Roughly $60 million has been earmarked for two energy projects: an energy storage system and replacement of a portion of the Keno-Stewart transmission line.
Ottawa is providing more than $39.2 million in total, with up to $16.5 million going to the battery project, which is to store excess hydro power during off-peak hours while reducing the reliance on diesel fuel.
“These two projects are critical to Yukon Energy’s ability to build a sustainable, reliable and affordable electricity system that Yukoners need today and the robust energy system that the territory needs to continue its growth in the future,” said Andrew Hall, president and CEO of Yukon Energy at the announcement Sept. 5.
Thirty-one kilometres of the transmission line is being eyed for replacement, between Mayo and McQuesten. It’s being called the “first phase” of work with more to likely follow eventually, Hall said.
The federal government is providing more than $22.7 million to the project; Yukon Energy is contributing $7.8 million; the Yukon government is providing $3.4 million.
The new line will have a higher capacity, Hall said – voltage will be doubled.
“This line is more than 65 years old and has reached end of life,” he said. “We’ve had consultants tell us it’s the worst line they’ve ever seen.”
The project is shovel ready, he said, having been signed off by the Yukon Environmental and Socio-economic Assessment Board.
It will be completed in 2020.
Hall said Victoria Gold’s Eagle mine, which is slated to start pouring gold on Sept. 17, will benefit from the project, along with Keno and Mayo residents.
John McConnell, CEO of Victoria Gold, said, “The current line meets our needs, quite comfortably.”
Asked how the new line will help operations then, he said, “It’s not, really. It’s just that that line is worn out and if it fell down tomorrow, we’d have a problem, but increasing the capacity is not for Victoria (Gold), it’s for other industrial developments in the future.”
The new transmission line raises a lot of questions, said Scott Kent, the Yukon Party’s energy critic.
He said it’s a positive for the territory (the Yukon Party pushed for the same thing when it was in power.) But there are issues that need to be clarified, namely whether taxpayers will see their power bills increase now that Yukon Energy is covering a fair amount of the cost and, if so, by how much.
“Is there a utility board hearing that’s required? We need some more clarity from the Liberals on those outstanding questions,” he said.
Yukon Energy’s communications manager said it’s unclear what the impact to ratepayers would be at this time.
“Like all investments we make in Yukon’s electricity system,” said Stephanie Cunha, “we will make an application to the Yukon Utilities Board to include these costs in customer rates when the projects are complete. The YUB (Yukon Utilities Board) will review those costs at that time.
“One thing to note is that as the major user of the new Mayo to McQuesten line, Victoria Gold will pay for the majority of our $7.8 million investment in that line. Right now, according to our Purchase Power Agreement with Victoria Gold, the mine will pay 85 per cent of the fixed costs of the line through a fixed charge.”
The eight-megawatt battery storage unit will be capable of reducing 20,000 tonnes of greenhouse gas emissions, Bagnell said.
Hall said it will be the largest device of its ilk in the North, maybe the largest in the country.
“It will serve as flexible and dependable supply of electricity for all Yukoners connected to the grid when demands are high or during emergency,” he said. “It will also help us to prevent outages from happening or responding to outages once they occur.”
Yukon Energy is contributing $8.5 million towards the project.
It will go in the Whitehorse area, though no specific location has been settled on yet.
Contact Julien Gignac at julien.gignac@yukon-news.com