On EDGE: Opinion
Lisa Simpson: Did you know that the Chinese use the same word for crisis as they do for opportunity?
Homer Simpson: Yes. Crisitunity!
The twin concerns of high energy prices and climate change amount to a crisitunity for the Government of the Northwest Territories. Residential power rates hit 58 cents per kilowatt hour in some communities, and even where they didn’t, there are people screaming about power rates, and the associated impact on the overall cost of living.
The GNWT’s decision to scuttle ambitious plans to connect the Snare and Taltson hydro grids, and then to the south, to either import or export cheap power as conditions dictated, would have been a straightforward, if financially risky, solution. With an estimated price tag of $1.2 billion, you’ll be hard-pressed to find anyone who thinks that isn’t too expensive. Even at the original estimate, something like $700 million, it’s doubtful this was a good idea. It was never clear how the NWT could produce enough hydro at a competitive price to be able to export it, though the prospect of importing juice from Saskatchewan, which has some of the lowest rates in the country, is enticing.
Freed from this potential millstone, Finance Minister Michael Miltenberger can do what many would argue he should have been doing all along: increasing capacity in Yellowknife and pursuing an aggressive program of renewable energy generation in the outlying communities. It’s also an area where the government’s stated goal of driving economic growth dovetails with widespread public complaints about the cost of living. Assuming the federal government agrees to increase the NWT’s debt cap (a decision is due soon), there will be money available to pursue this.
Until now, the Northwest Territories Power Corporation has been tinkering at the edges of this problem. It’s installed solar generation in Fort Simpson and Colville Lake, and Inuvik is now running on liquified natural gas (not renewable, but arguably cleaner than diesel). In its departments, the GNWT has been adopting some biomass and district heating.
The NWT still spends $25 million per year on diesel generation in the “thermal zone” (the communities that rely on diesel generation), a figure that doesn’t include the $20 million in extra costs created by low water levels in the Snare hydro system this summer. So the GNWT has a pretty compelling business case to jettison diesel.
The problem is that diesel is deeply entrenched in much of the North. Many of us still get our power from plants that are the legacy of the old federal Northern Canada Power Commission, built at a time when diesel was dirt cheap and tiny, ad hoc power plants were good enough. And given the lack of a comprehensive grid, NTPC views diesel a vital backup fuel for the foreseeable future, wrote Andrew Stewart, parent company NT Hydro’s director of business development, in an email. “In the long term, substantial amounts of storage could be utilized to store power when the wind or sun are not available, but this technology is evolving and very expensive.”
Here’s where things get encouraging. Writing for Bloomberg earlier this month, finance professor Noah Smith tells us the cost per kilowatt hour of solar and wind energy is just now becoming competitive with fossil-fuel-powered electricity, at least in some places. Not only that, the data Smith cites also show renewables aren’t just competitive with diesel, they blow it away in terms of cost. Diesel is, pound for pound, the most expensive way to produce electricity. Weledeh MLA Bob Bromley is only slightly exaggerating when he says NTPC is producing “the most expensive power in the world.”
Still, wind and solar as functional sources of power in the North are concepts that require proof. Wind hasn’t totally panned out as a great energy source here, and solar can be ruled out for at least three months of the year. “Basically,” Smith writes, “without energy storage, solar remains a marginal solution, defraying energy costs and saving us from any risk of a dark age, but not delivering us to a world of abundance.” But he notes that companies working on the problem are sprouting all over the place, and the cost of storage is beginning to fall rapidly, if not quite fast enough yet.
We’ll see what comes of the GNWT’s much-ballyhooed energy charrette next week. But there are already plenty of concepts for the government to push ahead: Stewart mentioned transmission lines to some diesel communities, and mini-hydro potential in Deline and Lutsel k’e. Biomass, which is finding utility-scale adoption in Europe, also gets a mention.
The GNWT would appear to have plenty of ideas to work with. We are rapidly approaching the point where renewables are a realistic alternative to fossil fuels, especially in smaller communities with modest power demand. A diesel-free power supply within a couple of decades is not strictly a pipe dream anymore. The potential is real, should the government choose to put some back into it.