Friday, March 4, 2011

East Arm Power Lines Stopped For Now

By:  Tom

A hydroelectric project on the Taltson River that would have involved running power lines through the proposed site of the Thaydene Nene National Park on the East Arm of Great Slave Lake has been put on hold.
Taltson River

The project was being pursued by Deze Energy Corporation.  Deze is a joint venture comprised of business ventures of the Akaitcho First Nation and Métis Nation, respectively, and NTEC03, a wholly owned subsidiary of Northwest Territories Hydro Corporation, a crown corporation owned by the Government of the Northwest Territories.

According to news reports the goal of the project was to generate more electricity from an existing hydroelectric plant on the Taltson and ship that power on power lines along the East Arm of Great Slave Lake to diamond mines east of Yellowknife and north of Great Slave Lake.  Apparently, the diamond mines currently rely on diesel fuel for power and this has high environmental costs.

The plan to run power lines through the East Arm area along the Lockhart River provoked local opposition from the Lutselk'e Dene First Nation, which considers the Lockhart and the surrounding area sacred.
Taltson River Dam

Some have urged that the power lines go along the west side of Great Slave Lake, but proponents of the project say that such a route is infeasible.  For now, at least, the project is on hold because the diamond mines were unwilling to enter into electricity supply contracts that would make the project financially feasible.
Power Lines and Great Slave Lake

There are no easy answers here.  The use of diesel fuel at the diamond mines no doubt imposes a huge environmental price and is a long-term drag on economic development.  Deze Energy makes that case as follows:

Hydroelectricity is the key to the economic future of the Northwest Territories. We have mineral and natural resources that can be developed for a very prosperous future, but our reliance on diesel power is holding us back. Each time the cost of oil increases, it is less likely that our resources can be developed economically without an alternative. Hydro projects provide stable benefits for up to 100 years, and are not subject to fluctuations in fuel prices because they rely on the flow of water, very much in plentiful supply in the Northwest Territories.

Yet, the power lines through the backyard and sacred areas of the local tribe has its own cost, to say nothing of how those lines would affect the development of Thaydene Nene as a national park.  The Lockhart River reportedly has special significance to the Lutselk'e Dene tribe and is a place where the tribe gathers each summer.  Think of power lines through the U.S. Capitol or the National Cathedral grounds. 

I'm glad that Sarah and I will be there before any power lines cut through the East Arm area.  Yet, our good views and sense that we are in the wilderness will be tempered by an understanding that the region's reliance on diesel fuel, which is what preserves those views for now, comes at a heavy financial and environmental price.

Update.  This article from the Slave River Journal provides some additional background:

• Tue, Mar 08, 2011

The brakes have been slammed on the Taltson hydro expansion project, after an economic review determined that the East Arm power line route to the diamond mines is not economically viable.
Brendan Bell, chair of the Northwest Territories Power Corporation (NTPC), told The Journal that with the limited life span left at Ekati diamond mine and the uncertainty over the proposed Gacho Kue diamond mine, the economics of funding the estimated $700 million Taltson expansion on long-term purchase agreements with the diamond mines no longer make sense. 
"Clearly, prior to the economic downturn the mines seemed more able to get their heads around the notion of a 'take or pay' agreement for Taltson power," Bell said. "Now with the recent setbacks, the shut downs at the mines and the year lost on the regulatory side, it has been incrementally chipping away at that."

Proponents of the project now plan to reassess the economics of other routing and customer options, including the possibility of using at least some of the power for customers in the South Slave and Yellowknife.NTPC is a one-third stakeholder in the Taltson expansion project through Deze Energy, a consortium of Akaitcho Tribal Council, NWT Metis Nation and the government of the NWT.

Deze has long promoted the East Arm power line route to the diamond mines as the only option for the expansion project, despite widespread opposition to the plan from Lutsel K'e Dene First Nation, the NWT Association of Communities and political leaders in Fort Smith, Hay River and Yellowknife.

It appears there has been a shift in philosophy from the top down, as the East Arm was taken off the table.

Bell, who took over as chair of NTPC in December 2010 with the stated priority of pushing the Taltson project forward, said government now realizes that while selling power directly to the diamond mines was a preferred option, it was a long shot to bring the project to fruition that way.

"We were swinging for the fence here, needing a home run," he said. "Now we've taken a step back to say there may be a number of different ways to get that runner home."
Two routing options for power lines that were routinely dismissed as being too expensive by Deze are back on the table. The route over the Simpson Islands to Yellowknife, which would tie in the proposed Tamerlane lead/zinc mine at Pine Point and the Avalon Rare Earth mine north of Great Slave Lake, was pegged to cost $50 million more than the East Arm route. Another option, running lines west around Great Slave Lake to tie in the South Slave communities and Fort Providence before connecting to the Snare hydro facility to create a southern NWT grid, was estimated to cost $200 million more.

Bell said while both routes are more expensive, they may be viable if demand exists from communities and industrial projects along the way. He also cited the potential to tie into an Alberta grid as another option.

The NTPC chair also emphasized that the Deze partnership is still alive and well, and that all proponents will soon get together to make "high level" decisions on what to do next. He hopes the viability of different options will be clear within a few months.

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