City weighs cost of geothermal project

A large abandoned underground gold mine just south of the City of Yellowknife could provide the Northwest Territories community with geothermal power, an environmentally friendly resource to help meet the Far North community's energy needs.

But the immediate challenge facing Yellowknife officials in bringing the project to life is not "how," but rather "how much."

Yellowknife is in advanced stages of project engineering and planning to install a district heating system by extracting geothermal heat from the abandoned Con Mine. Several studies funded by the city found that the Con Mine's high temperatures - upwards of 34 degrees Celsius, or 93.2 degrees Fahrenheit - and its location directly below much of the city could make it a prime source of geothermal energy.

In January, the Canadian government gave the Con Mine geothermal project a major boost by selecting it, along with 18 other proposals across Canada, to receive C$146 million from a C$1 billion federal Clean Energy Fund. The first projects are expected to commence this spring, following completion and signing of contribution agreements with the successful proponents.

Natural Resources Canada earmarked C$10 million to C$20 million over the next 5 years for the Yellowknife geothermal project. A feasibility study that accompanied Yellowknife's application for the "Clean Energy" funds estimated a total project cost of C$32 million.

Before signing final agreements for the federal money, Yellowknife Mayor Gordon Van Tighem told Mining News Feb. 22 that the city is conducting a final analysis of the relative cost benefit of the project to Yellowknife residents.

While anyone building a new structure would likely benefit from the project, he said the potential benefit to existing home and business owners in the city is not clear.

"If you're going to invest $32 million, there should be a practical return," Van Tighem said.

"The project is also contingent on finding the other C$12 million," he said, noting that the federal government has committed to pay for about half the cost of the project.

Van Tighem said Yellowknife residents and businesses pay about C23 cents per kilowatt-hour, a cost that compares poorly with some southern Canadian communities, where industrial power can be obtained for C3 cents per kilowatt-hour.

Mine produces gold during reclamation

The former Con Mine, which produced 5 million ounces of gold from 1938 to 2003, is currently being demolished in an ongoing reclamation project by Newmont Mining Corp.

Among buildings being spared by request of the Yellowknife City Council is the Robertson Shaft headframe, the tallest structure in the Northwest Territories. Planners envision the structure as everything from an indoor garden to a condominium development, but the building also might be used as the operations center for a geothermal heat plant.

Preliminary studies indicate that geothermal energy raises the temperature at the deepest levels of the mine to 50 C, or 122 F. As groundwater slowly fills the shafts, the old mine might provide the community with enough energy to heat half the city.

The 340-hectare, or 840.2-acre, mining and processing site is held under lease from the Northwest Territories.

Part of a multiyear contract with Newmont involves remediation of the site. It includes demolition of dozens of unwanted buildings, capping of tailing ponds and cleanup of soil contaminated with hazardous chemicals such as arsenic.

In November, Newmont reported recovering about 1,400 ounces of gold during the demolition process before it shut down reclamation operations for the winter.

Old technology but new challenges

Yellowknife is considered one of the best Canadian markets for low-enthalpy geothermal heat, as 70 percent of the energy used in the city is used for space heating homes and buildings.

While geothermal heating is a proven technology, Van Tighem said every project has its challenges.

Assuming the Con Mine can provide about 20 percent of the city's heat demand, the market value of the mine's geothermal resource can exceed C$13 million per year, according to a study conducted by researchers at the University of British Columbia. This high market value can justify deep drilling into the highest-temperature sections of the resource.

Moreover, if geothermal mostly replaces diesel fuel, the total greenhouse gas reduction for the city can exceed 40,000 metric tons per year (i.e. 2 metric tons of reduction for each Yellowknife resident). The market value of the saved GHG (at $12 to $15 per metric ton) can exceed C$500,000 per year.

In order to reduce the cost of geothermal infrastructure (i.e. drill holes, pipelines and energy distribution system), the study recommended that only a section of the south end of the city (i.e. the areas which are closer to deep mine workings) be targeted for geothermal heating from the Con Mine.

However, if it is deemed feasible to drill into the mine, it would be possible to access it from anywhere in the city that is in close proximity to a mine drift, the study added.

A distributed resource development may therefore be preferred over a centralized system. Mine workings extend below much of the city. Separate geothermal systems for different high-density new developments or retrofits can be developed to minimize requirements for distribution.

Van Tighem said the feasibility study recommended initially focusing on heating the downtown core, with installation of a wood pellet boiler as soon as possible and converting to geothermal power in 2017.

Though Natural Resources Canada emphasized the project's additional potential value in helping determine if the geothermal technology could be replicated in other northern communities, Van Tighem said Yellowknife is already well-known for municipal innovation.

"We've been awarded the title of Canada's most sustainable city for three consecutive years, when no other community has won that distinction more than once," Van Tighem said. "Now we have to work on our competitiveness."