Starting by stating the obvious, the Yukon Microgeneration Program was foundational to Solvest. It allowed us to develop a team of over 70 people who have installed 25 MW of renewable energy capacity (Equivalent to powering 3000 homes year-round) across all 3 Northern Territories, Northern BC, and Manitoba as well as founding two affiliate companies who are making positive contributions to Northern Canada – ColdAcre Food Systems and High Latitude Energy Consulting.
We welcome the discussion about the role of solar in the Yukon that has arisen as a result of the recent pause of the microgeneration program in Whitehorse and the surrounding areas, however, this pause has also led to an increase of misinformation. Solar is not a panacea that will solve all the Yukon’s energy problems, but it is highly misunderstood and provides far more value to the Yukon’s electricity grid than is commonly recognized.
Misunderstanding #1 - Solar only produces in the summer when the Yukon grid doesn’t need it.
The graph below shows the power production curve from the North Klondike IPP (Independent Power Producer) – owned and operated by Solvest near Whitehorse (and pictured above). The blue boxes highlight the times of year that grid is utilizing fossil fuels to generate power as a result of cold weather or low water levels in the hydro reservoirs. Over 50% of the energy generated by this power plant occurs during these times of year.
Yes, 40% of the energy is generated in the summer when there is excess hydro power available, however, this is offset by the value of the shoulder season energy as burning diesel is much more expensive.
Moreover, the Yukon’s electricity demand is rising rapidly, having increased over 30% in the past 5 years (from 400 GWh annually in 2018 to 527 GWh annually in 2023). With increasing electrification of our homes and rising demand for EV’s and plug-in hybrids, this load growth is likely to accelerate in the coming years, consuming much of the surplus hydro and solar energy available during the summer months.
It should also be noted that the North Klondike IPP is not optimized for shoulder season/winter power generation. If the solar panels were installed at steeper tilt angles and the rows of solar panels were spaced farther apart to avoid shading in the winter, over 70% of the energy generated would occur during winter/low water periods. The power plant is not optimized for winter generation as it would produce less energy on an annual basis and IPPs currently get paid a flat rate regardless of time of year. However, a change in the rate payment structure to accommodate variable seasonal rates would encourage IPP installations to be design to favor shoulder season/winter production.
Misunderstanding #2 - Solar power negatively impacts rate payers
To compare the value of different electricity sources the utility industry uses a term called Levelized Cost of Energy or LCOE. LCOE refers to the total lifetime cost of building and operating a power generation facility divided by the total amount of energy the facility will produce during its operational lifespan. Solar has the lowest LCOE of any new energy source in the Yukon. To demonstrate this, below solar is compared to the recently announced Atlin Hydro Expansion Project and diesel generators.
North Klondike IPP – LCOE
- $2.2M Construction Cost / (1.6 GWh a year of electricity x 25 years) = $0.055 per kWh of electricity
Atlin Hydro Expansion – LCOE
- $330M Estimated Construction Cost 1/ (31 GWh a year of electricity x 40 years2) = $0.266 per kWh
Diesel Generators
- Diesel generator LCOE range from $0.30 to $0.50 per kWh depending on the fuel price.
*It should be noted that the above LCOE calculations do not include Operations and Maintenance costs, however, this would further skew the calculations in the favor of solar as it has much lower maintenance costs than either hydro or diesel.
The above calculations show that solar is over 4 times cheaper than small scale hydro projects such as the Atlin Hydro Expansion and is up to 9 times cheaper than burning diesel. Even with half of the solar energy generated in the Yukon being “wasted” during the summer, it is still 2 and 4 times cheaper than small scale hydro and diesel generation respectively, thereby saving ratepayers money as compared to using just hydro and diesel year round.
Hydro and Diesel do have a major advantage of being “dispatchable” meaning they can be turned off and on as needed regardless of time of day, however, the addition of batteries to solar power plants can provide similar benefits. The addition of batteries to a solar project would increase it’s LCOE by 60%, so it would still remain the lowest cost energy source while being dispatchable.
Solutions to the Yukon’s Energy Challenges
As referenced at the outset, Solar is not a silver bullet and cannot solve all the Yukon’s electricity challenges but it does have an important role to play. Moreover, if specific investments and policy changes are considered the positive impacts of solar can be amplified. Three important considerations would be changing the settings on existing installations, incentivizing the addition of batteries to both residential and IPP solar systems and the development of seasonal storage (be it pumped hydro, compressed air storage, or hydrogen) for the Yukon grid.
Settings Changes
The utilities have raised concerns about microgeneration solar installations creating or adding to grid instability in the Whitehorse area. There is merit to these concerns, however, they can be addressed by changing the grid parameters on the inverters. These settings changes can easily be completed this winter and would not only alleviate the concerns raised by the utilities but enable functions on the inverters that can actually help bolster the grid.
Battery Storage
Over the past 9 years, Solvest has installed over 750 small scale residential/commercial solar systems throughout the Yukon and 6 large solar IPPs. Almost all of these installations are viable for battery system upgrades should a policy framework be developed to incentivize the installations.
Residential batteries would enable the storage of solar for use at night or during peak times and would smooth out the fluctuations in solar output caused by weather changes. Additionally, batteries can be charged at night during the winter, when grid demand is lower, and discharged during the peak morning hours to help the utilities avoid the large surge in demand that occurs. Finally, residential batteries would provide peace of mind to homeowners, supplying backup power during utility outages. Combined with the settings changes to existing inverters referenced above, batteries would eliminate any grid stability concerns raised by the utilities in regards to microgeneration solar.
Larger grid scale batteries can be installed at existing and future solar IPP sites. These batteries would smooth the output of the solar power plants, and could provide grid support services – discharging or absorbing power to help the utility maintain power quality as well as protecting against grid outages if an interruption occurs to other parts of the grid. These grid support services would be available 24/7, not just when the sun is shining. Multi-Megawatt batteries can be installed within a 1-year timeframe, however, the IPP owners would need to be compensated for the additional capital they invest to help improve the Yukon grid. Currently, the IPP program does not provide compensation for installation of battery storage.
Hydrogen Storage
Of the potential seasonal storage technologies, hydrogen storage in particular could provide substantial benefits to the Yukon grid by converting excess solar and hydro energy during the summer into hydrogen. The hydrogen would then be stored for use during the winter and can be blended into Liquefied Natural Gas (LNG) generators to reduce LNG consumption by up to 30%. This would provide a potential path to substantially reducing emissions at future mining operations developed in the territory.
Hydrogen also has the benefit of shorter development timelines, meaning the Yukon would not need to wait a decade or more to deploy the technology.
Were a hydrogen facility to be built in the Yukon, solar would become the energy generation source of choice for new capacity due to its low cost and scalability from residential systems to large power plants.
Conclusion
As a small, isolated grid, the Yukon faces many challenges as our electricity demand continues to grow rapidly. How this demand is supplied without defaulting to increased diesel & LNG consumption is one of the major challenges the territory faces in the years to come. Solar cannot singularly solve these challenges but in combination with battery and seasonal storage should play an important role. Solvest looks forward to engaging with Government, the Utilities, and Yukoners to develop made in Yukon solutions, which empower individuals, businesses, and utilities to make investments that ensure we have clean, reliable, and low-cost energy for decades to come.
Ben Power
Co-founder, CEO, Solvest