The president of Yukon Energy says the corporation has always known that Whitehorse’s new liquefied natural gas facility would not be used to restore power after short-term outages, and that it made this information public.
But this may come as news to many residents, who have consistently heard the utility justify the new gas turbines as a necessary source of backup power to replace Whitehorse’s aging diesel generators.
It turns out it’s not that simple. On July 10, just one day after Whitehorse’s new liquefied natural gas facility was up and running, the city suffered a power outage. To restore power, Yukon Energy’s remaining, diesel generators kicked in.
Just two days earlier, to announce the new plant’s opening, Hall said in a news release that the natural gas facility would be used “for emergency backup or for peaking power in the cold winter months.”
But Hall told the News today the utility had previously disclosed the fact that the natural gas generators would not be used for emergency restoration.
He points to transcripts from Yukon Utilities Board hearings held in February 2014, when Yukon Energy responded to a series of questions from the regulators about the capacity of the LNG facility.
“In terms of merit order, will the natural gas units be dispatched ahead of the Whitehorse diesel units? All other diesel units?” the utilities board asked in the document.
Yukon Energy responded that “in normal operating conditions the natural gas engines will be dispatched ahead of all diesel generation due to their lower fuel costs. In certain grid outage power restoration scenarios some diesels may be started ahead of the natural gas units depending on the location and cause of the outage and restoration plan.”
Hall acknowledged that Yukon Energy could have been clearer about that limitation in the months that followed. But he said he didn’t really think it mattered.
“We didn’t think it was a particularly material issue because these situations don’t happen that often.”
Hall said using diesel generators for restoration doesn’t change the economics of the project, because so little fuel is used during short-term outages. He said the LNG facility will be most important during droughts and peak hours, particularly in the winter when water flow is reduced and hydro power is insufficient.
“The business case really wasn’t driven by these restoration events,” he said.
Natural gas generators are not ideal for short-term emergencies because they can’t pick up load quickly, said Hall. When the city loses power, entire subdivisions need to be brought back online as fast as possible. Natural gas can’t do that as well as diesel.
The new LNG facility has two working generators, which have replaced two aging diesel generators that had reached end of life. The facility has room for a third natural gas generator, which could be running as early as 2017.
Hall said he thinks that third generator will be needed “at some point,” but said that will depend on population growth and economic activity.
Before the LNG facility was built, the Whitehorse diesel plant had seven functional generators. Hall said there are no plans to replace the remaining diesel generators within Yukon Energy’s 10-year plan.
He also said Whitehorse would likely need to keep some diesel generation available until LNG technology advances.
“You probably would keep a few diesels around,” he said. “It’s possible that in the future, they come out with an LNG engine that can pick up load quickly.”
But the project proposal submitted to the Yukon Environmental and Socio-economic Assessment Board in August 2013 states that all of the city’s diesel generators are scheduled to be retired by 2026.
“These retirement plans may also be advanced if Yukon Energy faces issues with spare parts, repairs or other considerations that shorten a unit’s effective life,” the report reads.
Rob Yeomans, a YESAB spokesperson, said whether or not the board was aware the LNG facility would not be used for restoration during short-term outages, the information may not have made much of a difference.
“It wouldn’t necessarily affect our assessment much,” he said. “We’d have to look at so many different things in the project proposal.”
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