​Cheap Oil Means That Nunavut Has an Extra $30 Million, But Will It Invest in Renewable Energy?

What would you do with an extra $30 million dollars? That's the question currently facing the Government of Nunavut.

The recent drop in oil price means that the Arctic territory is set to save up to $32 million in fuel costs. This offers a unique chance to invest in green energy argues George Hickes, Iqaluit-Tasiluk representative in Nunavut's Legislative Assembly.

"Very few people have actually brought up the topic of renewable energy, so I want to highlight the fact we have an opportunity now, with some of the potential savings and fuel resupply, to invest in alternative energy pilot programmes," Hickes explains.

"It gives us an opportunity to show ourselves, and the federal government, and the rest of the world, that we're serious about alternative energy solutions as well."

And so should they be. The territory is 100 percent reliant on diesel fuel for all of its electricity, importing roughly 45 million litres each year. With no grid infrastructure, each community is served by its own diesel-fired power plant, the majority of which are at, or near, the end of their lifecycle.

This is compared to the other northern territories, which are almost entirely powered by renewables. The Northwest Territories (NWT) produces about 80 percent of its electricity from hydroelectric dams, while Yukon sources 99.5 percent of its electricity from hydro and wind power.

"It's a challenge," says Hickes of greening Nunavut's energy supply. With 25 communities totalling almost 32,000 people spread out over an area the size of Western Europe, Nunavut is a "big landmass with a small population." It is Canada's largest, northernmost, and newest territory.

Understanding this context helps explain, in part, its lack of renewable energy infrastructure. On April 1, 1995 Nunavut was officially separated from NWT. Prior to that, when money was spent investing in renewables for the territory, it was directed towards the biggest populations—western parts of NWT such as Yellowknife, not the sparsely-populated eastern portion that is now Nunavut.

But 16 years later, not much has changed. Poor infrastructure and a low level of financing are the main challenges says Hickes, not to mention pretty serious competing interests such as food security, health centres, waste treatment and management, and a severe lack of housing.

"We have communities in Nunavut that are unable to meet the demands of growth, such as housing, due to being at maximum power capacity for the generation infrastructure available. Until such a time as Nunavut expands or replaces those power plants, no growth to meet demand is available," Hickes explains.

In the first year of Nunavut's separation, two small-scale renewables projects were launched. First, the Nunavut Power Corporation installed five wind turbines in various locations. But today, only one small turbine continues to operate in Rankin Inlet. The 50 kilowatt (kW) unit is connected to the local grid and helps save about 40,000 litres of diesel fuel each year.

The Nunavut Arctic College also installed a 60 panel 3.2 kW photovoltaic (PV) system on its south wall in 1995. The electricity produced there feeds into the local grid, generating roughly 2,000 kWh of electricity annually. This is enough energy to power the lights in one large classroom for almost 80 days straight. Though the aim was to prove solar could be a viable power source in harsh Arctic conditions with little sunlight during the winter months.

But more of these sorts of initiatives are needed, Hickes argues: "What I'm thinking is if we invest in things that are going to save us money in the long-run, or offset some of our fuel expenditures and greenhouse impact, it's a win-win."

"If we start off with some smaller projects in some of the outlying communities it would show that we're serious about it and, to me, it would help our government negotiate with the federal government [by showing] that we are taking steps and we need them to assist us in taking bigger steps."

So just what could Nunavut do with $32 million dollars?

Solar technology has become incredibly inexpensive these days. Since 2008, the price has dropped 80 percent. Today, the average cost of installing solar panels on a mid-sized home in Canada is between $30,000–$40,000 for about 30 panels (connecting off the grid is typically a bit higher). This produces roughly 8,350 kWh of energy a year, or 22 kWh per day, just below the average household use of about 30 kWh per day.

Based on these numbers, at least 800 solar arrays could be purchased for homes with Nunavut's fuel savings. While transport costs would also need to be factored in for delivering the infrastructure so far north, the potential is staggering.

Grant programmes are also viable options. For example, in 2001, a grant scheme in NWT saw off-grid homeowners install 36 renewable energy systems over a two-year period. This was the first incentive scheme for solar in the territory, one that gave 50 percent rebates for panels. Its success meant that similar alternative energy schemes have continued with a base funding of $300,000 per year.

Wind technology has also improved dramatically. Last October, Quebec developer Tugliq Energy commissioned a $23 million single-turbine project in Nunavik, located 800 kilometres above the treeline at the northernmost tip of the province.

The 3MW turbine is designed to withstand Arctic conditions and climate change; features include oversized components, an elevator, heated blades and a specially-designed steel base elevated a metre above ground on piles drilled into the earth to avoid problems should the permafrost thaw.

The turbine is expected to reduce diesel fuel consumption at Glencore's Raglan nickel-copper mine by 2.5 million litres a year.

Typical large wind turbines produce about 1,000kW (costing anywhere between $2,000–8,000 per kW) and can displace 17,800 gallons of diesel fuel per year. This would save almost $55,000 based on a utility rate of $3.10 per gallon of diesel fuel according to the Renewable Energy Alaska Project.

Alaska is often looked to for its success with wind turbines. Like Nunavut, rural Alaska is largely powered by diesel fuel but over the past few years it has seen rapid development of community-scale wind-diesel systems.

The Kodiak Electric Association (KEA) project gives a sense of what could be achieved. In 2009, it installed the state's first three 1.5MW turbines for a total USD $21.4 million. The wind farm doubled in size in 2012 to six turbines—these supply more than 18 percent of the community's electricity. Combined with hydroelectricity, KEA can shut off its diesel generators almost all year.

The options abound. But at the moment, there has been no commitment by Nunavut's government to use any of the anticipated fuel savings for alternative energy, says Hickes, who notes that the final amount saved could still fluctuate up or down.

Most of the focus has been towards building a large-scale hydro project in Iqaluit, which is responsible for almost a third of the territory's fuel use. But with a price tag of $450 million, this is a long, long way from completion.

Pilot projects are therefore needed as proof of concept. "We can't fund that [hydro project] ourselves, it's just not possible with our revenue," Hickes explains. "Until literally hundreds of millions of dollars are identified, it will not be realized. The opportunity now available with resupply savings to leverage further Federal investment is here and now."

"In the grand scheme of things, maybe our footprint isn't that large. But if we're to be defending our environment and our communities against climate change we have to show that we're participating in solutions," he concludes. "It's just time I think that we take some steps, we need to control our own fuel destiny."

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