RENEWABLE ENERGY PROJECTS IN NUNAVUT SLOWED BY FINANCIAL BARRIERS
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By Cori Marshall
Energy production in Nunavut is slightly different than what we have seen in the Yukon, and Northwest Territories. Energy is provided to all Nunavummiut by a territorial Crown Corporation, Qulliq Energy Corporation (QEC). The name of the company is rooted in Inuit culture; a Qulliq is an oil lamp that provides heat and light and was used across the north.
To gain a better understanding of energy production in Nunavut, we spoke with President and CEO of QEC Bruno Pereira.
Pereira explained that QEC "provides electricity to all of the communities in Nunavut, [and] we are responsible through various administrative and legislative processes to the Government of Nunavut."
"All of the [energy] is produced by diesel," Pereira said. QEC provides power to 25 communities in the Territory, and there are "power plants in each community."
QEC purchases the diesel fuel in bulk, and Pereira explained that "the price is based on last December’s rates, which works out to be about $0.30 per kWh." Even though the corporation buys large quantities of fuel and is involved in a Government of Nunavut purchasing contract "general costs for diesel tend to be significantly higher than what you might experience in some southern jurisdictions."
"You have to ship the diesel from the various ports to the various communities, so there is an inherent cost associated with transportation," Pereira said.
The QEC website contains a section dedicated to renewable energy production, specifically wind and solar. "We are just starting on that path," Pereira said, "we are about to deploy a net metering which will allow customers to opt-in, to install wind [turbines] and solar panels on their residences to lower their energy costs."
Pereira added that QEC "has done energy studies on the wind capacity throughout the territory and is looking into how to fund some renewable energy projects." He underlined that their "biggest challenge is financing, these projects are notably more expensive in the Arctic Region."
In response to these first steps toward a cleaner form of energy, QEC is seeing interest from the individual communities around Nunavut. "There is interest for various reasons," Pereira said, "one is it is more environmentally friendly."
Another reason why communities are showing interest is that they are "dependent on that shipment of diesel coming in every year, by going to renewable sources we can minimize the amount we need to import."
Pereira cautioned "there is enthusiasm, but there are a number of hurdles, the greatest of which is the cost of deploying the infrastructure while maintaining some of our older plants which we have to rebuild as well."
Cost of deploying the projects will vary depending on the community. Pereira explained that "it can be anywhere from $13 million to $60 million for reasonable penetration levels in the community." The real cost comes into focus when you consider that QEC provides electricity for 25 communities.
Pereira explained that the change "will provide long-term [economic] benefits, though initially, it will not reduce rates."
QEC is working on a strategy with the Nunavut government, Pereira said that "maybe our federal partners can help us move toward our objectives, which we have yet to set." QEC and Nunavut know what they would like to see in term of renewable energy capacity it comes down to "how much can we afford, and how quickly can we do it," Pereira underlined.
Communities in Nunavut, like those across Canada's north, are dependent on diesel fuels to run the generators to produce their necessary electricity. There is willingness and a desire to move away from this form of energy production. The primary barrier that is keeping Nunavummiut communities from making this change is a financial one.