The Yukon government has released a report saying a new transmission line to deliver surplus power between Whitehorse and Skagway could be economical, but only under very specific conditions.
The territory has a surplus of 30 gigawatt-hours of power in the summer months, equal to 7.5 per cent of the total power produced each year. That power is currently going to waste.
The Yukon and Alaska governments have been developing a plan to use the surplus power to provide electricity to docked cruise ships in Skagway, which could cut greenhouse gas emissions from the ships by up to 21,400 tonnes of carbon dioxide each year. Sales of the surplus energy could lower utility prices for Yukon ratepayers.
“As neighbours we have always been linked by trade and tourism, and this corridor is an opportunity for us to advance and continue our historical partnership,” said Energy Minister Scott Kent in a statement.
But the report also found that a link to the transmission line from the proposed West Creek hydro project near Dyea, Alaska would not be viable unless external funding sources covered 59 per cent of the costs.
Yukon Energy had hoped a link to West Creek might provide more electricity to the Yukon grid to overcome power shortfalls during the winter months.
Even without the link to West Creek, a new transmission line from Whitehorse to Skagway would make future hydro projects in southern Yukon more viable, said Shane Andre, director of the energy branch at the Department of Energy, Mines and Resources.
“There’s … a real opportunity to improve the economics of any potential new renewable projects along that corridor,” he said. He pointed specifically to the proposed Moon Lake hydro development in northern B.C.
Still, the report found the transmission line between Whitehorse and Skagway is only economical under particular circumstances.
The analysis assumed, for instance, that no new mines would be connected to the Yukon grid before 2030. “Connection of new mines could reduce surplus hydro supply and thereby reduce project viability,” according to the report.
And the biggest unknown is on the demand side. To sell surplus power to docked cruise ships, those ships have to be equipped to use shore-side power instead of just diesel.
The report estimates that the Yukon could only sell its full energy surplus if all cruise ships docking in Skagway used shore-side power. Anything less than that “would likely require external financial support.”
But it’s doubtful that all cruise ships will use shore-side power in the near term. Vancouver, Seattle, and Juneau are currently the only ports in the world offering shore-side power. Greg Wirtz, president of Cruise Lines International Association for Northwest and Canada, said 40 to 50 per cent of cruise ships docking in Vancouver and Seattle currently use that power.
That number has grown substantially in the last several years – Wirtz believes it was closer to 25 per cent in 2009 – but it will take time for every cruise ship to switch over. That’s because it costs about $1 million to retrofit each ship with an electrical hook-up.
Wirtz said it might not be realistic to think that cruise ships will use all the power Yukon has to sell.
“That’s a high threshold,” he said. “One would hope that there would be other uses for the line beyond just cruise ships.”
Andrew Hall, Yukon Energy’s president, sounded ambivalent about the project’s potential in an interview with the News.
“We haven’t made a decision whether we’re going to put this project on our active list,” he said. “The concerns are around proving out that business case with the cruise ships.”
But he did say the idea behind the project is sound. “I think at a very basic level this makes sense.”
The report also dismissed the possibility of building a fibre-optic cable alongside the transmission line. The Yukon government is working on plans to build a new fibre-optic cable between Whitehorse and Juneau to encourage competition with NorthwesTel. Currently, only one fibre-optic cable links Yukon to Outside.
But Andre said combining the fibre-optic cable and the transmission line would be more expensive than burying the fibre-optic cable separately. That’s partly because the poles for the transmission line would need to be closer together to support the fibre-optic cable.
“There’s no added value in combining the two,” Andre said. He said the two projects may proceed independently.
Andre said the next step is to talk with Skagway and the cruise companies to gauge their level of interest in the project.
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