Last week, the Government of the Northwest Territories hosted an Energy Charrette to brainstorm ways to tackle high electricity costs and promote renewable energy options.
The second charrette followed a first session in fall 2012. It also came on the heels of the recently announced GNWT $20-million subsidy to the NWT Power Corp. to shield consumers from an unexpected increase in electrical costs, as well as the abandonment of plans to connect the NWT power grids to the south.
I sat down with Premier Bob McLeod to discuss the charrette, the rising cost of electricity and what the GNWT is doing to wean the territory off diesel.
We’ve been talking energy this week, especially at the charrette. How do you feel about what was discussed during the planning session?
I thought it was a very fulsome, educational, informative discussion. I’m waiting for the outcomes report, but I found the presenters had a lot of really good information. There were a lot of people who were interested in participating in the charrette, and we couldn’t accommodate everybody, so we have endeavored that once we get the outcomes report, we would circulate it for another round of input. I would expect that by February we would be in a position to respond to the charrette.
Why is this discussion happening now?
We’ve always had our goal of reducing our reliance on fossil fuel. We’ve now come to the point in the road where the cost of alternative and renewable forms of energy have come down, specifically in solar. We know how much it costs to generate diesel energy. Every community is different, so every community would have to look at other forms of energy generation to reduce our reliance on fossil fuel.
What kind of investments in alternative energy is the GNWT looking to make in the short term?
In the short term, we already have an energy plan. Our plan was to spend over $30 million over three years. We could probably expand some of the conservation programs, efficiency programs; we could probably move pretty fast on those. We give rebates if you convert to energy efficient appliances, if you convert to biomass, those kinds of things, we assist people to buy more fuel-efficient heating systems and so on.
How about in the medium and longer term?
We’ve indicated that we’re prepared to make substantial investments. We’re waiting for the outcomes of the charrette, but probably in the millions. As the charrette noted, we’re not going to be able to get away from diesel generation, but there are renewable and alternative forms of energy that are becoming more affordable. So we’ll probably have to look at a combination of ways to generate electricity. We’ve been investing in all of these different areas, so we know it works, and we’d be looking at doing it on a much larger scale. I think probably we won’t get totally sustainable until we have better storage capacity. There is storage capability, but it’s still very expensive at this stage.
Will you be bringing in legislation to support a shift to renewables?
I would expect if we’re going to do any legislation, it would be in the area where you’re not allowed to sell these incandescent bulbs, or things that waste a lot of energy. I’ll wait to see what the outcome of the charrette is.
The government has subsidized the NWT Power Corp by $80 million over the last three years. You’ve called this unsustainable. At what point are you going stop subsidizing the power corp?
I think we’re at that point now. If we have a similar summer next year as this year, I don’t think we can drop another $20 million in there again.
We had our first energy charrette only two years ago. What makes you confident this one will be a success and we won’t see another one in two years time?
I’m not discounting the work of the first charrette. What came out of there is probably the best way to go. But we’ve discovered that it’s unaffordable. A large part of our problem is lack of economies of scale, and I think that joining the two transmission lines has become prohibitively expensive. We’re taking a different approach. We want to find ways to empower energy consumers, and in that way making our energy generation in communities more sustainable.
Why didn’t the government foresee the prohibitively expensive cost of the transmission before investing time and energy into the plan?
That’s not unusual. Every form of electricity generation – we’ve been looking at many hydro transmissions – almost every one is coming in double or triple estimation. If you’re laying poles, if you have start using helicopters to haul the poles, that would be hard to foresee. And if you use helicopters to move all the poles and equipment around, obviously your costs are going to be very substantial.
So the business plan didn’t take this into consideration?
Well your preliminary numbers, you don’t always have them exact right away. Once you go out and figure out how you’re going to get these poles there, how you’re going to put them in the ground, that’s when you get a better estimate of your costs.
It’s reported by CBC that the GNWT has spent $21 million in the last decade researching renewable energy and transmission lines. What have we seen as a result of that spending?
It wasn’t $21 million. It was $13 million. We’ve seen a number of business cases. We still have that information, and I expect at some point we will develop our hydro resources, at which time we’ll more than recoup the investment and benefit from it significantly.
What hydro developments are we still looking at?
The main one we’re looking at is the Taltson. We have a potential 11,000 megawatts, which is on par with James Bay. And I expect that at some point we’ll develop those resources.
But recently the plan to expand Taltson was halted. What needs to change for the expansion to go ahead?
We need to find a way to make it more affordable, and we need to change our approach to development. When the diamond mines were built, they brought their own power. In the future, if we reach similar scenarios we should probably factor in the need to develop our hydro capacity. If we had developed our hydro in conjunction with the development of those mines, we might have had hydro development right now.
Is the shift to renewables going to come mostly through hydro expansion?
No. As they said at the charrette, the 65,000 megawatts of power we consume is the most complex generation around, for a number of reasons, largely because of a lack of economies of scale. So there’s going to be no single solution. It’s going to be a combination of alternative and renewables, and we’ll still probably need diesel as a backup.
I understand the government’s been making strides in reducing its own energy consumption by shifting government buildings to wood pellets, using LED lighting etc. How are you motivating other organizations and residents to do this?
We’ve been expanding the Arctic Energy Alliance. We’re focusing a lot more on education, and providing incentives to people to convert. Historically, we’ve been getting complaints because people are saying only the upper-middle-class in centres like Yellowknife have been benefiting from it. But we’ve now expanded our reach. We have more Arctic Energy Alliance offices, so they can reach more people out in the Northwest Territories, and they can get to more communities.
In an NNSL story published on Friday, Minister Michael Miltenberger is quoted as suggesting the power corp should become a government department. What do you think power corp’s role should be in the future?
Minister Miltenberger wasn’t blaming the power corporation, he was saying everything is on the table. Most people see the NWT Power Corporation as a profit centered, money-grubbing company, when in fact that’s not the case. They’ve become more and more a vehicle of government to help deliver on our energy policy. So it’s a very legitimate question. If that’s the purpose of the power corporation, why do we need a power corporation? It might be better to have a power department, or have them become a division in the government.
Are you looking seriously at that possibility?
We’re looking at all possibilities.
What do you say to critics who say the power corp’s investment in diesel generation is holding back the NWT’s development of renewable alternatives – like the turning down of the geothermal project in Fort Liard, for example?
It’s not the Power Corp. The reality is, no matter what happens, we’re going to need diesel generation. And the geothermal in Fort Liard – I was involved in the project – it was totally uneconomical. So that’s why it didn’t go ahead. The company couldn’t raise the money because it was too expensive and like everything else, there were no economies of scale for the project to go ahead. As I said, the NWT Power Corporation is an instrument of government, we’re the only shareholder, so they’re going to do what we tell them to do.
You’ve spoken quite a lot about Liquefied Natural Gas. In your mind, does LNG play a significant role in a shift away from diesel?
In my mind it does. We have a pilot project in Inuvik right now where we’re hauling LNG all the way by truck from Delta B.C., and it’s still cheaper than diesel. We think that we can do the same in every community on the highway system that has diesel generation. It depends on what comes out of the charrette, but I think we’d be prepared to start right away. Here in Yellowknife, we’re pretty well maxed out on energy supply, and we could move very quickly to set up LNG generation here.
What do you make of the criticism that LNG is just as environmentally damaging as diesel?
We hear some people, even some of our own MLAs, saying LNG is dirtier than coal. But I find that hard to believe. And we all know that LNG greenhouse gas emissions are a lot less than diesel and a lot less than coal. With our experience in Inuvik, we think that it’s a way to go.
Is shifting to LNG-generated power one of the reasons you’ve been promoting LNG development up the Mackenzie Valley?
The ultimate irony is that in the Northwest Territories we have significant oil and gas potential but we don’t have the economies of scale to develop it, so we have to import all of our fuel, except for biomass or solar or wind. We haven’t found a feasible way to develop our own LNG, so we have to import it right now.