Yukon Energy plans hydro upgrades, new diesel plant

Solar power, geothermal energy and pumped storage are not part of Yukon Energy’s proposed plan to supply the territory’s electricity for the next 20 years.

Solar power, geothermal energy and pumped storage are not part of Yukon Energy’s proposed plan to supply the territory’s electricity for the next 20 years.

Instead, the utility aims to upgrade its hydro facilities, invest in battery storage and build a new diesel plant at the Takhini substation north of Whitehorse.

Yukon Energy presented its action plan at a public meeting in Whitehorse Jan. 30. The plan is the culmination of 16 months of analysis.

According to that analysis, the Yukon already has an electricity gap. The utility is producing enough energy overall. But it isn’t necessarily able to cover periods of peak demand, particularly if facilities like the Aishihik hydro plant go down, which happened two weeks ago.

When that happened, Yukon Energy president Andrew Hall explained, the utility was running “pretty much everything we had” to keep the lights on.

“If it had been colder, it would have been a pretty ugly situation,” he said.

The plan includes three pathways to fill the energy gap, based on different levels of mining activity in the coming years. All three scenarios are the same until 2022.

They include energy conservation measures — like existing rebates on LED lights and block heater timers — the addition of a third generator at the LNG plant in Whitehorse, battery storage to supply extra electricity at peak times and the construction of a new diesel plant.

Hall said the diesel plant would rarely be used. “It’s your insurance policy against Aishihik going down.”

The plan also includes upgrades to hydro facilities and the reconstruction of the original Mayo hydro plant, which dates back to the 1950s.

In October 2015, when Yukon Energy announced the review of its 20-year resource plan, it said that grid-scale wind and solar projects and pumped storage would be considered.

But in the end, pumped storage and solar didn’t make the cut, while wind power is only proposed as part of the high-industrial scenario, starting in 2022, when four hard-rock mines are supposed to be operating simultaneously. Small hydro projects would also be part of the mix if the territory’s mining industry picks up.

“It essentially came down to cost,” Yukon Energy spokesperson Janet Patterson told the News.

Price tags range from $207 million for the scenario with only one operating mine to $458 million for the scenario that has four.

All three would produce an electricity mix that is more than 90 per cent renewable.

Yukon Energy also analyzed the cost of meeting the territory’s needs solely with renewables. It found that would cost $785 million for an electricity mix that is 99.4 per cent renewable, compared to a mix that is 98.1 per cent renewable under the proposed plan.

But the plan did not get a warm reception from the 50 people present Monday evening. Some wondered why Yukon Energy isn’t pursuing the home heating market more aggressively, to get more people off oil. Others thought it might be possible to close the electricity gap using some combination of wind, solar and battery storage, instead of more gas and diesel.

Shane Wolffe said he doesn’t think Yukon Energy’s plan recognizes that renewable energy is getting cheaper.

“That scenario’s going to change rapidly in the next five years,” he said. “(The price) is going to keep dropping.”

Yukon Energy plans to release a draft plan in February, after a series of public meetings this week. The public will then have another month to submit additional feedback before the final plan is completed.

Hall said the utility is also working with the Yukon government to secure financing for the plan. The Yukon currently has a borrowing limit of $400 million, and already holds $202 million in debt.

“That’s a political issue, whether the Yukon needs to increase its debt cap,” Hall said. “But I can tell you that the investment of $300 million would require an increase to the debt cap.”

At the meeting, a few people questioned why ratepayers should bear the cost of upgrading energy infrastructure to support new mines in the territory.

Hall claims the upgrades between now and 2022 are needed whether or not new mines come on line. But he also told the crowd that Yukon Energy has an obligation to provide the infrastructure to allow mines to connect to the grid in most cases, because it has a monopoly.

That means the utility may have to make some upgrades very soon.

Victoria Gold Corp. announced last week that it plans to pour gold at its Eagle Gold project in 2018. But Yukon Energy is still waiting on federal funding to upgrade the Stewart-Keno transmission line, which Victoria Gold plans to connect to.

Hall said he’s not sure Yukon Energy can get enough power to the mine on the existing transmission line. If the utility can get financing for the project in the first half of this year, he said, it might be able to finish the upgrade in time to get Victoria Gold up and running by the end of 2018. But that’s not a guarantee.

Contact Maura Forrest at maura.forrest@yukon-news.com

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