Can the Taltson hydro expansion deliver on its promises?

After the Taltson hydro expansion was referred to the federal government’s Major Projects Office by the prime minister last week, some worry the project might not make meaningful progress the territory’s most pressing energy issues.

Others say the project could help advance major mining projects already under way, paving the way for more corporate investment in the Northwest Territories.

The project, as proposed, would add 60 megawatts of capacity to the existing 22-megawatt Taltson facility near Fort Smith and connect it to the North Slave’s Snare hydro system through a submarine cable across Great Slave Lake.

If built, the combined grid would serve 11 communities and more than 70 percent of the NWT’s population.

Range Lake MLA Kieron Testart described last week’s announcement – which included the referral of two other projects to the Major Projects Office and major investment in Arctic defence infrastructure – as “amazing,” saying it will bring long-term security, economic stability and “real investment in the North.”

Yet while the Taltson project will help address some energy issues in the NWT, he said, affordability may not be one of them.

“If you’re going to build a project like that, you need to have revenue coming into it – you need to have customers on the other side – and we still don’t have those customers,” said Testart.

“It’s very much a submarine cable of dreams, that ‘if you build it, they will come’ kind of thing.”

Without large industrial customers, such as mines, lined up to pay for the additional power generated, the additional expenses could be placed on the ratepayer or taxpayer through the territorial government, Testart said.

“The reliability is good. Tying the grids together is good. Being able to move energy north and south is good, but we need a few more pieces there before we can really start to see our power rates go down,” said Testart.

In an interview, Yellowknife North MLA Shauna Morgan articulated three objectives that people often speak about when it comes to solving energy issues in the NWT: reliability (reducing frequency and duration of outages), affordability and increasing renewable energy.

“To make an actual business case, you need to show that this project is more cost-effective than other possible ways of achieving those objectives,” Morgan explained.

She said she hasn’t yet seen a business case for the Taltson project.

“Simply connecting the two grids is not a magic bullet solution to reliability, depending on what are the major sources of the power outages and sources of our backup and how quickly we can get backup going” in the event of an outage, Morgan said.

She said a lot of things need to be in place to allow for reduced power costs.

“If you’re going to produce a whole bunch of extra new power and send it to the mines, it has to be in a large enough amount that it would be significant – that you would get significant new revenues,” she said.

“But also the new infrastructure can’t cost so much to build or operate that the new revenues are all cancelled out by the new costs. You have to make the cost-benefit analysis.

“There’s a lot of hopes, in big, sweeping terms, about what this could do, and not a lot of details of people running actual numbers.”

In a statement provided to Cabin Radio after the initial publication of this article, the Department of Infrastructure through a spokesperson said that clean energy projects and grid connection take years of planning and coordination before they can advance to construction.

“The Taltson Hydro Expansion will rely on a proven, clean energy technology that is well-positioned to help stabilize the cost of energy for 70% of the population while reducing diesel reliance and connecting communities, industry and new infrastructure to a unified grid,” the statement said.

“A final investment decision will not occur until key elements, including commercial agreements, regulatory approvals, financing, long-term benefits and risks are better defined.”

The spokesperson said the department anticipates a decision on the construction of the project can be made by the end of 2028.

“Affordability, long-term energy security, and reducing reliance on diesel remain key considerations as the project continues to be evaluated as a clean energy option for the territory and project partners to pursue,” the spokesperson said.

“We look forward to demonstrating progress to support those objectives in the coming year.”

Industry support

Karen Costello, executive director of the NWT and Nunavut Chamber of mines, said she isn’t concerned about finding large industrial customers for the additional power the project would generate.

“There will be a customer base,” said Costello.

“It may not be today or tomorrow, it could be basically next week, but these projects aren’t going to be built today or tomorrow or even next week – they’re going to be a few years down the road.”

She said building the expansion could provide the time needed for mining companies to advance their projects.

“Once you start investing in infrastructure for your people, it has the strong likelihood of attracting additional investment from the private sector into initiatives such as mining projects,” Costello said.

In the absence of the Taltson expansion, companies who do want to open mines in the North Slave have been working on other solutions.

April Hayward, chief sustainability officer for Li-FT, explained that the current energy grid doesn’t have the capacity to support mining operations.

While the company is still in the exploration phase, Li-FT is looking to build a lithium mine east of Yellowknife with construction beginning in the early 2030s.

Historically, mining operations in the region have been primarily powered by diesel generators. Hayward said Li-FT is interested in exploring other sources of energy.

In partnership with the Det’on Cho group, Li-FT has applied for funding through the federal government’s critical minerals infrastructure fund to build a renewable energy centre that would harness wind and solar and use liquefied natural gas as a backup.

“It could help reduce our greenhouse gas emissions but also provides a business opportunity in the North, and helps to secure the energy supply system in the North, providing alternatives to the hydro electric grid,” Hayward said.

If approved, the facility would be owned and operated by Det’on Cho, Hayward said, while Li-FT would be the primary power customer.

“There is a need for more energy in the Yellowknife area, generally speaking,” said Hayward.

“A lot of these projects, like the proposed renewable energy centre and Taltson, really aren’t mutually exclusive.

“Those are only good things to help create more energy security and also to reduce the overall greenhouse gas productions with supplying energy in the North to mines and to regular citizens alike.”

More than just mines

Kenny Ruptash, president of Nahanni Construction and a former president of the chamber of mines, said the Taltson expansion could help entice more companies to build in the NWT.

While most of the work Nahanni Construction does is in the mining sector, Ruptash said he’s also been approached about the possibility of building data centres in the Yellowknife. Those centres have power needs that exceed the current capacity.

He said companies such as Gold Terra and Pine Point Mining, which are looking to opening mining operations, have the potential to become primary power customers.

Additionally, he said, the added redundancy in the power grid could free up capacity in the Snare hydro system for Fortune Minerals’ Nico mine.

“That itself would develop three projects, and that’s not even including any
initiatives to develop power lines up into the North Slave,” said Ruptash.

He said he thinks there would be a return on this investment.

Ruptash compared the hydro expansion to building roads for the diamond mines.

“Had government built a road back then, they would have had a lot of the road paid off by now and new resources potentially being developed along with it,” said Ruptash.

“The resource sector would be a huge client for government major infrastructure, but they need to build it before industry starts contributing.”

‘We just don’t have any faith’

Others take a more critical view of the proposed energy project.

Alternatives North, a social justice coalition, has long opposed the Taltson project, arguing it isn’t an effective use of funds.

In June, the organization outlined many of its concerns in a letter to the prime minister.

“We just don’t have any faith that it can be completed as envisioned or with a budget that’s envisioned,” said Robert Bromley, a member of Alternatives North.

He pointed to the recent overhaul of Taltson’s existing infrastructure, a years-long operation that the territorial government said last week is finally complete.

The overhaul and associated unexpected repair work jointly cost about $155 million, while the initial estimate was around $70 million.

The work took about four times longer than planned, in part because of a wildfire raging through the site and a series of equipment issues. Then, the NWT Power Corporation found a corrosion problem that was more serious than first thought.

Bromley said he’s seen other renewable energy projects popping up elsewhere that the territory could look to, such as small hydro projects, and projects to power some mines in Nunavut.

“They’re using wind and solar, principally, and storage, and all of those have steadily become cheaper, steadily become more efficient, and their capacity has ramped up,” said Bromley.

The Taltson project still has to go through an environmental assessment, Bromley noted.

“We’ll certainly be speaking out on that,” he said.