2030 Energy Strategy

2 REDUCE GREENHOUSE GAS EMISSIONS FROM ELECTRICITY GENERATION IN DIESEL COMMUNITIES BY 25%. During the regional engagement we heard that reducing reliance on diesel electricity generation in communities was a priority. Community diesel electricity generation produces on average 60,000 tonnes of GHG annually, accounting for on average over several years about 6% of the NWT's annual emissions. The GNWT and partners will implement renewable and alternative energy solutions appropriate to each community and region to reach the target of reducing GHGs from diesel electricity by 25% by 2030. A 25% reduction equates to a reduction of 15,000 tonnes by 2030 over 2015 levels. Addressing fossil fuel use in electricity is a priority because the cost of this electricity is high and a significant contributor to the cost of living in the NWT. Through its ownership of the Crown Corporation NTPC the GNWT will work to reduce the amount of electricity generated by diesel to reduce emissions and stabilize electricity costs. As a primary approach to reduce greenhouse gas emissions in NWT communities, the GNWT will support the displacement of diesel electricity generation through the installation of renewable and alternative energy solutions. Over the life of this Strategy, the GNWT will work with federal, provincial and territorial counterparts to share ideas and seek solutions to reduce diesel use in communities. Energy solutions might include wind, solar, mini hydro, liquefied natural gas, geothermal, transmission lines, combined heat and power, energy storage, variable speed generators, more efficient generators, and other solutions as they become available. The GNWT has identified representative options, including GHG reductions, cost, and subsidy estimates, to achieve the 25% reduction target using renewable and alternative energy. Figure 4 shows the breakdown of GHG emissions from the electricity system, how this relates to the 25% reduction target, and the potential solutions to meet the target. Renewable energy technology has become economic in many places in the south but has yet to become economic in the north. Implementing renewable electricity solutions in the north has so far been more expensive in part due to remoteness, high operating costs, and lack of economies of scale. To date, all recent renewable electricity solutions in the NWT, such as Fort Simpson, Aklavik or Colville Lake solar, have required government subsidies to be economic and not increase electricity rates, even with the high cost of diesel power. The GNWT will seek federal government support, community and Aboriginal partnerships, and provide resources to ensure that these projects succeed. The GNWT estimates that based on current technology, up to $85 million in subsidies on a $190 million investment will be required over the next decade to reach this target and for projects and not increase electricity rates. This subsidy is calculated based on the value of diesel savings from the proposed projects. This is reasonable as other costs that go into electricity rates do not go away, such as the cost of the generators and distribution systems, when renewables are used to displace diesel. The GNWT will work with partners to identify the most effective approach to achieving this target over the course of this strategy, taking into account available funding, evolving technology options, and partnership opportunities. Figure 5 provides a ranking of cost and emissions reduction of representative renewable and alternative energy solutions to help meet the 25% target. The top circles on this graphic show the potential annual GHG reductions for the proposed renewable energy solution to meet the 25% reduction target. The bottom half shows the estimated upfront cost of each solution. Items to the left are generally more desirable as they cost less per GHG reduction, but may be more expensive overall. Everything else being equal, transmission lines to connect diesel communities to hydroelectricity are the more desirable than Inuvik Wind, even though the upfront cost is higher as compared to yearly GHG reduction, because transmission lines last several times longer than wind turbines, and therefore have higher lifetime GHG reductions. There are other factors involved in deciding what projects to proceed with. For instance, small community solar is easier to implement than a large wind turbine or transmissions lines and might occur first even though the costs per GHG reduced is better for large wind or transmission. Similarly, large wind might be simpler to implement than transmission lines even though transmission has a better cost per lifetime GHG reduced. Availability of funds, and other factors such as community acceptance, can also play a role in what projects proceed first. 15

View entire presentation