Hydropower project offers lessons for Canadian First Nation developers – report

The 2.1-MW Atlin hydropower project run by a First Nation community in a remote corner of northern British Columbia could be a model for investors as Canada seeks to repower communities that rely on diesel for electricity, according to a new report.

The study by the Conference Board of Canada found that the run-of-river project, which went online 12 years ago in Atlin, British Columbia, has helped the community of about 450 people — who are both non-Indigenous and members of the Taku River Tlingit First Nation — develop expertise in power-system operation and boosted revenue for the nation. The success of the project, which is owned by the Taku River Tlingit First Nation and operated by its development subsidiary Xeitl Limited Partnership, has spurred the nation to explore bumping up the size of the facility and exporting power to the nearby Yukon Territory through a transmission interconnect.

"As a result of their work and ownership, the Taku River Tlingit First Nation is becoming an established expert in Indigenous clean energy projects," the report said. "Partnering with the private sector can support community capacity and ensure project success. The key is identifying and hiring the right contractor and committing to managing them well."

The skills acquired by the Taku River Tlingit First Nation in building, financing and running the project are likely to become more valuable amid an aggressive climate change-mitigation program backed by the government of Prime Minister Justin Trudeau, which seeks to replace aging diesel generators across Canada's North with cleaner energy sources that could range from wind and solar to small nuclear reactors. The Atlin project was started in 2009, preceding a boom in First Nation ownership of renewable projects that saw growth of 30% annually between 2017 and 2019, to average equity ownership of 45% from 32%, according to data compiled by the Conference Board of Canada, a non-profit economic think tank based in Ottawa.

Limited employment

Output from the Atlin project is sold to the BC Hydro and Power Authority under a power purchase agreement to provide 2.1 MW of capacity through 2034. Province-owned BC Hydro still maintains a 2.6-MW diesel generator at Atlin, which serves as a backup for the hydro plant. Switching to hydropower has reduced the need for the 1.7 million liters, or about 450,000 gallons, of diesel fuel that had to be transported to Atlin annually. The Conference Board study estimates the hydro replacement has reduced power-generation greenhouse gas emissions of at least 4,350 tonnes annually.

Despite the benefits of the project, though, employment for members of the Taku River Tlingit First Nation has faced challenges. Although the company hired local contractors during the construction phase, only one of the four full-time operators of the project is a member, the Conference Board of Canada said. Seasonal employment is a continued benefit to the community, the study found.

"The project had limited full-time, permanent employment opportunities for First Nation residents," the report said. "The community still reported value in the seasonal job opportunities. For individuals with few employment opportunities, seasonal work can provide a decent-paying job."

The hydro project provides about C$450,000 in annual revenue, which is reinvested in community and economic development programs, including an expansion project that would add two turbines and two powerhouses along with a 93-kilometer line north to the British Columbia-Yukon border. Approvals for the expansion, which would boost the capacity of Atlin to 8 MW, are anticipated in 2021.

"The projected construction costs of the hydro expansion are about 10 times the original project," the report said. "In turn, it is anticipated that the economic and social benefits to the community will far exceed the original project."