If you build it, will they come? N.W.T. gov't hopes hydro expansion will attract investment

A major expansion of the Taltson hydroelectric system will remain the stuff of dreams unless there is a power-hungry mining industry in the territory's future.

On Monday night, representatives from the territorial government and the Northwest Territories Power Corporation made a case for connecting the Taltson dam which is located in the territory's South Slave region to Yellowknife and the diamond mines.

Ultimately, the goal would be to also connect to the North American power grid.

It's a project the government says could help stabilize electricity rates and significantly reduce the territory's greenhouse gas emissions.

But it needs a major customer i.e., mines to be viable.

The expansion also involves increasing electricity generation at the facility from 18 megawatts (MW) to 60 MW.

"All roads lead back to Taltson," said Jay Grewal, president and CEO of the NWT Power Corporation. "If we are not able to connect the north and south grids, our reality will be difficult and challenging."

No end in sight for rising costs without expansion

Average power rates in the Northwest Territories are nearly five times higher than the Canadian national average, said Grewal. It's discouraging residents and industry from moving to, and investing in, the territory.

Over the last five years, she said, rates have gone up 31 per cent. At the same time, the power corporation's revenues have declined due to the need to maintain aging energy infrastructure.

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The corporation predicts either rates will continue to go up, or the territorial government will have to cover those rising costs.

Project could slash greenhouse gas emissions

This project is also part of the territory's 2030 energy strategy, which aims to reduce greenhouse gas emissions without suppressing the mining industry.

The government believes it could cut emissions by about 224 kilotons. This amounts to 44 per cent of the reduction target the territory agreed to under the pan-Canadian climate change framework.

There is no certainty with any future mines.- Niels Konge, Yellowknife councillor

Right now, the N.W.T.'s resource extraction sector is fuelled almost entirely by diesel, meaning industry produces about 50 per cent of the territory's emissions.

At the same time, mining accounts for roughly 30 per cent of the territory's gross domestic product.

"We'd like to continue with those jobs," said Andrew Stewart, energy director with the territorial government.

Exactly how much the whole expansion project would cost remains to be seen. The government is currently studying the feasibility of an underwater cable as a means of transmitting the power across Great Slave Lake.

Stewart said in 2010, an AC submarine cable cost $8 million per kilometre.

A tough sell

A business case put together in 2014 pegged the price of the expansion at $1.2 billion.

"[This is] going to be a tough one for you guys," said coun. Niels Konge. "There is no certainty with any future mines, and without future mines, there is no business case Is it build it, and hopefully they will come?"

Stewart said finding a market for 60 MW of power is the next phase of the project.

"It's a really tough discussion to have about market if you don't have a good handle on what your cost estimate even is," he said.