Suppose you have a cabin that is just off the grid, and you’ve finally decided that electricity is actually pretty handy.
Should you pay the power company a few thousand bucks to run power poles down your driveway so you can buy electricity from them at 14 cents per kilowatt hour?
Or should you just buy a mini windmill or a generator with some gas and make your own power?
There’s not a right answer. It depends on how much power you need, the fee for the power poles, how much generators cost and whether you think power or gas prices will go up faster.
The Yukon has a similar decision to make. Southern Canada and the Lower 48 are cut off from the Yukon’s power grid by hundreds of kilometres of northern B.C. wilderness.
Should our government, or its publicly-owned power company, invest to build a link to the B.C. grid so we could buy or sell electricity?
It’s an idea that comes up every few years and has never (so far) made it off the drawing board. The Yukon government recently announced it is again considering the idea, particularly since B.C. will have more power to sell once the controversial Site C dam is completed.
The most recent study was in 2016, when Midgard Consulting looked at a variety of ideas. One was a 763-kilometre line from the Whitehorse grid to Iskut, B.C. Another was a 663-kilometre line from Aishihik to the Alaskan grid. Another study in 2011 also looked at the question.
The Midgard report confirmed the findings of the 2011 study and found that the cost of a grid link was “high relative to the transfer capacity.” They also said that the small size of our power needs “is likely inadequate to justify the capital cost” of a grid link.
Midgard estimated the cost of the B.C. link to be around $1.7 billion. Our friends at the Alaska Highway News in Fort St. John report that Site C power will likely cost 6.4-6.7 cents per kilowatt hour. Unless the Yukon government somehow convinced B.C. Hydro to give us a great deal, they would presumably add a profit margin before they sold it to us.
Nonetheless, Site C power could cost less per unit than generating it from liquefied natural gas here in the Yukon. Estimates for LNG range from 15 cents per kilowatt hour and up. However, we would have to buy a lot of power for the savings to add up to the $1.7 billion invested in the link.
It gets complicated pretty quickly. Maybe we could build more dams in the Yukon and eventually export power to B.C., which would help the business case. Or maybe if one of the huge mining projects like Casino goes forward, we can buy power cheap from B.C. and sell it at a higher price to the mine. Or the engineers might be able to sharpen their pencils and figure out a way to skinny down the link so it costs less than $1.7 billion.
Or perhaps Ottawa could pay for a big chunk of the $1.7 billion so it seems like a smaller investment to us, although if the feds had a few hundred million bucks to give us then we would have to ask ourselves if the grid link was our number one choice for what to spend it on.
It almost certainly doesn’t make sense if we are just using the link occasionally when it is cold or one of our power plants goes down. That would be like paying $10,000 to have power poles installed down your driveway but only using the power to charge your sat phone and flashlight.
Another complication is that since the link would be 763 kilometres long and would run through rough territory, we would always need enough power plants in the Yukon to keep us going if the link was interrupted. Imagine if our power company ran our electrical system the way the phone company runs our internet access. One backhoe in northern B.C. could put out the lights and the world wide web at the same time.
The result is that you need an expensive link and also expensive local power plants.
The other challenge is technological change. What if we invest $1.7 billion in a grid link, then find that solar panels and windmills keep getting cheaper?
It’s good for the Yukon government to investigate its options. Maybe there is a more creative way to think about the problem, or things have changed since the 2011 and 2016 studies.
But I hope they’ll do it quickly. The territorial budget is not that far away. We don’t want months of rehashing the 2011 and 2016 studies to slow down work on projects to generate more power locally. If that happens, we’ll end up with a new consulting report but with neither a generator nor new power poles down our driveway.
Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. He is a Ma Murray award-winner for best columnist.