build enough power to cover its highest demand peaks, and sell off its excess down south when the market slumps.

At an estimated cost of more than $1 billion, a B.C. connection is expensive, but that’s still something that interim Liberal Leader Sandy Silver wants to see more of a focus on.

“If you had private industry that wanted to look at building a wind farm or something like that, having a connection to B.C. would allow them the flexibility to do it, because they could sell their extra power to a larger market,” Silver said.

Contact Jesse Winter at