Energy Politics

Distinct and changing: a portrait of energy in the North

With average energy costs exceeding 30 cents per kilowatt hour in both Nunavut and the Northwest Territories – more than twice the cost compared to the rest of the country – the National Energy Board’s new report highlights the distinct challenges of the North, while acknowledging that change is afoot.

Across the country, varying costs, access, and infrastructure result in a blend of energy sources used in different regions, according to Canada’s Energy Future 2016: Energy Supply and Demand Projections to 2040. With strong hydroelectric supplies, electricity largely fulfils the needs of Quebec, Manitoba, and B.C., while in the Maritimes, oil and biomass are used in concert with electricity. Natural gas is relied on heavily in the Prairies, as well as Ontario, which also uses a mix of electricity, biomass, and oil.

With limited access to markets and local resources, the territories see a much heavier reliance on refined petroleum products (RPPs) – to the tune of 69 per cent compared to 31 per cent in the rest of the country, according to 2013 data reported by the NEB.

Whereas Yukon – with an average energy cost of around 15 cents per kilowatt hour – is connected to the rest of the country through various highway routes, limited road access in the Northwest Territories and the lack thereof in Nunavut increase the cost to truck or barge in RPPs.

The game-changers

Different options are certainly being explored in both regions and could heavily impact the North’s energy future.

  • Biomass: The NWT in particular has been eyeing biomass as a strong alternative to heating fuels. Since 2006, installation of wood pellet boilers has increased by 35 per cent, and local resources for wood pellets from forest fire debris add to its appeal.
  • Hydro: The report notes that the vulnerability of hydroelectricity to weather conditions is a challenge – something the NWT experienced with low water levels at its Snare River dam over the past two years. A hydro project has been pitched for Iqaluit, and there was some discussion of making use of tidal energy technology, but both were seemingly quashed in May 2015 comments by Keith Peterson, Nunavut’s minister responsible for the territory’s energy corporation.
  • Wind and Solar: The Aurora Research Institute is currently looking at the viability of wind production outside of Yellowknife – part of a GNWT study of alternative energy production potential in the area – and solar projects have seen success during the territory’s sunnier months. The Colville Lake Solar Project is now online, using a solar-diesel-battery hybrid that will reduce the community’s reliance on diesel during daylight hours. The development of lower cost batteries and energy storage could see more widespread usage of the technology.
  • LNG: Another route taken – though currently reliant on road access – is Liquefied Natural Gas (LNG). The Northwest Territories Power Corp. has been trucking LNG from B.C. into Inuvik since 2013 and studying the feasibility of this in other areas, even setting aside $200,000 in its 2015 budget to look into the potential for LNG usage in communities, such as Yellowknife, that are accessible by road. The lower-cost option could be even more opportune when liquefaction plant projects in northeast B.C. and Alberta come online. B.C. seems more than willing to sell off what’s been positioned by its government as the key to economic prosperity, and the throne speech given on Feb. 9 by B.C. Lieutenant Governor Judith Guichon affirmed that LNG revenue is the basket in which the province has placed nearly all of its eggs. That being said, its focus has been the overseas market: as of last year, 23 long-term LNG export licenses were approved by the NEB, amounting to a total volume that exceeds the amount currently being traded globally.

Fluctuating demand

As well as alternative energy options changing the picture in the North, the report notes that demand in the region is also in flux.

While the energy outlook for the provinces is relatively stable, the report suggests that in the territories, this is much more prone to change due to economic reliance on the volatile mining industry.

This is well illustrated by the recent closures of both North American Tungsten’s Cantung Mine near the Yukon-NWT border and De Beers’ Snap Lake Diamond Mine, northeast of Yellowknife. On the other hand, in July, the first load of iron ore from Baffinland’s Mary River Mine south of Pond Inlet, Nunavut was shipped to Europe.

Both closures and ramping up of operations heavily affect energy demand in the sparsely populated territories.

The future

Electricity demand across the country is seen to be met with natural gas and renewables, with a decline in coal – particularly in the Prairie provinces where the product is abundant – as well as oil and uranium.

Hydroelectricity remains a significant contributor at more than 50 per cent nationally, though dropping slightly in the projection. Renewables outside of hydro, including solar, wind, and biomass, are expected to jump from nine to 16 per cent.

If realized in the North, this jump can be seen as good news, both for minimizing the environmental footprint left by the territories’ carbon-heavy tread, and for bringing the region within closer range of the rest of the country when it comes to their energy bills.◉

Photo credit: istockphoto/antikainen

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