Yukon Energy’s board of directors has cancelled the proposal to build a new 20-megawatt generating station powered by fossil fuels.
Board chair Leslie Cabott informed Yukon Energy Minister Ranj Pillai of the decision on Oct. 1 by letter.
Pillai told the Yukon legislature of the decision Tuesday.
In her letter to the minister, Cabott wrote:
“After considering the results of the technical, environmental and socio-economic research, and the public feedback received, the Yukon Energy Corporation Board of Directors has decided to look at ways to avoid building a single new 20 MW (megawatt) liquefied natural gas (LNG) or diesel facility.
“Our focus instead will be to look at options to add or replace capacity at our existing generation facilities as our fleet of diesel engines retire. In the interim, Yukon Energy will continue to rent diesel generators each winter to ensure an adequate supply of back-up power in case of an emergency.”
As part of its 20-year resource plan, Yukon Energy was hoping to have the new generating facility operational by early 2022, at an estimated cost of between $40 million and $70 million, depending on the solution chosen.
To provide for backup generation when demand peaks in the winter, the Crown corporation has been renting mobile diesel generators.
In 2017, it rented four, two-megawatt generators for the winter at a total cost of $700,000, not including the cost of fuel.
In 2018, it rented six units for a total generating capacity of 12 megawatts at a cost of $1.2 million. This winter, it is planning to rent nine, two-megawatt mobile units for a capacity of 18 megawatts at a cost of $2.2 million.
As of mid-morning today, 25 per cent of the electricity Yukon Energy was providing to the grid was being generated by natural gas.
Many comments received by Yukon Energy during its public consultation earlier this year regarding the proposal for a new 20-megawatt facility were opposed to the project.
Building such a facility would lock the Yukon into a future of dependency on fossil fuels producing greenhouse gas emissions while using up money that could otherwise be invested in renewable energy options, they said.
“The last thing the Yukon needs in a climate crisis is a discussion around new thermal (fossil fuel) capacity,” reads a summary of one of the questions in Yukon Energy’s public survey.
In reporting the board of directors’ decision to the house yesterday, Pillai emphasized how the government is currently developing a climate change, energy and green economy strategy to guide the Yukon over the next 10 years.
The strategy is being built in partnership with First Nations and municipalities with input from the territory’s youth, he said.
The minister noted the proposed 20-megawatt facility was central to meeting the growing demand for electricity in the Yukon. But it was also raising concerns among Yukoners, he told the legislature.
“At a time when we need to focus on the future and how to meet our energy needs in the face of climate change emergency, many Yukoners question the value of making capital investments in the burning of fossil fuels.”
Pillai told the house he was pleased to announce the board of directors had decided to cancel the project.
“Yukon Energy Corporation will focus instead on options to add or replace capacity to Yukon’s existing generation facilities as the diesel facilities reach end-of-life,” he said.
“In the interim, Yukon Energy will continue to rent diesel generators as necessary to ensure adequate backup power is available in the case of emergency in our territory.”
NDP Leader Kate White told the legislature the New Democrats support the decision to cancel the thermal facility.
“It is our hope that renting generators in the short term will allow Yukon Energy to take the steps necessary to establish renewable alternatives to fossil fuels,” she said.
Yukon Party Leader Stacey Hassard, on the other hand, wanted to know what the minister is planning to do now that the centrepiece of the 20-year resource plan has been cancelled.
The territory is growing and so is demand, given the new Whistle Bend subdivision and mining developments, he said.
“We want to know: what is the government’s plan to deal with power generation demands going forward?” Hassard asked.
“We need to have enough energy in place in case of an emergency, such as if one of our existing facilities experiences a failure.”
Hassard was also critical of the public consultation undertaken by Yukon Energy regarding the 20-megawatt facility, describing it as extremely short and largely concentrated in Whitehorse.
“We do not believe that such a short and limited consultation can be considered to be meaningful engagement,” he told the legislature.
“In fact, we have heard from many Yukoners who were not even aware the open houses were taking place until after they had concluded.”
Yukon Energy’s 20-year resource plan was updated in 2016. It sets out a number of projects to increase the corporation’s generating capacity by 44 megawatts or 33 per cent overall by 2025.
The new thermal plant accounted for almost half of the targeted increase in capacity.
Other projects identified in the resource plan include the third natural gas generator added to the LNG facility last year, with a generating capacity of 4.4 megawatts.
The plan also includes the new battery storage project, for which $25 million in federal and Yukon government funding was announced last month.
As well, the plan includes increasing water storage in the Southern Lakes to provide more renewable hydro generating capacity in the winter.
The proposal, however, has run into staunch opposition by residents of the Southern Lakes since it was first proposed in the early 2000s.
Yukon Energy has renewed the project proposal and is currently conducting public consultations.