David Morrison is a party pooper.
Just two hours into the Opportunities North business love-in on Wednesday, the CEO of Yukon Energy had to spoil the giddiness over the territory’s good fortunes.
Yukon’s steady economic growth has largely depended on cheap hydroelectric power. And we’re about to run out.
“There is no surplus,” said Morrison. “We’ve eaten it all up.”
Expansions of the Mayo and Aishihik hydroelectric facilities will provide new capacity. But that will soon be gobbled up again, when Victoria Gold Corporation’s Eagle mine is expected to open in 2014.
And that’s just one mine. Several others may be on the way.
And it’s not just mines that are driving up demand for electricity. The territory’s growing population is putting further strain on the system.
When Whistle Bend is fully occupied, it’s expected to gobble up 10 megawatts – twice as much electricity as Capstone’s Minto Mine.
Burning diesel to meet this rising demand is expensive, not to mention dirty. But Yukon Energy’s options are limited.
Keeping more water in the lakes that feed Yukon’s hydroelectric facilities would help. But these measures are almost always unpopular among residents with affected waterfront properties.
Not long ago, Morrison ballyhooed wind power as unlikely to work in the territory. Now he sees it as the best bet to generate needed power in the near-term.
Yukon Energy’s current plan is to build a wind farm at Ferry Hill, near Stewart Crossing. These turbines are expected to generate up to 20 megawatts.
Of course, that’s only when the wind blows. A site study should be complete next summer. If the project looks feasible then, Yukon Energy could have the windmills built by 2014, said Morrison.
They’re expected to cost between $90 to $100 million. That means the territory would probably need to borrow money to build them.
Yukon Energy is also hoping to squeeze a couple megawatts from biogas – capturing methane from rotting vegetables – and incinerating garbage.
And the utility is encouraging customers to consume less. Morrison touted some success with this at Alexco’s Bellekeno mine.
Premier Darrell Pasloski has promised to start planning another big hydroelectric project, and to look at connecting Yukon’s grid to either British Columbia or Alaska.
But these are longer-term plans. They’re unlikely to result in anything being built in the next five years, and both would cost a tremendous amount of money.
Plugging into BC’s grid would cost upwards of $1.5 billion, said Morrison, who seems cool to the idea.
Better to look at more modest schemes, he said.
Skagway’s considering building a 25-megawatt hydroelectric plant at Dyea, to help power plugged-in cruise ships during the summer months.
“We could plug into that,” said Morrison.
Two game-changing technologies were touted at the conference, organized by the Yukon Chamber of Commerce, to help Yukon’s power pinch.
One is natural gas. There’s 6 trillion cubic feet of the stuff beneath Eagle Plains, on the Dempster Highway.
Northern Cross wants to pump it to the surface, chill it to minus 160 degrees Celsius so it condenses to liquid, and truck it to energy-hungry mines in the territory.
The Calgary-based company has partnered with a big Chinese gas producer to firm-up these resources, which were discovered in the 1960s. Drilling may start this winter.
The Vuntut Development Corporation, in partnership with other northern First Nations, is currently studying how to best deliver Eagle Plain’s gas to market.
Using trucks to deliver liquefied natural gas to customers probably makes sense at first, said David Thompson, Northern Cross’ CEO. Later, he envisions a pipeline being built alongside the territory’s highways.
Western Copper and Gold envisions a mine at its Casino project that would be powered with LNG. Yukon Energy is also interested in burning the gas to feed the grid, said Morrison.
Pasloski’s bullish about the potential of natural gas, too. He’s predicted Yukon-made LNG could hit the market in “the next five years.”
Murray Arsenault has another proposal. The general manager of the Champagne and Aishihik First Nations’ business arm, Dakwakada Development Corporation, sees big potential in wood pellets.
The amount of wood that is largely left to rot – either felled by beetles or through fire-prevention efforts – is enough to heat all the territory’s homes, 10 times over, he said.
It’s true much of this wood isn’t to be found near a road. But at least 10 per cent is, which is enough to do the job.
In April, Dakwakada signed a deal with Yukon Energy that sets out the terms of a potential partnership.
They’ve also signed a memorandum of understanding with the Village of Haines Junction, to assess the potential of building a biomass plant for electrical generation and a district heating system. The plant would generate three to five megawatts.
The company also wants to sell wood pellets to residential customers.
In British Columbia, pellets are manufactured from sawdust and woodchips generated by sawmills. Dakwakada’s business model is unique, in that it would be chipping whole trees.
BC’s wood pellets are largely shipped to Europe, where it’s not uncommon for homes to be heated by efficient, automatically-fed, pellet-burning stoves.
Wood pellets have yet to take off in North America. But Arsenault hopes to win Yukoners over.
But, for the business to make sense, the corporation would need a big institutional customer to buy pellets, until enough residents are persuaded to install pellet-burning stoves in their homes, at a cost of $4,000 to $5,000.
Next year, the corporation plans to assess its fuel stock. The studies on hand are about five years old.
Contact John Thompson at