Yukon Energy Corp. says it is encouraged by preliminary findings in its search for geothermal energy sources.

Engineers contracted by the territorial public utility are in their third year of field tests, hoping to find an underground heat source that could produce electricity.

Their studies suggest that the Jarvis Creek area, north of Haines Junction, shows the most potential so far. Preliminary drilling tests done there last year found underground water with a temperature of about 80 C.

"They [the engineers] think it's warmer, so we're going to try to do some more work next year and prove that," Yukon Energy president David Morrison said.

"If we can get into the 100 [to] 110 C range, we're pretty certain that we can push forward a project if we can locate the source of the reservoir."

Potential sites in Whitehorse

Morrison said a few good sites have also been identified in the Whitehorse area, but he wouldn't specify where in the capital city they are located.

"I'm not trying to be coy, but I really don't want to be very specific," he said. "Whitehorse obviously has some potential because of its geological structure and that there are hot springs in the area."

Yukon Energy, which generates mainly hydroelectricity but also has backup diesel generators and two wind turbines, has spent almost $1.5 million over the past two years to find potentially viable geothermal power sources.

Morrison said more drilling planned for this fall along Jarvis Creek should help engineers determine if that area can provide geothermal energy.

"The beauty of this is it has a high rate of efficiency — geothermal projects run in the 90, 95 per cent range — which is great, so it means they just run all day," he said.

"They're clean, it's a renewable source, so it's quite an efficient use of energy."