Nunavut utility pitches new $32.4M power plant for Arctic Bay

Federal energy fund would cover 75 per cent of the cost

This map shows the proposed location of Arctic Bay’s new $32.4-million power plant. (QEC image)

By Jim Bell

The Qulliq Energy Corp. has asked the Nunavut government for permission to build a new $32.4-million diesel-burning power plant in Arctic Bay to replace a 45-year-old structure that’s now too small, too unsafe, and incapable of meeting the community’s electrical energy needs.

The existing plant in Arctic Bay, built in 1974, is in poor condition and continues to deteriorate, the QEC said in its application.

Also, the maximum generating capacity of the existing plant falls short of meeting the community’s peak load by a factor of about 20 per cent.

And there’s not enough room to add new generator sets to the aging building, due to lack of space and the building’s poor overall condition.

The existing Arctic Bay plant is located on the shoreline, surrounded by other structures in the built-up area of the community. That means there’s not enough land available to expand that building.

“It is not technically feasible to expand capacity of the existing power plant due to lack of space and poor building infrastructure condition. This situation places the community at great risk of QEC not being able to supply safe, reliable power to the community,” the QEC application said.

The new plant would be built on the north side of the Nanisivik Highway, about 1.2 kilometres outside town, beside the tank farm.

It will use hospital-grade silencers and industrial scrubbers to reduce noise and air pollution, and include two 90,000-litre double-wall fuel tanks.

That would be an improvement on the existing plant’s single-wall fuel tank, which is not compliant with modern building codes.

QEC filed the application with Jeannie Ehaloak, the minister responsible for the Crown corporation, on Nov. 8.

Because the total cost of the project exceeds $5 million, the QEC must receive approval from the minister before going ahead with it.

But the QEC’s customers will be required to pay only about $8.8 million—25 per cent of the $32.4-million total.

That’s because 75 per cent of the cost will come out of a federal program called the Arctic Energy Fund, a $400-million pot of money first announced in the 2017 federal budget.

And the application says that if construction on the project starts in 2020, the new power plant could be brought into service during the 2022-23 fiscal year.

After that, it would meet the community’s estimated electrical power load for at least 40 years.

Arctic Bay, according to Statistics Canada, has a population of about 900 right now, which is expected to grow to 1,138 by 2036.

As for how QEC ratepayers will absorb the capital cost of building the new plant, that’s still up in the air.

The application says that under the QEC’s current community-based power rate system, power bills in Arctic Bay would rise by 28 per cent.

The current domestic power rate in the community is 87.99 cents per kilowatt-hour.

The cost of the new plant would add another 24.68 cents to that figure, the QEC said, pushing the unsubsidized domestic rate to a whopping $1.12 per kilowatt-hour.

However, if Nunavut were to adopt a uniform territorial rate system, the estimated average rate increase in Arctic Bay would be limited to only 0.38 cents per kilowatt-hour, an increase of only 0.4 per cent over the current domestic rate.

And in the future, the new plant would be capable of integrating renewable energy sources like wind turbines or solar panels, the QEC said.

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(10) Comments:

  1. Posted by Neighbours Complaining on

    “Hospital-grade silencers” for a plan that is located completely outside the town? Does the QEC anticipate a flurry of residential build-up surrounding the oil tank farm?

  2. Posted by The Old Trapper on

    And this is precisely the reason why Nunavut needs to consider consolidating some of the settlements.
    Economically it doesn’t make sense to spend $36,000 per person for a new power plant. And just about every community will need a new power plant in the next decade, except for the ones that have already been replaced.
    If the GN had the vision to consolidate communities then it might just have the money necessary for housing, education, senior centres, drug and alcohol treatment, etc.
    Now I don’t expect it to happen as anyone living in a community slated for consolidation would complain. Just another reason why Nunavut is not going to solve its problems without a major change in thinking, and funding.

    • Posted by Inuk on

      @The Old Trapper:

      Your thinking, in blunt force sounds very much like what us Inuit have experienced in recent history. Your attempt to consider a hypothetical backlash as “complaining” is frustrating at the core. Relocation is still very fresh in our minds and hearts.

      If the Government of Canada had the vision to not relocate our past communities for its own interests, it would not have to deal with the power we has as a territory today – the power to demand our very basic needs for

    • Posted by North Baffiner on

      Old trappers ought to stick only to what they know. I guess this means your whole trap line should never be given to anyone else, you know, consolidation and deletion of old trapping lines that no one uses anymore.
      Too simplistic, since every community has Inuit, who own lands within each of their roughly 7000 square miles of hunting territories, that with the exception of Resolute Bay and Grise Fiord, has histories stretching back to 1000AD. Isn’t that how revolutions start? Some dickhead bureaucrat makes a move to consolidate his spread out administrative area so they can work less or not have to do so much paperwork.
      Inuit have also had dogs since time immemorial, and in a dog team, even the runt or lowest dog has a role, place and standing among the dogs and the owner. Now, I wouldn’t dain to compare communities to animals, but after all they are living and if the entire communities decides to abandon an area, that would require some work. I imagine some emergency plans have that scenario, but only in emergencies.
      We don’t know what future technology may emerge, replacing diesel power plants. One idea would be to drill down 500 metres to reach the heat of the earth. There are some places where the crust has cracks, allowing it to be accessed closer to the top. This geothermal idea would cost more, but could be feasible.
      This though, is one of the water rights of Inuit under Article 20 …heh heh…who knows, it’s probably too expensive since it would require drilling several large wells near every community, but they would last as long as the infrastructure is capable of handling the steam. Too bad bureaucrats aren’t much good for thinking outside the government BOX.

    • Posted by Young Inuk Man on

      @The Old Trapper:

      Your thinking, in blunt force sounds very much like what us Inuit have experienced in recent history. Your attempt to consider our community’s hypothetical backlash to your idea, as “complaining”, is frustrating to the core. Relocation is still fresh in our minds and hearts.

      If the Government of Canada had the vision to not relocate our past communities for its own interests, it would not have to deal with the power we has as a territory today – the power to demand federal support for our rights and needs to education, housing, mental health support, etc.

      Today, the GC and GN are going to work together to solve the issues we face up here. It is not us Inuit, as a people of our territory, who are going to be moved around – again.

      It is you sir, who needs to adjust their thinking.

    • Posted by Close them down on

      I agree with you Old Trapper. There are too many hopeless and pointless communities in Nunavut that function as virtual prisons for their hapless inhabitants. Poor children born into these black holes have almost no opportunity for a decent life.

  3. Posted by Tony on

    Can someone explain why diesel rather than LNG? I really don’t have any answers.

    This is not a conversion but a new generation plant the questions that pop into mind are:
    – since there is significantly less particulate matter thrown into the air with LNG would there not be benefits to considering LNG?
    – what are the comparative costs: to construct; to maintain; to supply fuel?
    – what favours diesel over LNG?

    • Posted by Observer on

      Liquified natural gas requires refrigeration for storage. Yes, even in Nunavut; you need to cool tanks to -162 Celsius in order to store it, and the tanks have to be pressure tanks, as it’s stored at higher than atmospheric pressure. And you need more of it. LNG has an energy density significantly lower than diesel or gas: about 20 megajoules per litre versus around 35 for diesel. That means you’ll need about 50% more LNG to equal the same amount of energy.

      So you need 50% more tank space, and those tanks and the fuel handling systems are significantly more expensive because they need to cooled to very low temperatures, insulated, and capable of handling pressure.

      There is a way of passively cooling the tanks; you allow some of the LNG to boil off and release it, but that means you need even more storage space and fuel shipping for the LNG you’re just going to let out and not end up using.

  4. Posted by Almost got it right on

    Though Nunavut has community-based rates, QEC has never placed the entire burden of a new plant on a single community. The costs of all of QEC’s large capital projects are always spread across all rate payers.

    And yes, the posted residential rate in Arctic Bay is about 88 cents per kilowatt hour…but residential and small business customers across Nunavut are subsidized by the GN to half of the Iqaluit rate on their first 700 KW/hr of summer consumption and 1000 KW/hr of winter consumption….so the actual rate most users pay is a little more than 30 cents per KW/hr.

  5. Posted by Up north on

    So QEC has asked the government for permission to build a 32.5 million dollar power plant.
    Question: has QEC already completed a tender for this project? Or have they just put the numbers together?. If not already tendered then they have just let all contractors know what they are willing to pay. So where is the dollar for value here.
    A turn key power plant normally cost 1.5 million a Mega Watt. So if you are building a 3.0 Mega Watt plant it would cost 4.5 million. Ok for Nunavut with all shipping cost, etc, double the cost to 9 million make more sense.

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