Nunatsiaq News
NEWS: Nunavut February 24, 2018 - 12:00 pm

Nunavut spends $60M annually to subsidize diesel

WWF-Canada says money would be better spent on renewables

This three-megawatt wind turbine helps power Nunavik's Raglan nickel mine. WWF-Canada says if Nunavut built more renewable energy projects, it wouldn't have to spend so much money subsidizing the cost of burning dirty diesel fuel. (FILE PHOTO)
This three-megawatt wind turbine helps power Nunavik's Raglan nickel mine. WWF-Canada says if Nunavut built more renewable energy projects, it wouldn't have to spend so much money subsidizing the cost of burning dirty diesel fuel. (FILE PHOTO)

The Government of Nunavut spends on average $60.5 million annually on subsidizing diesel fuel, according to a recent report released by the World Wildlife Fund-Canada.

Paul Crowley, the organization’s vice president of Arctic conservation and a longtime resident of Iqaluit, acknowledges a good chunk of this money goes towards offsetting the electrical bills of low-income public housing tenants.

But he said that the territory would ultimately save money by building wind and solar installations to help power its communities—and would significantly reduce its carbon emissions in the process.

“The investment will save money in the long run,” he said. “If you can bring down that $60 million per year on average in subsidies to $40 million, you’ve got $20 million to work with every year. And that allows you to invest in the other things that we need.”

An earlier report prepared for WWF-Canada by the Waterloo Institute for Sustainable Energy makes a business case for switching five Nunavut communities over to renewables, using hybrid systems that would, depending on the community, use some combination of wind turbines, solar panels and storage batteries, with a diesel generator offering backup power.

Such systems have been used with success for nearly 20 years in some remote communities in Alaska, said Crowley. “There’s a well-worn path to getting it right,” he said.

Another success story for northern renewable energy can be found in northern Quebec, where a wind turbine helps power Nunavik’s Raglan nickel mine.

“It’s run in winds up to 140 km/hr, in temperatures down to -40 C,” said Crowley. “That kind of reliability—you can’t get much better than that.”

Still, the upfront costs to build the proposed diesel-hybrid systems aren’t cheap.

“The estimates we have are between $10-15 million per megawatt. A typical project in a community would be one to three megawatts, so you’d be looking at $30-50 million projects, typically,” said Crowley. Iqaluit, which consumes nine megawatts, is “potentially different because it’s so much larger.”

Baker Lake and Sanikiluaq stood out in Waterloo’s report as the best candidates for renewable-energy pilot projects. It’s estimated that these communities could reduce carbon emissions by 74 per cent, by relying on renewable energy much of the time.

Baker Lake’s preferred setup would use a wind turbine, backup battery and diesel generator, while Sanikiluaq would also have solar panels thrown into the mix. Over 20 years, it’s reckoned that Baker Lake would ultimately save $13.4 million and Sanikiluaq would save $10.3 million, compared to carrying on exclusively burning diesel to produce power.

Iqaluit did not fare so well. The report suggests a hybrid system for Nunavut’s capital, using a combination of wind, solar and batteries, would ultimately save $29.7 million over the course of 20 years.

But upfront capital costs would be considerably higher than elsewhere, and Iqaluit would still depend a lot on burning diesel, curtailing the drop in greenhouse gas emissions to 26 per cent.

Others are also studying the viability of clean energy for Iqaluit. Qikiqtani Inuit Association’s business arm is halfway through a two-year feasibility study for wind power. Under their proposal, three turbines with backup batteries could displace one-quarter of the city’s diesel consumption.

Last year the Nunavut government scrapped plans to further examine hydroelectric power for Iqaluit, after concluding it could never afford to build the two proposed dams. Initial estimates put the project’s cost at $255 million, but later grew to $500 million.

It’s not unusual for big hydro plans to balloon in cost, said Crowley, pointing to Newfoundland and Labrador’s Muskrat Falls project. He said that’s one reason why WWF-Canada remains focused on solar and wind technologies, which continue to drop in cost as they find more widespread adoption.

Crowley concedes that Nunavut faces many competing priorities when it comes to spending scarce public funds. But he envisions Inuit development corporations becoming partners for these renewable energy projects to help shoulder the costs.

And if the territory wanted to pursue renewable energy, it would be a good candidate to receive federal funds earmarked for this purpose, he said.

“It’s very important that Nunavut work closely with the federal government to ensure there’s an equitable share of the monies that have been set aside.”

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(22) Comments:

#1. Posted by Steve L on February 24, 2018

We all know the wind blows and blows and .... But!
Solar is nice when the lights are on which in some communities it is dark a significant part of the year.  Conversely y’all get endless sunshine for months in the summer.  Unfortunately batteries to last to winter don’t exist, yet. Here in the flatlands many of the windfarms are commercial and sell their product.  I doubt a single generator would have a feasible return on investment.  I remember Frobisher’s failed experiment with a wind generator.  Let WWF shoulder the cost, they have fundraising clout.  Open the wallet, don’t just sit back and pontificate.

#2. Posted by Andrew Hammond on February 24, 2018

Any excess electricity could be used to manufacture hydrogen which could be stored indefinitely.

#3. Posted by Professor on February 24, 2018

Hydrogen has a nasty habit of slowly flowing through walls, due to the small size of its molecules.

#4. Posted by You lost me at Paul Crowley on February 25, 2018

The report, like all reports, selects and presents the information it wants and needs.

Wanting to reduce petroleum-based energy is great. But…

The start up costs are massive. And while the report mentions that there is no territory-wide grid, it fails to link this to solutions.

#5. Posted by wwf- on February 25, 2018

saw your nice pic of the polar bear in the airport.  Nice and photoshopped white next to the oil rig pic.  you throw too much propoganda.  we know what it is like up here.  You guys find a place to rent (if u can) and set up wind and solar as your main source then write this article again, lol. 

I am all about renewables and we will get there in our own time.  Dont want wwf around either way

#6. Posted by Putuguk on February 25, 2018

$46M of the $60.5 GN is supposedly using to subsidize dirty oil is for subsidizde electricity for public housing.

The GN spends this money because socially dependent people cannot afford the full economic cost of power.

Whether that power comes from Wind, Solar, Nuclear, or hooking up to the Star Trek Enterprise dilithium reactor, it has no effect on affordability.

Any business case for alternative energy is invariably built around matching the long term cost of diesel generated power, or being cost neutral.

Often the overall cost is greater, which would mean more subsidy being required rather than less.

What would eliminate subsidies for any kind of power is economic development on the scale that will allow users to afford it’s full economic cost.

#7. Posted by Devil's Accountant on February 26, 2018

@#6 What you’re not saying, but you’ve more or less already made the case for, is that a lot of this problem could be solved by exposing the “socially dependent” people to a greater proportion of the cost. They’re driving those costs, let them find the efficiencies. 

You probably balked at coming out and saying it. WWF won’t say it either, and the GN almost certainly won’t. But come Carbon Tax time it might be worth thinking about.

That could make the fiscal room to do a few major investments in renewable energy.

#8. Posted by working stiff on February 26, 2018

If , the goverment starts charging Carbon Tax, im going on welfare

#9. Posted by Introvert Power on February 26, 2018

#7 I don’t read any of that into Putuguk’s comment.

The real question is, why do you?

#8 Oh please, don’t do that… though I am sure this statement on your part will have the government re-thinking the entire scheme. No doubt!

#10. Posted by Sam on February 26, 2018

#6 you nailed it,#7 Dreamer

#11. Posted by Seal Oil on February 26, 2018

time to renew the seal oil industry and dust off my kudliq.

6 and 7 true, and same goes for every part of Nunavut, we’re too much on welfare and subsidies it brings down every service we have, health, education, policing, recreation, muni services, food, homes, local staffing and turnover everything. Getting an economy going has been the no. 1 problem for decades.

back to tiny towns not viable

#12. Posted by empty on February 26, 2018

We are a small population with huge demands. Burning diesel is the only option right now to keep our folks safe. Paul Crowley is referencing unrealistic projects in Raglan and their deep pockets. Nukes is the way to go and would be sustainable bucks.

#13. Posted by Jim MacDonald on February 26, 2018

It’s rah-rah when Federal Gov subsidies pay for wind turbines and installation. 

Until after the wind turbine life span of 12 to 20 years and they must be totally replaced. If subsidies have dried up, how is the Hamlet going to afford M&R, plus spending millions replacing wind turbines, even if charging for little power produced and with an “environmental power tax” added on.

Will this force Nunavut Gov to finance wind turbines to keep them churning? Does this mean base-load diesel generators will become even more financially neglected, to the point unable to keep up to base load. Resulting in brown and black outs in deep of winter/summer as Germany is today.

WWF is hush on the massive bird kill wind turbines do. Interesting to know the number of bird kills with the WWF/Arviat up coming wind turbines. And what affect the turbines will have on migration of polar bears, caribou, wildlife.

In the south, it’s found even the earth worms vanish from farm land with wind turbines.

#14. Posted by Nuke 'Em on February 26, 2018

#12, I agree with you - nuclear energy is the way to go…cheaper and cleaner.  We just need 1 power plant for the whole territory.  Let’s do this!!

#15. Posted by Nuclear is not an option on February 26, 2018

I can’t believe there’s a couple folks on here arguing for nuclear.  I would agree it’s the best way to go for the south, where there is huge consumption and energy grids are tied through all cities/towns, but that’s not the case here.

Poster “empty” references deep pockets when talking about Raglan’s wind turbine, but they’re currently refurbishing (not building, refurbishing) Darlington Nuclear’s 4 reactors at a cost of $13 Billion.  You’d need at least 2 reactors here, because they each have to be shut down annually for maintenance, and then you’d have the cost of connecting all 25 Nunavut communities?

Even at WWF’s high range of $50 million per community, that would be $1.25 Billion for the territory.  As opposed to likely $20+ Billion for nuclear?

#16. Posted by Small Modular Reactor on February 26, 2018

#14 I agree with the nuclear option, but is a territory wide grid possible, or feasible? I don’t know…

In my opinion small modular reactors are the answer.

Check it out:

#17. Posted by Seriously? on February 27, 2018

You can’t build one nuclear power plant for all of Nunavut.  You can’t run a power line from Iqaluit to Cambridge Bay.

#18. Posted by IceClass on February 27, 2018

#15 You need to do your research on new reactor designs.
QEC is.

#19. Posted by The Petroleum Crew on February 27, 2018

Ahh no, the GN spends 60 million a year on electricity and housing subsidies. The price you and I pay at the pump, or in our home tanks, is the true cost of importing and supplying that fuel in Nunavut. WWF, you’re not helping the situation by spreading misinformation.

#20. Posted by Abraham Tagalik on February 28, 2018

I guess when you look at the big picture we are as crude as they get when it comes to generating power. Things don’t look to change very much anytime soon. There are options and as some of you suggest a greater cost to change than to steer on the same old course. I did read that the canadian north is falling behind other northerners like scandanavia maybe this is one big picture item the feds can take on. Federal intervention is the only way big picture items can be done. build a road. dam a river. build a grid. let’s move on.

#21. Posted by Observer on February 28, 2018

“WWF, you’re not helping the situation by spreading misinformation.”

WWF misinforming people? I’m shocked. And appalled.

#22. Posted by up here on March 02, 2018

right 21.  their big signs in the southern airports with a white photoshopped polar bear next to a pic of an oil rig, they are all about propoganda and i dont trust anything that org has to say.

let one of them come up here with all the tech they wish to bring and see how they fare without desil year-round.  that i would like to see!

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