Nunatsiaq Online
NEWS: Nunavut June 15, 2017 - 1:09 pm

Money the “key” to unlocking Iqaluit’s hydro project: Nunavut power corp.

Without money, the QEC can't move ahead with two-dam plan

The Qulliq Energy Corp. could save money in the long run by building a power-producing hydro dam at Jaynes Inlet, but it lacks the cash to build the dam, part of a larger Iqaluit hydroelectric project. (FILE PHOTO)
The Qulliq Energy Corp. could save money in the long run by building a power-producing hydro dam at Jaynes Inlet, but it lacks the cash to build the dam, part of a larger Iqaluit hydroelectric project. (FILE PHOTO)

While reading the latest update from the Qulliq Energy Corp. about its stalled Iqaluit hydroelectric project, the line that comes to mind is the wistful refrain “wouldn’t it be nice” from the 1966 Beach Boys hit.

In the case of the Iqaluit hydro project, it would be nice if Nunavut wasn’t so reliant on polluting and expensive diesel and could tap into money, some big money—more than $350 million to build two power-generating dams near Iqaluit, and $6.6 million to complete the remaining final feasibility studies.

These two amounts of money, which may have risen to as much as $500 million since the 2013 estimates, are the “key” to moving the mega-project along, the QEC said in the report on the Iqaluit hydroelectric project tabled during the recent sitting of the Nunavut Legislature.

The two dams—one at Jaynes Inlet 60 kilometres southwest of Iqaluit and a second one at nearby Armshow South—would save on long-term costs, the QEC report shows.

As it stands now, Nunavut spends $54 million a year on diesel, the largest item in the QEC budget. To pay for renovations to 13 of its 25 power plants, which are now operating “beyond their useful lifespan,” the QEC has to borrow money.

So, the QEC appears to be in a vicious circle that would be nice to break: the Iqaluit hydroelectric project would cost less to operate over time and reduce money spent on diesel, however, the QEC has no money to build it because its existing plants siphon all its money for diesel purchases.

Started in 2005, the Iqaluit hydro project was designed to supply a sustainable, affordable and reliable source of energy for Nunavut’s capital, with construction to take place in two phases: Jaynes Inlet first, for about $211 million, and Armshow South later, for about $133 million.

The project would, among other things, provide lasting financial, environmental and social benefits as well as jobs, training and business opportunities. The dams would also help cut diesel consumption by at least 33 million litres, the QEC report notes—and that could lead to cheaper diesel prices elsewhere in Nunavut, not to mention a reduction in climate-warming polluting emissions.

But in 2014, the Iqaluit hydro project was shelved after $10 million had been spent on baseline studies and research, because the QEC couldn’t generate or receive enough money to build it on its own.

And Nunavut’s finance minister Keith Peterson has said “as a government, we simply cannot afford mega-projects here in Nunavut.”

The QEC report suggests that the impasse could change if the Government of Nunavut’s debt cap was increased to finance the project, or Canada gave money directly to the project, or private investors became involved in the kind of “transformational investment” that Iqaluit Mayor Madeline Redfern has spoken about.

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(8) Comments:

#1. Posted by Frozen on June 15, 2017

By January, the ice thickens to 2.5 metres.

#2. Posted by Observer on June 15, 2017

A major problem is that while the hydro project would be good for Iqaluit, it does nothing for the other 79% of the people in territory who would still have to rely on diesel, and the assumption that diesel prices would go down elsewhere in the territory as a result is an odd assertion to make.

In other regions of Canada the cost of a similar infrastructure project could be spread out because the dam would be connected to an electrical grid. Up here, it’s unlikely that people in Sanikiluaq or Kugluktuk would be pleased to see their power bills go up so Iqaluit can get their power.

#3. Posted by Raymond on June 15, 2017

And yet we have an indoor swimming pool. Where are the savings?

#4. Posted by Researcher on June 15, 2017

The other key is not to use expensive over priced companies to design and build the hydro projects.

Ask a country like Iceland and Greenland how they have all their hydro projects for almost half the cost of what Iqaluit was going to pay.

Its still taking the right step to get out of expensive diesel power. Long term planning and vision.

#5. Posted by Putuguk on June 15, 2017

Is not this a perfect use of carbon tax money? Nunavut is being handed a very good mechanism for transitioning off of diesel when possible. We should be looking for a commitment from GN and Canada that every penny collected be put towards projects like this.

GNWT already lining up its priorities south of the border to adjust and work with the new carbon tax. We need to do the same.

#6. Posted by Hand to Head on June 15, 2017

Ah… Water Freezes

#7. Posted by Tax no Focus yes better results on June 16, 2017

#5 Canada isn’t cheering for a smoke and mirrors carbon tax, that’s forced upon us all. To be hit with higher prices on everything, only to pay for Iqaluit’s dam, when I don’t even live there.

When others worry their old fuel sucking power generators will go silent at the start of a long freezing blizzard.

Gov of Nu must focus to bring the 13 out dated power generators up to date. Bet it’ll save more fuel combined then dam, while increasing power output and cleaner exhaust in the 13 hamlets.

#8. Posted by Observer on June 16, 2017

#6, ah, there are hydroelectric dams in parts of the world that also have winter. Freezing is not unique to Nunavut.

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