Wind Energy.

Powering Canadas futurenaturally Lnergie olienne - lavenir nergtique naturel du Canada

Canadian Wind Energy Association

Association Canadienne de Lnergie olienne

WindSight

Vol. 20, No. 1, Feburary 2007

INSIDE
A very good year Canada more than doubled its wind energy capacity during a recordshattering 2006. Another RFP Nova Scotia Power announced its plan to buy another 130 MW of renewable energy.

New federal program restores production incentive for wind

OTTAWA The Conservative government has announced a new renewable energy production incentive program that is expected to bring the wind power industry back to where it was before federal funding was frozen last spring. Prime Minister Stephen Harper announced his governments new EcoENERGY for Renewable Power (ERP) program at a news conference in Victoria January 19. The program, to be implemented starting in April, will run for four years and target the installation of 4,000 MW of generating capacity from renewable energy sources that include wind, biomass, small hydro and ocean energy. It will provide a 1/kWh payment for the first 10 years of a projects life at a cost of $1.48 billion over 14 years. While the overall target of ERP is lower than the plan laid out by the Liberals in their 2005 budget, which set aside funding for 3,000 MW of new wind capacity and 1,500 MW for other renewable energy technologies, the wind industry is not expected to lose any ground. A planned discussion paper outlining proposed terms and conditions of ERP was expected to recommend that of the program target, 3,000 MW be allocated to wind. CanWEA president Robert Hornung applauded the announcement, saying it ends the uncertainty the industry has faced since the Harper government froze
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Competitive option A new report recommends a bigger role for wind power in Saskatchewan.

Nouveau programme fdral : retour de lencouragement la production

OTTAWA Le gouvernement conservateur a annonc un nouveau programme dencouragement la production dnergie renouvelable qui devrait ramener lindustrie olienne l o elle se trouvait avant le gel du financement fdral le printemps dernier. Le premier ministre Stephen Harper a annonc le nouveau programme du gouvernement, Initiative coNERGIE sur les nergies renouvelables, lors dune confrence de presse donne Victoria le 19 janvier. Le programme, qui sera mis en uvre compter du mois davril, fonctionnera pendant quatre ans et a comme
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Sound study CanWEA is developing best-practice guidelines for sound.

11

Details still need to be worked out

(Continued from page 1) Suite 320, 220 Laurier Avenue West Ottawa, Ontario, K1P 5Z9 Toll Free in Canada 1-800-9CanWEA Elsewhere Tel: (613) 234-8716 Fax: (613) 234-5462 eMail info@canwea.ca Web Site http://www.canwea.ca President Robert Hornung eMail: RobertHornung@canwea.ca Policy Directors Sean Whittaker eMail: SeanWhittaker@canwea.ca Sandra Schwartz eMail: SandraSchwartz@canwea.ca Communications Coordinator Britt Bengtsson Conference Planning and Membership Coordinator Janice Taylor Tel. 1-800-922-6932 ext. 500 Fax (902) 894-4109 janicetaylor@canwea.ca Bookkeeper Jos de la Barra

2006 DIRECTORS & OFFICERS

Joyce McLean, Chair Daniel Charette, Vice Chair Jonathan Sandler, Secretary/Treasurer Chuck Edey, Past Chair Gilles Ct, Director Liz Cussans, Director Richard Legault, Director Marc LeBlanc, Director Derek Lim Soo, Director Lars Moller, Director

WRITING AND PRODUCTION

Contact: Drew McKibben Tel. (403) 245-2554 eMail mc.b@shaw.ca
Contents copyright and may not be reproduced without permission from Drew McKibben. Windsight is always looking for articles and photos relating to wind energy. Please send your submission to Drew McKibben at the address above. Please note submitted articles will be subject to revision and editing.

funding for a planned expansion of the wind power production incentive program last spring. Were glad that the uncertainty has been resolved. It did have real world implications. There was one project that was cancelled that made reference to this issue in particular, and there have been a number of projects that have had to manage the risk associated with not knowing whether or not these funds would be available when they had counted on them, he says. It also, he adds, had a negative impact on investors looking for stability in the Canadian market. But the announcement does now provide a stable policy framework through March 2011, which is very positive. Once again it shows a strong federal commitment to wind energy development and a willingness to support provincial governments in their pursuit of wind energy objectives. At the same time, Hornung points out that the provinces have procurement targets and purchase plans in place that total nearly 10,000 MW by 2015, far beyond the ERP target. CanWEA, he says, believes the federal government could do more to support those efforts. We expect the funding in the ERP program will be fully committed well beyond 2010. There is a need to think about both complementary and future measures. There may be a need to further expand this program or to create new mechanisms that provide support in other ways, for example through the tax system. The federal government could provide assistance to provincial governments to understand, address and remove some of the barriers to wind energy development. There are a number of different possibilities, and we will spend some time thinking about it over the next little while. CanWEA wants to work with the federal government to develop a comprehensive wind power strategy for Canada, something Natural Resources Canada, in its response to the 2006 report of the federal Environment Commissioner, said it is also interested in pursuing. Were eager to sit down with the government and begin to do that, says Hornung. While applauding the ERP announcement, the Clean Air Renewable Energy Coalition also said more needs to be done. It challenged all political parties in Canada to endorse a green power production incentive targeting 12,000 MW of power. To build an industry, there is a need for certainty, the type of certainty that would come with a 12,000 MW commitment from the federal government, says John Keating, CEO of Calgarys Canadian Hydro Developers Inc. With certainty will come the level of investment required to put Canada on the green power map. The details of how ERP will be implemented still need to be worked out, but Hornung expects that to happen quickly. I think there will be a strong interest among all parties to ensure that the process moves in as expeditious a manner as possible, he says. The reason is that the announcement itself does not guarantee implementation. There will still need to be a submission made to the Treasury Board to formally approve the allocation of funding. The reason the WPPI expansion didnt go forward is that that didnt happen on time. And of course there is a lot of election speculation in Canada at the moment.
February 2007 WindSight 2

Industry makes great strides, faces new challenges

2006 SAW INSTALLED WIND CAPACITY MORE THAN DOUBLE DESPITE POLITICAL, REGULATORY HURDLES

TTAWA Canadas wind industry had what president Robert Hornung describes as a tremendous breakthrough year in 2006, more than doubling the countrys total installed capacity with the completion of 21 projects in six provinces. The industry installed 775 MW to bring the total wind capacity across the country to nearly 1,460 MW by the end of the year. It was a year where we moved to a level, a much higher level, of productivity that we think we can sustain going forward. It is, I think, a true indicator of the kind of potential Canada has over the next few years to develop wind energy, says Hornung. Ontario led the way in 2006, commissioning six projects with a combined capacity of 399 MW to take over top spot among the provinces. But there were also milestones in other provinces as well. In Quebec, the 109.5 MW Baie-des-Sables wind farm, the first of the eight projects selected under the provinces first request for wind power proposals, came on line. That is a sign of what is to come there, says Hornung. For sheer number of new installations, Nova Scotia takes the honours. The province added nine projects totalling 13.4 MW to its electricity grid, an indication, says Hornung, that wind energy can develop at multiple scales and modes in Canada. Manitoba saw the completion of its first wind project in 2006, while neighbouring Saskatchewan finished installing its largest. And despite transmission and market challenges, Alberta added to its total with three projects totalling Quebecs 109.5 MW 109.5 MW. Baie-des-Sables project, In addition to the new megawatts were the new above, came online in December. Left, commitments made to procure wind energy. Requests Ontarios 189 MW Prince for proposals were either announced or pending in New project was completed in Brunswick, Quebec, Manitoba and Nova Scotia, while 2006, taking over honours as Canadas Newfoundland and Labrador Hydro and BC Hydro largest wind farm. signed contracts for their first utility-scale projects. Ontario also launched its standard offer contract program in 2006, promising $0.11/kWh for small-scale renewable energy projects up to 10 MW in size. It provides an indication the growth is going to continue, says Hornung. Were really in a situation where we can look forward to the fact that every province in Canada will have installed wind capacity. When you think about even just five years ago, where you essentially had wind energy outposts in Quebec and Alberta and not really much else going on, it is a tremendous evolution of the industry in a short period of time. Still, CanWEA expects growth to take a dip in 2007. Our rough estimate at this time, and its a conservative estimate, would be at least 500 MW in 2007, with the potential for it to be 50% higher than that, and with the expectation that 2008 would be a significantly bigger year, says Hornung. One reason for the expected decline is simply the timing of the signing of contracts. But there are other factors as well. I guess the key one is that some projects are facing challenges in terms of approval timelines that are
Brookfield Power

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February 2007 WindSight 3

Cartier Wind Energy

Canadas market captures international attention

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extending beyond what was originally expected, says Hornung. Because of that, some of what we might have expected for 2007 is moving into 2008. There is little doubt that community acceptance and permitting became more of a challenge for the wind industry in 2006. In Quebec, developers faced calls for the nationalization of the industry, demands for moratoriums on development while land use and other impacts are examined, local campaigns to place restrictions on project development, and requests from municipalities for a bigger slice of the financial pie. Next door in Ontario, one project was cancelled in 2006 because it could not get the necessary municipal permits in time to meet its 2006 installations: delivery deadline, and two others faced significant delays triggered by requests from local residents for the province to elevate them to Alberta more stringent environmental reviews. Soderglen 70.5 MW At the same time, Hornung points out, six other Ontario projects Chin Chute 30 MW did get built in 2006 and wind farms in other parts of the country Kettles Hill 9 MW found strong community support. You have to put it into perspective, but it is fair to say its a challenge and a growing Saskatchewan Centennial 59.4 MW challenge, says Hornung. Part of the Ontario problem lies in the assessment process itself, says Hornung, and streamlining it would Manitoba help. But another part of the solution is providing good information St. Leon 84.15 MW and responding proactively to local concerns over issues like noise, aesthetics, and the property value impact of a technology many Ontario people are not familiar with. Prince 189 MW Erie Shores 99 MW On the municipal side its still a matter, frankly, of building Melancthon 1 67.5 MW policy and trying to avoid getting into a spiral of a patchwork of Kingsbridge 1 39.6 MW municipal regulatory regimes that become increasingly Ferndale 3.3 MW conservative. Rosa Flora Ltd. 0.6 MW One of the most significant issues the industry faced in 2006 was the uncertainty brought on by the decision of the Conservative Quebec Baie-des-Sables 109.5 MW government, elected in January, to freeze funding for a promised expansion of the federal wind power production incentive. Wind Nova Scotia energy is very much a global industry and investors want to go Lingan 4 MW where there is some policy stability and where they can get a good Higgins Mountain 3.6 MW rate of return. There is no doubt the uncertainty over WPPI, I think, Fitzpatrick 1& 2 1.6 MW threatened to erode a little bit of confidence for investors both in Springhill 0.9 MW Tiverton 0.9 MW Canada and outside Canada about the Canadian marketplace. Point Tupper 0.8 MW Despite that, it is clear Canadas wind market caught the attention Digby 0.8 MW of the global industry in 2006. Irelands Airtricity bought Toronto Marshville 0.8 MW developer Gale Force Energy, UK-based Renewable Energy Generation Limited acquired Ontarios AIM PowerGen Corporation and Germanys HSH Nordbank AG took an undisclosed minority stake in Torontos SkyPower Corporation, while some of the biggest players in the US market, including FPL Energy, PPM Energy and Invenergy Wind LLC, began to take a serious look a the opportunities here. The international acquisitions are part of a broader trend towards greater consolidation in the industry that also marked 2006. We have seen a number of smaller players purchased by larger players. In part that is fairly
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February 2007 WindSight 4

Firmer targets, clearer procurement paths are needed

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typical of the evolution of different sectors, says Hornung. But the characteristics of the wind industry itself have also played a role, he adds. It is a reflection of the very competitive processes through which wind energy is procured. It is a product of the difficulty in procuring turbine supplies, and its a product of the need to find the best possible financing arrangements you can. With Januarys announcement of the Conservative governments new ecoEnergy Renewable Power program, the industry should see more policy stability at the federal level. What is still needed, says Hornung, are firmer targets and clearer paths to meeting provincial procurement plans that total close to 10,000 MW by 2015. And ongoing challenges over integration, interconnection, transmission access, sound, and environmental impacts will continue to face the industry in 2007. There is still a lot of plugging away left to do, says Hornung. We are not yet an established industry. We are an emerging industry and were going to be for a while yet. But we have taken great strides, I think, in terms of putting in place a number of foundational pieces that can help us to become an established industry.

TransAlta signs contract for 75 MW New Brunswick project

FREDERICTON New Brunswick Power has announced the first winning project in its plan to add 200 MW of wind power to its grid, signing a power purchase agreement with Calgarys TransAlta Corporation for the output of its $130 million, 75 MW Kent Hills project. The project, made up of 25 Vestas V90 3 MW turbines mounted on 80-metre towers, will be located about 32 kilometres southwest of Moncton. It is subject to regulatory and environmental approvals, but is expected to begin construction in early 2008 and reach commercial operation by the end of that year. Nova Scotia-based Natural Forces Technologies Inc. is TransAltas development partner in the project. TransAlta CEO Steve Snyder says wind power is an integral part of the companys growth plan. Weve been building wind farms in Western Canada for 10 years and see this as an opportunity to expand our wind power expertise into a market that has expressed a desire for clean, renewable energy. TransAlta, which has a portfolio of 50 power plants in Canada, the US, Mexico, and Australia totalling nearly 9,000 MW of capacity, got into the wind business through its acquisition of Calgarys Vision Quest Windelectric in 2002. The Kent Hills project will bring its installed wind capacity to about 260 MW. The Kent Hills contract is the first of several that New Brunswick Power expects to sign in the near future, says utility spokesman Michel Losier. I wouldnt say tomorrow or next week, but I would say within the next quarter we will likely see other announcements. The utility issued a request for expressions of interest in October 2005 for up to 400 MW of wind to be installed at an average of 40 MW a year over 10 years. But it decided to accelerate its purchases, and in August 2006 announced it would be signing contracts with multiple developers for 200 MW to be in operation by 2009. Losier says New Brunswick Power sees wind as a good fit. It is a good complement to our mix of energy sources. It has a low environmental impact and is becoming more competitive, especially with what we are seeing with fuel prices, he says. That is why we want to take this first 200 MW by 2009. We want to learn, and we want to grow from there. The utility signed a contract in 2004 with Eastern Wind Power for a 20 MW project that has yet to be built. They were having difficulty early on acquiring the wind turbines, says Losier. Obviously there is a good wind regime there and there is a viable project, but at this point it is not active. It is unlikely that initial contract will come to fruition.

February 2007 WindSight 5

Nova Scotia Power plans 130 MW request

HALIFAX Nova Scotia Power (NSP) will issue a request for proposals for another 130 MW of renewable energy and expects most of the new electricity, to be in place by the end of 2009, to come from wind. The utility unveiled its plans in December, saying it would release technical details in January. It continues along the renewable energy track weve been following, says NSPs Margaret Murphy. Our intent is to go out for more because we just see this as a continual process. NSP currently has just over 59 MW of wind either installed or in the process of commissioning. It had hoped to get significantly more from two RFPs issued in 2004, but in December, Acciona Wind Energy Canada announced its 31 MW Amherst project would not go forward as planned. Turbine price hikes of more than 25% in the last year alone and the lack of a formal announcement from the federal government about the continuation of the wind power production incentive (WPPI) program or a replacement incentive has led Acciona to determine that it will not be able to meet the economic terms of the original sales contract signed with Nova Scotia Power, the company said in a news release. Submitting a new bid to Nova Scotia Power when the company issues another solicitation for wind power provides Acciona Energy Canada with the best opportunity of completing the Amherst Wind Energy Project. NSP also cancelled the contract of Wind farm construction in Nova Scotia will continue with Nova Scotia Powers recently announced plan to acquire more renewable energy. Pictured above, construction of a developer planning to install 6 Enercon E70 turbines at Cape Breton Powers Lingan site. MW of turbines in a disagreement over a performance bond. Neither situation has generated any concerns within the utility about wind, says Murphy. You have to expect, if youre going to go out to the marketplace, that youre going to have to let market forces work. In fact, she says, NSP expects wind power to dominate the bidding in the upcoming RFP. Obviously the favourite, the most popular technology is wind and thats because the technology is there. Its commercial. With the run up in oil and gas prices in recent years, she adds, wind has become a competitive source of generation. Right now, our wind-powered electricity is less expensive than some of our higher priced fossil fuel options, Murphy says. But the biggest advantage it has is price stability. The price is known and there is virtually no other fuel that provides that. At the same time, NSP has argued against the provincial governments plan to require NSP and the provinces six municipal distribution utilities to acquire 5% of their electricity from new renewable energy sources by 2010 and 10% by 2013, which added to existing hydro, biomass and tidal power, would mean nearly 20% of Nova Scotias electricity would come from renewables in six years. In a five-page response to a draft regulation outlining the plan, NSP said the 10% target may not be technically achievable. Assuming the target was met with wind, and given the technologys capacity factors, the utility expects a total installed capacity of 500 MW,
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February 2007 WindSight 6
Cape Breton Power

Province sets mandatory renewable energy targets

(Continued from page 6)

about 20% of the total existing generating capacity in the province. There are not adequate electricity sources which have the necessary speed of response to follow the intermittent nature of coastal winds to maintain electricity voltage and frequency requirements, says the utility The cost of backing up the wind with gas-fired combustion turbines would cost an estimated $23 million per year, argues NSP, while the added cost of dispatching the system uneconomically to accommodate wind could range between $30 and $60 million per year. Murphy says the latest RFP will bring the utility very close, if not to, the first-phase target of 5%. All were really saying about the second phase is we are willing to put 130 MW more on the ground and then lets have a look and see how that works. Lets step back and maybe evaluate it at that stage, she explains. We want to have Canadas Wind Tracker the best possible integration of the wind resource into our existing system. Thats our goal. Province Installed Proposed* CanWEAs policy and government relations director BC 0 325.2 MW Sandra Schwartz disagrees with the utilitys assessment of Alberta 384.97 MW 134 MW both the cost and feasibility of the 10% target. If they Saskatchewan 171.18 MW 24.75 MW have concerns, well, they need to be working with the wind energy industry to deal with those concerns, she says. Manitoba 103.95 MW 0 MW Schwartz points out Nova Scotia has strong geographic Ontario 413.71 MW 865.35 MW distribution of wind resources and wind projects, which Quebec 321.75 MW 1105.5 MW helps alleviate variability and reliability concerns. And it Newfoundland 390 kW 51 MW can be mitigated as well. That is the other side. Were PEI 43.56 MW 28.8 MW learning in other provinces there are mitigation measures Nova Scotia 49.26 MW 23.2 MW that can be put in place as well, she says. New Brunswick 0 95 MW NSPs response to the draft regulation also argues it Yukon 810 kW 0 should not be excluded from competing to supply NWT 0 0 renewable electricity under the new standard. The Nunavut 0 0 regulations should not prohibit any party from submitting Total 1489.58 MW 2652.8 MW bids to supply energy through an arms-length process fair to all participants. This approach will ensure Nova * Under construction or awarded a PPA Scotians receive the best value. Murphy says the utility is just trying to keep its options open. The coming RFP will be directed at independent producers, an approach that Murphy says has served the utility well to this point. The province has a wide range of wind turbine technology in place over a diverse set of sites that stretch from Higgins Mountain near the New Brunswick border to Pubnico Point, which juts into the Atlantic Ocean on the provinces extreme south shore. There are huge benefits from having independent power producers go out with their own expertise, their own research, their own knowledge, and their own abilities to explore technology, says Murphy. The Nova Scotia government announced in late January that it had passed the regulations setting the mandatory targets. To meet the 2010 target, it says, only independent power producers will be able to bid on new renewable projects, although the utility will be able to build its own facilities to meet the 2013 goal. Electricity utilities will also pay a penalty up to $500,000 a day for failing to meet these targets. It also passed a regulation allowing Nova Scotias six municipal utilities to purchase power directly from independent power producers starting February 1. Energy Minister Bill Dooks says he is also looking at additional options for independent power producers to sell green energy, a process he hopes to complete by spring.
February 2007 WindSight 7

Newfoundland utility selects second project

ST. JOHNS Newfoundland and Labrador Hydro (NLH) has chosen Vector Wind Energy to supply it with electricity from the 24 MW Fermeuse Wind Project, and has finalized a 20-year power purchase agreement with NeWind Group for its St. Lawrence project, which means the utility now anticipates more than 50 MW of new wind generation will be installed on the Island of Newfoundland before 2009. The province possesses a world-class wind resource and we are looking very closely at how wind can be a significant part of our energy future both on the island and in Labrador. These two projects are an important first step in our development of renewable long-term energy supplies, says Minister of Natural Resources Kathy Dunderdale. The next step, says NLH, is to conclude the power purchase agreement. The Fermeuse projects 12, 2 MW turbines will be located on the Avalon Peninsula about 60 kilometres south of St. Johns and are expected to be operational by the end of 2008. Vectors win came at a time when the company was in the process of being acquired by Calgary-based Canadian Hydro Developers. The sale, for cash proceeds of $5.3 million, was closed on December 21, making Vector a wholly owned subsidiary of the veteran developer. CEO John Keating says Canadian Hydro is still getting up to speed on Fermeuse so he could not comment on the project details. The guys have done an awful lot of work in Newfoundland. The project has a high capacity factor and its an incredible site not that far from St. Johns. It has got some really nice attributes. One aspect of the agreement Canadian Hydro wants to understand better, says Keating, is a provision allowing NLH to purchase the project at the 10, 15 and 20 year points of the contract term. NLH says it is designed to reduce risk to electricity customers by having private developers take on the development risk while getting a commensurate payback from their investment. Clearly if the project fails, electricity customers do not bear the risk because NLH does not bear the risk. If the project succeeds, customers get cost-effective, clean energy and Hydro has the ability to purchase the operation, says Jim Keating, NLHs vice-president of business development and no relation to the Canadian Hydro CEO. The provision was part of the original RFP and also applies to the St. Lawrence project. The purchase price is negotiated as part of the initial contract. NeWind, a subsidiary of Massachusetts-based Enel North America, also plans to have the 27 MW St. Lawrence project, on the Burin Peninsula on the south coast of the island, operational by the end of 2008. Enel spokesperson Julie Smith Galvin says a turbine supply agreement is still under negotiation but the company is considering installing nine 3 MW machines. St. Lawrence Mayor Wayde Rowsell is pleased about the recently announced conclusion of the NeWind-NLH deal. The winds of change are blowing in the right direction for us - towards economic renewal, community sustainability, and environmental progress for our community and the province, Rowsell said in a news release. Echoing the comments of Minister Dunderdale, NLH CEO Ed Martin said the utility is leveraging a worldclass wind resource for the benefit of its electricity customers. Our two wind projects on the island will bring more clean, cost-effective power; reducing air emissions and helping clean up our environment, he said. In fact, once operational, the two wind projects will offset more than 300,000 barrels of oil annually that would otherwise have gone to NLHs Holyrood Thermal Generating Station, and they are expected to beat the cost of oil-fired generation over their 20-year terms. NLH would not say what it is paying for wind power from the project, at least until the contract for the Fermuese project is finalized. To do so would compromise our negotiating position, explains Martin. We expect to conclude those negotiations in February, at which time we will release the additional pertinent details. The St. Lawrence project is the result of an NLH request for proposals for 25 MW of wind power issued December 2005. It was chosen from seven bids. Fermeuse was one of six proposals submitted for the second RFP, also for 25 MW, which closed at the end of October.
Feburary 2007 WindSight 8

Saskatchewan considers major role for wind power

MLA ADVISES GETTING STARTED EARLY IS IMPORTANT IN SHIFT TOWARDS RENEWABLE ENERGY
REGINA Saskatchewan should target the installation of 500 MW of wind power by 2015 and focus future planning on overcoming integration challenges at pentration levels beyond that mark, says a new report on the provinces renewable energy options. Saskatchewan has a vast wind resource that could ultimately generate between 15 and 20% of our electricity needs, if integration issues are satisfactorily overcome and if some additional transmission capacity is developed, the report says. Wind power is economically attractive and will readily compete on price with other electrical generation options. Medium term planning work should therefore focus on overcoming wind power integration challenges at higher levels of wind penetration than 500 megawatts. The 2015 target is one of 32 recommendations in the report by Saskatoon Greystone MLA Peter Prebble, who was appointed to the position of Legislative Secretary for Renewable Energy Development and Conservation last May and charged with the task of outlining how the government can achieve its vision of supplying one-third of the provinces overall Wind power is economically energy needs from renewable sources by the attractive and will readily third decade of this century. compete on price with other The report, presented to Premier Lorne Calvert electrical generation options. December 13, looks at renewable energy and - Peter Prebble conservation options in the electricity sector. The next step will be for the premier and his cabinet to decide how to proceed, says government spokesman Karen Schmidt. Its up to the government to decide what recommendations it will adopt and when. In a news release, Calvert said the report provides important options to consider in the months ahead. In the report, Prebble points out some European jurisdictions are rapidly approaching 20% wind power penetration levels. Given the outstanding wind regime we are blessed with in Saskatchewan, SaskPower should be asked to adopt a carefully planned but equally vigorous approach. He recommends the utility establish a world class wind power integration unit to recruit and develop expertise in all facets of wind power. A key step in getting to 500 MW and beyond will be to determine where to strategically locate wind farms to take advantage of diverse wind regimes, Prebble says. He wants SaskPower and the Saskatchewan Research Council to work together to identify complementary wind regimes in the province and provide a preliminary report within 18 months and a final report within 30 months. To date, this kind of mapping work has not been done, the report says. The final results should be publicly available and should be used by SaskPower to help finalize major new wind power facility locations. SaskPower should also carefully examine the potential to more fully utilize existing natural gas generation to back up wind. The combination of green wind power and back up natural gas electrical generation should be viewed as a major option for meeting baseload electricity supply needs, the report says. The utility should also consider a role for First Nations and for private producers in its wind power planning, Prebble says, pointing out independent developers may be able to access federal tax programs to deliver lowerpriced electricity. A limited role for independent power producers would also help SaskPower avoid undue debt as it expands its renewable energy portfolio. One avenue for IPP project development that should continue, with a new target of 200 MW over six years, is the utilitys environmentally preferred power (EPP) program, says the report. The program, it says, pays a 1/ kWh price premium for electricity from small-scale projects. But with Ontario now offering a standard offer price of 11/kWh for electricity from renewable energy projects less than 10 MW in size, Prebble warns

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Feburary 2007 WindSight 9

Report recommends 50% renewables target

(Continued from page 9)

Saskatchewan will have to take steps to ensure it can compete. This will influence where mobile capital chooses to invest in renewable energy development in Canada. While Saskatchewan does not need to offer 11 cents, if we want to facilitate investment in high environmental performance renewable electricity projects, we will have to increase our price offers. A standard offer of at least 9/kWh should be considered, the report says. The province should also implement a net metering program that would allow customers to generate their own power and send any excess electricity back to the grid for credit. With renewable energy now contributing only about 2% of total energy use in Saskatchewans building and transportation sectors, says Prebble, those areas are unlikely to meet the one-third goal. To reach an overall target of 33 per cent renewable energy by the third decade of this century, the electrical sector will need to achieve well in excess of one third renewable energy. The report recommends the government establish a legislated mandate requiring that a minimum of 50% of Saskatchewans electricity come from renewable energy sources and conservation measures by 2025. The new standard would include existing hydro and wind, which currently make up about 29% of the provinces total installed generating capacity. SaskPower is forecasting a demand of 4,000 MW by 2024, up about 700 MW from its current peak. More than 1,000 MW of existing fossil fuel generation will need to be replaced or upgraded over the same time frame. Prebble predicts there will be a significant shift towards energy conservation and renewable energy in North America over the next 20 years, driven by concerns over greenhouse gas emissions. The scientific community is ahead of the public and governments on the climate change issue. They will be recommending sufficient fossil fuel reduction to cut greenhouse gas emissions by at least 70% within decades, the report says. In this context, getting started early is important. Saskatchewan should lay the foundation for an energy efficiency and renewable energy economy now by planning to make substantial investments in a cost-effective and carefully planned manner every year over the next decade. Those investments bring other benefits as well, the report says, including energy security, rural economic renewal and job creation. The report also recommends a number of tax credit, grant and loan programs to assist homeowners, small businesses, municipalities and non-profit organizations install renewable energy systems, as well as major investments in conservation initiatives.

CanWEA makes progress on Alberta integration limits

CALGARY CanWEAs Alberta caucus is encouraged by the efforts of the Alberta Electric System Operator (AESO) to refocus the dialogue on integrating wind power into the provinces electricity grid so that a 900 MW threshold on project development can be removed, says policy and government relations director Sandra Schwartz. Industry members met with senior managers from the AESO in December to discuss how the two groups can work together to develop the tools needed to facilitate wind integration. Our ultimate objective in this meeting is to refocus the dialogue with industry to integrate as much wind into the Alberta system as feasible without compromising system reliability or the fair, independent, and openly competitive operation of the market, AESO CEO Dale McMaster said in a November letter to CanWEA. The commitment, says Schwartz, is a step forward. Theyve committed to working with us to look at ways to get rid of the threshold and that is very significant, she says. Its significant because it shows theyre serious about integrating more wind, that theyre serious about working with the industry to look at
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February 2007 WindSight 10

Wind threshold having impact on other jurisdictions

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ways wind can be brought into the Alberta system. Its showing movement. The AESO imposed the 900 MW cap in an April 2006 letter to industry stakeholders, saying it would not connect wind capacity beyond that mark until appropriate mitigation measures were established to ensure system reliability is not jeopardized. But wind producers countered the decision was premature, based on limited data and sent the wrong message to both policymakers and producers about the feasibility of wind development in the province. It is a message, says Schwartz, which is now migrating into other jurisdictions in a way that is potentially detrimental to the industry. The 900 MW threshold as an issue has gotten legs elsewhere in Canada. When there are reports questioning wind, they cite Alberta and this cap. Were saying this had better be removed quickly because its going to impact business elsewhere, she says. Its a worrying trend because we think we are dealing with this issue in Alberta, and thats not necessarily what is reported. At the December meeting, the AESO and CanWEA agreed to work together to draft an operational and market framework for wind integration in Alberta expected to be finalized sometime this spring, as well as a wind integration impact assessment model and sensitivity analysis that will examine both the costs and the benefits. Working groups will be formed to more closely examine mitigation options like forecasting, new balancing services and power management. The two groups also agreed to hold a joint meeting with Albertas deputy energy minister to discuss the issues facing wind development in the province. They are also cooperating on a trial of wind forecasting methods expected to get underway by the end of March. While removal of the threshold is a priority for the Alberta caucus, says Schwartz, members held a strategy meeting in November to discuss how to deal with other issues that impact the market for wind in the province. We came up with a short list of action items and then tasked teams of CanWEA members to start thinking them through, says Schwartz. Transmission is a key concern, especially with a planned new line out of the congested southwest caught in a regulatory limbo. So, too, is the lack of wind or renewable energy policy in the province. Now is the time, says Schwartz, to try and remedy that. The new government has indicated an interest in developing that type of policy. Other caucus priorities include developing a government relations strategy and finding ways for producers to realize value from the environmental benefits of wind generation.

CanWEA develops sound recommendations

OTTAWA CanWEA is developing a set of best-practice guidelines to help both municipalities and project developers deal with the issue of sound from wind turbines in a balanced way. Sean Whittaker, CanWEAs policy and technical director, says the association hired HGC Engineering of Mississauga to review current practices and develop guidelines that can be used to harmonize Canadian sound standards going forward. What were seeing is different jurisdictions are putting in place regulations and rules regarding sound and wind turbines. In the absence of a national reference point or best practice, what were starting to see is this patchwork across the country of different requirements, and that causes a great deal of concern for the wind industry, he explains. Another concern, adds Whittaker, is the ratcheting of requirements as jurisdictions look around to see what
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February 2007 WindSight 11

No regulatory silver bullet to deal with sound

(Continued from page 11)

others are doing. What sometimes happens is regulatory officials will err on the side of caution and impose requirements that are unnecessarily restrictive, to the detriment of both the wind industry and communities hosting wind turbines. British Columbia, says Whittaker, is a case in point. There, officials recently developed a draft set of regulations dealing with sound from wind turbines. After reviewing jurisdictions from around the world, they used the most restrictive as a reference point and planned to require setbacks of 1,000 metres, not just from residences but also from residential property lines. CanWEA, says Whittaker, has since been working with the BC government to develop guidelines that are closer to the HGC recommendations. The science of sound and sound propagation are very complex matters. Theres no silver bullet in terms of a setback distance. In fact, the need to deal with each wind farm on its own merits was a key conclusion of the HGC report. Topography at the site, the number and placement of turbines, the model of turbine and ambient sound levels in the area are all variables that need to be taken into account, says the report. HGC looked at jurisdictions in Canada and around the world and determined Ontario, which is the only province with noise assessment guidelines specific to wind turbines, provided a good starting point. The CanWEA best practices draw a great deal from the Ontario guidelines, says Whittaker. Ontarios guidelines set acceptable sound levels as a function of wind speed. What often happens is that at higher wind speeds, there is greater sound from the turbine. But what also happens is ambient sound levels also increase and in many cases can be greater than the turbine itself, says Whittaker. Ontario also specifies measurement protocols developers must use to show their project layout will satisfy the requirements. It really just lays it all out so the process is transparent for everyone involved. CanWEAs draft best-practice guidelines have been sent to all members of CanWEAs caucuses and committees, he says. We received a number of comments and now were going to be reviewing those comments and integrating them into the document. CanWEA also asked HGC to examine the issue of infrasound, which is garnering increasing attention in the media as wind project proposals multiply and opponents question whether low-frequency sound emissions from turbines can have adverse health impacts. Infrasound has a frequency content below the threshold of human hearing, generally held to be about 20 Hz. But with sufficiently large amplitude, says HGC, it can be felt and heard as vibration. While perceptible levels of infrasound can be unsettling and objectionable, there does not appear to be any reliable evidence that adverse impacts on the body occur when amplitudes are below the level of hearing. When it comes to infrasound and wind turbines, says Whittaker, HGCs conclusions were quite conclusive. They determined infrasound is not an issue of concern. They were unable to find any scientific evidence that indicated that infrasound from wind turbines had an adverse effect on human health or the environment, says Whittaker. An analysis conducted by HGC at Nova Scotias Pubnico Point Wind farm yielded similar results. The study was commissioned by Natural Resources Canada after nearby resident Daniel dEntremont complained that infrasound from the turbines, one of which is located about 330 metres from his house, caused fatigue, headaches, sleep disturbance and other health impacts in family members that were severe enough to drive them from their home. But measurements by HGC found infrasound is not an issue. Sound at infrasonic frequencies is not present at perceptible levels near the wind turbine generators nor at the dEntremont residence, the report says. Gordon Whitehead, an audiologist and retired adjunct professor at Dalhousie Universitys Graduate School of Human Communication Disorders, conducted his own tests at the dEntremont residence. While he found similar levels of low-frequency sound in and around the home as HGC, he has a different take on what it means. The commissioned report appeared to be very professionally completed. It was interpreted, in my estimation, from an engineering perspective. My report was interpreted from an audiological perspective, he says. While infrasound may not be heard, he argues, it can still be perceived. This author is quite firmly of the opinion that infrasonic sound has the capability of causing dysfunction of the vestibular system (balance portion of the ear),
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February 2007 WindSight 12

Studies conclude turbine infrasound not an issue

(Continued from page 12)

especially in persons susceptible to motion sickness, his report notes. Vestibular dysfunction can produce symptoms like those experienced by the dEntremont family, he says, although he recommends they should be tested to rule out other causes. For Whittaker, it is important that assessments like Whiteheads be subject to peer review by experts in the field. If there is any study that comes out that indicates infrasound is an issue, then we encourage them to submit it to a scientific journal so it can be reviewed by their peers. This is how a scientific consensus is generated, he says. Its important to say right up front that if this is an issue, we want to be the first to know. Its not in the wind industrys best interest to pursue projects if they have an adverse impact on the environment or on human health. But from all science-based, peer-reviewed articles there is nothing to indicate it has any impact. HGC also looked at levels of audible sound at the dEntremont residence and, since Nova Scotia has no technical guidelines for assessing the sound impact of wind turbines on residences, assessed them against Ontarios guidelines. While the sound of turbines is audible, much of the time it is not appreciably above the numeric criteria derived under the guidelines of the Ontario Ministry of the Environment, the report concludes. However, under certain wind and atmospheric conditions most notably when there are light winds from the south and the humidity is high the sound level impact of the wind turbine generators is significantly greater than the background sound levels. NRCans Jimmy Royer says the department, which provided funding to Pubnico Point through its wind power production incentive program, is working with the wind farms owner to find the best way to mitigate noise that may be more perceptible during certain weather conditions. At this point it is too early to state what these actions will be and when they will be applied.

Energy Probe draws from inadequate data, says CanWEA

TORONTO A recently released Energy Probe study questioning wind energys contribution to the Ontario grid does not have robust enough data to draw the conclusions it does, says CanWEA president Robert Hornung. The study, titled Review of Wind Power Results in Ontario: May to October 2006, took synchronized wind production and load data assembled from raw data produced by the Ontario Independent Electricity System Operator (IESO) and found the average capacity factor of the Melancthon, Kingsbridge and Erie Shores wind projects to be 22.3%. It also concluded the periods of high and low production were out of synch with periods of high and low demand in the province. The study goes on to predict the outlook for annual average capacity factors for the entire Ontario wind fleet of large wind farms for the year April 2006 through March 2007 is likely to fall in the range of 24% to 27%. Energy Probe is concerned that a clean and promising generating technology is being burdened with unrealistic forecasts of reliable production at times of high electricity demand that are not consistent with the actual production experience. But Hornung says the study, by Energy Probe executive director Tom Adams, is methodologically flawed. It is a totally inadequate data set from which to draw any conclusions. It is inadequate because it is only seven months. It is inadequate because it is only three wind farms and because those projects are all located within close proximity of each other, he says. Its conclusions about what will happen annually are problematic because obviously it left the key production months out. Energy Probe also tries to indicate wind energy has lousy capacity factors by pointing to examples from Canada and Germany, says Hornung. But it ignores data for 14 operating wind farms receiving funding under the federal wind power production incentive program that have an average capacity factor of 32%. Thats a bit of an unfair and very selective representation, he says. Adams also concludes two previous forecasts of wind powers contribution to reliable Ontario generation capacity during the summer significantly overestimated the value of wind power relative to the experience
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February 2007 WindSight 13

Issue illustrates need to provide good information

(Continued from page 13)

during 2006. One of the forecasts Energy Probe referred to was conducted by GE Energy on behalf of CanWEA, IESO and the Ontario Power Authority, and contrasting it with the limited Energy Probe data is like comparing apples and oranges, says Hornung. GE used data from 34 met towers around the province to conclude an installed wind power capacity of 5,000 MW would have minimal impacts on the operation of Ontarios power system. It found the average capacity value for wind during Ontarios summer peak ranges from 16-19%, increasing to 38-42% during the winter months. Adams found that during July and August production fell below 2% for 18.6% of the hours. These very low production hours were about as likely to occur during the daily peak period as any other time during the day. The Energy Probe study received a fair amount of coverage in the media, and Hornung has followed up with journalists to provide the industry perspective. Its out there. We have to deal with it now. Its one study among many that people who have concerns about wind energy will go to. It comes back to the public outreach question and ensuring good information is made available for all stakeholders.

Income trust rules gain clarity, ease fears

OTTAWA The federal governments bombshell announcement that it plans to tax distributions from publicly traded income trusts and limited partnerships at corporate rates is unlikely to have a significant overall impact on the growth of Canadas wind power industry, say experts in the field. Finance Minister Jim Flaherty served notice of the new tax plan October 31, saying it was necessary to stem a growing tide of corporations converting to income trusts. Trusts pay little or no corporate tax, instead passing on the bulk of earnings to investors, who are taxed individually. The new measures will come into effect in 2011 for existing trusts and 2007 for those that begin trading after October 31. The announcement hit the sector hard, with its market value dropping by about $20 billion the day following the announcement. But since then Flaherty has provided more details of his plan, including issuing There is no doubt in anyones guidelines in December outlining exactly what he meant when he warned existing trusts against mind there are going to be undue expansion during the transition period. mergers and acquisitions going They will be allowed to double in size by 2011, on, at least in our space, in the increasing their market capitalizations at a rate of power and utilities sector. 40% in 2007 and 20% in each of 2008, 2009 and - Dave Kerr 2010. Things have calmed down now and weve seen the market calm down too. People are not as nervous, says Algonquin Power Income Funds Dave Kerr. The Algonquin Power Income Fund owns and has interests in 85 power generating and infrastructure assets across North America, including the 99 MW St. Leon wind farm in Manitoba. In recent years income trusts like Algonquin have become a growing force in the development of wind power projects across the country, and Kerr expects that to continue. The changes that have been proposed for us do not come into effect until the end of 2011, so we have four years to see where we are. And then the undue expansion rules really dont limit us very much. We can carry on business like we always have, he says. Algonquin has a market capitalization of close to $1 billion, says Kerr, leaving it plenty of room to grow within the federal guidelines.

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February 2007 WindSight 14

New rules could have impact on liquidity options

(Continued from page 14)

I think you will still see income trusts participating in wind development and projects, and the reason I say that is that is probably where most of the non-utility type development is going. Most of the stuff youre seeing right now in terms of new generation being built is wind, he explains. We have a large engineering group and environmental group here that have a lot of internal expertise in both the operation of wind facilities and the technical aspects of development, and we still have access to capital, which is key. So were looking at opportunities now that were good before October 31 and are still good after October 31. One thing the new tax measures will drive is consolidation within the sector, predicts Kerr. You have got to strategize to make yourself stronger as a corporation for 2011. Some of the smaller guys probably cant get enough critical mass in four years to become a stable corporation. So there is no doubt in anyones mind there are going to be mergers and acquisitions going on, at least in our space, in the power and utilities sector. The changes could also have an impact on one of the avenues wind power producers have to finance the development phase of their projects. Over the past several years, a number of companies have created flow-through limited partnerships to take advantage of the governments Canadian Renewable and Conservation Expense (CRCE) program. CRCE allows developers to write off certain eligible expenses, including the installation of test turbines, and flow deductions through to investors. While the new rules will still allow developers to raise capital using LPs, says Darin Renton of the Toronto law firm Stikeman Elliott LLP, there are now questions about what happens once the test phase is complete. I think the issue and the largest impact on wind farm development is going to be the liquidity event, the exit event. What are you going to do with that partnership once the CRCE phase is done? Units in flow-through LPs do not trade on secondary markets, so the partnerships have traditionally provided liquidity for investors by either listing on a stock exchange or selling to an income trust. Algonquin, one of the promoters of the AirSource Power Fund I LP that raised $65 million to help finance St. Leon, provided liquidity by rolling the project into the income fund through a transfer of units. Under the new rules, says Kerr, it could use the structure again. Its not an issue for us. Right now were a large income fund with capitalization of almost a billion dollars. Were highly traded. Were very liquid, and we had the success of Airsource. But some other trusts, he says, may not be big enough to do the same. And the new rules mean LPs will no longer be able to publicly list without being subject to income tax. It changes the opportunities, says Kerr. John Douglas, CEO of Toronto-based Ventus Energy sees other options to provide liquidity to investors in the companys Ventus Energy West Cape Windpower LP. Ventus launched its IPO after Flahertys announcement and closed it in December, raising $25 million. The projects CRCE phase, made up of 11 Vestas 1.8 MW turbines, is expected to come on line by the second quarter of 2007. The remaining 44 turbines in the infill phase are expected to be operating by the third quarter of 2008. Weve committed to creating a liquidity event within 12 months of commissioning the infill phase. We either sell the asset or we take it public, he says. Of the handful of people that might be interested, I would put income trusts at the bottom of that list and I would have had them there anyway pre-Halloween. I would put the large international energy company with a focus on renewables that wants to expand geographically at the top of the list. Then I would put even financial buyers focused on energy at the top of that list. Douglas believes West Cape has some features that will make it attractive to potential buyers. Most of the projects electricity output will be sold into the northeastern US at the New England Power Pools (NEPOOL) prevailing market rates, while the renewable energy credits can be sold into the Massachusetts market. In our effort to maximize cash flow and revenues, we like the NEPOOL. It gives us access to additional revenue streams that we otherwise wouldnt have here in Canada, namely the RECs, which are trading for almost the same price as the electricity. And a third revenue stream that we can realize are capacity payments for simply being connected. He points out that gas-fired generation makes up about 40% of NEPOOLs generation and sets the market price 87% of the time. I think people, the people we are talking to anyway, want that exposure. They think, like us, that prices are going higher.
February 2007 WindSight 15

Stratgie largie pour lolien : encore ncessaire

(Suite de la page 1)

objectif la mise en place dune capacit de production de 4 000 MW provenant de sources dnergie renouvelables qui comprennent lolien, la biomasse, les petites centrales hydrolectriques et lnergie des ocans. Le programme versera 1 /kWh pour les dix premires annes de la dure dun projet, ce qui reprsente 1,48 milliard $ sur plus de 14 ans. Mme si lobjectif global dcoNERGIE est moindre que le plan mis de lavant par les libraux dans leur budget de 2005, lequel prvoyait le financement de 3 000 MW de nouvelle capacit de production olienne et dune capacit de 1 500 MW produite par dautres technologies dnergie renouvelable, lindustrie olienne ne devrait pas perdre de terrain. Un document de discussion projet dcrivant les modalits prvues pour coNERGIE devait recommander que, de la capacit de production vise dans le cadre du programme, il y ait 3 000 MW qui proviennent de lolien. Le prsident de lAC, M. Robert Hornung, a applaudi lannonce, indiquant que cela met fin lincertitude qui rgnait dans lindustrie depuis le gel par le gouvernement Harper du financement du prolongement prvu pour le programme dencouragement la production dnergie olienne, le printemps dernier. Nous sommes heureux que lincertitude soit dissipe. Cela avait des rpercussions Je pense quil y aura un bien relles. Un projet a t annul pour intrt bien solide chez toutes lequel ce problme en particulier a t mentionn et plusieurs promoteurs de projets les parties en vue de sassurer ont d grer le risque associ au fait de ne que le processus aille de pas savoir si oui ou non ces fonds seraient lavant le plus rapidement disponibles, alors quon avait compt sur possible - Robert Hornung eux , dit-il. Il ajoute que cela a aussi eu des rpercussions ngatives sur les investisseurs qui cherchaient de la stabilit sur le march canadien. Mais lannonce fournit maintenant un cadre de travail politique stable jusquen mars 2011, ce qui est trs positif. Une fois de plus, cela montre un solide engagement du fdral envers le dveloppement de lnergie olienne et une volont dappuyer les gouvernements provinciaux dans leur poursuite dobjectifs pour lnergie olienne. En mme temps, M. Hornung souligne que les provinces ont des objectifs dapprovisionnement et des plans dachat en place qui totalisent une capacit de presque 10 000 MW dici 2010, soit bien plus que lobjectif dcoNERGIE. LAC, dit-il, pense que le gouvernement fdral pourrait en faire encore plus pour appuyer ces efforts. Nous prvoyons que le financement du programme coNERGIE fera lobjet dun engagement complet bien au-del de 2010. Il est ncessaire de rflchir autant aux mesures complmentaires que futures. Il peut tre ncessaire dtendre encore plus ce programme dautres faons, par exemple, par lintermdiaire du systme fiscal. Le gouvernement fdral pourrait offrir de laide aux gouvernements provinciaux pour comprendre, rgler et supprimer certains des obstacles du dveloppement de lnergie olienne. Il y a de nombreuses possibilits diffrentes et nous allons consacrer un peu de temps y rflchir , dit-il. LAC veut collaborer avec le gouvernement fdral en vue de mettre en place une stratgie dnergie

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fvrier 2007 WindSight 16

Dtails du programme finaliser

(Suite de la page 16)

olienne en profondeur pour le Canada, soit quelque chose que Ressources naturelles Canada, dans sa rponse au rapport de 2006 du commissaire lenvironnement fdral, a dit vouloir aussi poursuivre. Nous avons hte de rencontrer les reprsentants du gouvernement et de commencer y travailler , dit M. Hornung. Tout en accueillant bien lannonce dcoNERGIE, la coalition Air Propre nergie Renouvelable a aussi indiqu quil faut en faire encore plus. Elle a mis au dfi tous les partis politiques canadiens endosser une cible dencouragement de production dnergie verte dune capacit de 12 000 MW. Pour crer une industrie, il est ncessaire davoir de la certitude, le type de certitude qui proviendrait dun engagement de lordre de 12 000 MW de la part du gouvernement fdral , indique John Keating, chef de la direction de Canadian Hydro Developers Inc., de Calgary. Avec la certitude viendra le niveau dinvestissement requis pour mettre le Canada sur la carte de lnergie verte. Les dtails relatifs la faon dont lInitiative coNERGIE sera mise en oeuvre doivent encore tre rgls, mais M. Hornung sattend ce que cela se fasse rapidement. Je pense quil y aura un intrt bien solide chez toutes les parties en vue de sassurer que le processus aille de lavant le plus rapidement possible , dit-il. La raison en est que lannonce elle-mme ne garantit pas la mise en oeuvre. Il faudra encore faire une prsentation au Conseil du Trsor en vue dapprouver officiellement loctroi du financement. La raison pour laquelle le programme EP na pas t prolong est que cela na pas t fait temps. Et, videmment, il y a actuellement beaucoup de spculations relativement une lection au Canada.

Grands pas et nouveaux dfis pour lindustrie

PLUS DU DOUBLE DE LA CAPACIT EN PLACE EN 2006, MALGR LES PROBLMES POLITIQUES ET DE RGLEMENTATION

OTTAWA Lindustrie olienne canadienne a connu en 2006 ce que le prsident Robert Hornung dcrit de formidable anne de perce dcisive , alors que la capacit totale en place au pays a plus que doubl suivant lachvement de 21 projets dans six provinces. Lindustrie a mis en place une capacit de production de 776 MW, ce qui a port la capacit totale de production olienne de lensemble du pays prs de 1 460 MW la fin de lanne. Ce fut une anne o nous sommes passs un niveau de productivit beaucoup plus lev que nous pensons pouvoir maintenir dans le futur. Il sagit, je pense, dun indicateur rel du type de potentiel qua le Canada pour les prochaines annes en en ce qui concerne le dveloppement de lnergie olienne , dit M. Hornung. LOntario a pris la tte en 2006, avec la mise en service de six projets, dune capacit combine de 399 MW, pour se trouver en premire place parmi les provinces. Mais il y a aussi eu des tapes cls dans dautres provinces. Au Qubec, le parc olien Baie-des-Sables, dune capacit de 109,5 MW et constituant le premier des huit projets slectionns dans le cadre du premier appel doffres de la province pour de lnergie olienne, a dbut ses activits. Il sagit l dun signe de ce quoi on peut sy attendre , dit M. Hornung. En ce qui concerne laugmentation importante de nouvelles installations, cest la Nouvelle-cosse que reviennent les honneurs. La province a ajout neuf projets totalisant 13,4 MW son rseau lectrique, soit un signe, prcise M. Hornung, que lnergie olienne peut se dvelopper diffrents niveaux et selon divers modes au Canada. Le Manitoba a connu lachvement de son premier projet olien en 2006, tandis que la
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fvrier 2007 WindSight 17

Le march attire lattention internationale

(Suite de la page 17)

province voisine de la Saskatchewan a termin linstallation de son plus gros projet. Et malgr les dfis de transmission et du march, lAlberta a ajout trois autres projets qui totalisent une capacit de 109,5 MW. En plus des nouveaux mgawatts qui se sont ajouts, de nouveaux engagements ont t pris en vue de lapprovisionnement en nergie olienne. Des appels doffres ont t soit annoncs ou sont sur le point de ltre au Nouveau-Brunswick, au Qubec, au Manitoba et en Nouvelle-cosse, tandis que Newfoundland and Labrador Hydro et BC Hydro ont sign des contrats pour leurs premiers projets destins aux services publics. LOntario a aussi lanc son programme de contrats doffre standard en 2006, garantissant 0,11 $/ kWh pour les projets dnergie renouvelable petite chelle dau plus 10 MW de capacit. On a ainsi des indices que la croissance se poursuivra , dit M. Hornung. Nous sommes rellement dans une situation o nous pouvons nous attendre ce que chaque province canadienne ait une capacit de production olienne en place. Lorsquon pense quil y a peine cinq ans, il y avait essentiellement des avant-postes dnergie olienne au Qubec et en Alberta, et vraiment pas autre chose, il sagit dune volution formidable de lindustrie en une si courte priode de temps. Malgr tout, lAC sattend une diminution de la croissance en 2007. Notre estimation actuelle, et cest une estimation prudente, serait dau moins 500 MW en 2007, alors quelle pourrait tre suprieure de 50 %, et avec la prvision que 2008 pourrait tre une anne encore plus importante , dit M. Hornung. Lune des raisons de la baisse prvue est simplement le choix du moment pour la signature des contrats. Mais il y a aussi dautres facteurs. Je suppose que la principale est que certains projets sont un point o il faut relever des dfis en termes dchance pour lapprobation qui dpassent ce qui avait t prvu au dpart , dit M. Hornung. Pour cette raison, une partie de ce quoi nous aurions pu Le projet de 109,5 MW de Baie-des-Sables est entr en nous attendre pour 2007 sera reporte en 2008. service en dcembre, soit le premier des huit projets choisis lors du premier appel doffres dHydro-Qubec. Il fait peu de doute que lacceptation de la communaut et loctroi de permis ont pos encore plus de dfis pour lindustrie olienne en 2006. Au Qubec, les promoteurs ont d faire face des demandes de nationalisation de lindustrie, des demandes de moratoires sur le dveloppement en attendant lexamen sur lutilisation des terres et les autres rpercussions, des campagnes locales en vue dimposer des restrictions sur le dveloppement de projets et des demandes de municipalits qui dsirent avoir une plus grosse part du gteau des retombes conomiques. Dans la province voisine de lOntario, un projet a t annul en 2006, car il a t impossible dobtenir les permis municipaux ncessaires temps pour respecter lchance de livraison et deux autres projets ont subi dimportants retards par suite de demandes de la part de rsidents locaux afin que la province impose des examens environnementaux plus svres. En mme temps, souligne M. Hornung, six autres projets ontariens ont t construits en 2006 et des parcs oliens situs dans dautres rgions du pays ont reu un solide appui de la part de la communaut. Il faut mettre cela en perspective, mais il est juste de dire quil sagit dun dfi et dun dfi qui prend de lampleur , dit M. Hornung. Une partie du problme de lOntario se trouve dans le processus dvaluation

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fvrier 2007 WindSight 18

Cartier Wind Energy

Objectifs plus fermes et solutions plus claires ncessaires

(Suite de la page 18)

lui-mme, dit M. Hornung, et sa simplification aiderait les choses. Mais une autre partie de la solution consiste donner les bons renseignements et rpondre de faon proactive aux proccupations locales au sujet des enjeux comme le bruit, laspect et les rpercussions sur la valeur de la proprit dune technologie que beaucoup de gens ne connaissent pas trs bien. Du ct municipal, il sagit encore, bien franchement, de mettre en place une politique et dessayer dviter de tomber dans la spirale dun ramassis de cadres de rglementation qui sont de plus en plus concentrs sur la prudence. Lun des enjeux les plus importants auxquels a t confronte lindustrie en 2006 a t lincertitude entrane par la dcision du gouvernement conservateur, lu en janvier, de geler le financement pour le prolongement promis du programme fdral dencouragement la production dnergie olienne (EP). Lnergie olienne est grandement une industrie mondiale et les investisseurs veulent investir l o il y a une certaine stabilit politique et o ils peuvent What we cant add value to we obtenir un bon taux de rendement. Il ne fait aucun will sell on the opportunity market, doute que lincertitude au sujet de lEP, je pense, a and that of course still has min quelque peu la confiance des investisseurs autant significant value au Canada et lextrieur du Canada que sur le march canadien. - Ed Wojczynski, Manitoba Hydro Malgr cela, il est clair que le march canadien de lnergie olienne a attir lattention de lindustrie mondiale en 2006. La socit irlandaise Airtricity a achet le promoteur torontois Gale Force Energy, la socit Renewable Energy Generation Limited, du R.-U., a fait lacquisition de la socit ontarienne AIM PowerGen Corporation et la socit allemande HSH Nordbank AG a acquis des intrts minoritaires non dvoils dans la socit torontoise SkyPower Corporation, alors que certains des plus gros joueurs du march amricain, y compris FPL Energy, PPM Energy et Invenergy Wind LLC, ont commenc examiner srieusement les occasions possibles ici. Les acquisitions internationales font partie dune plus vaste tendance vers une plus grande consolidation de lindustrie qui a aussi marqu lanne 2006. Nous avons vu plusieurs petits joueurs achets par des joueurs plus importants. En partie, cela est gnralement typique de lvolution de diffrents secteurs , dit M. Hornung. Mais les caractristiques de lindustrie olienne elle-mme ont aussi eu un rle jouer, ajoute-til. Cela dmontre les processus trs concurrentiels par lesquels est obtenue lnergie olienne. Il rsulte de la difficult de se procurer les oliennes et du besoin de trouver les meilleurs mcanismes de financement possible. Avec lannonce en janvier du gouvernement conservateur sur le nouveau programme coNERGIE sur les nergies renouvelables, lindustrie devrait connatre plus de stabilit politique au palier fdral. Ce quil faut encore, indique M. Hornung, ce sont des objectifs plus fermes et des solutions plus claires pour rpondre aux plans dapprovisionnement provinciaux qui totalisent prs de 10 000 MW dici 2015. Et les dfis constants de lintgration, de linterconnexion, de laccs la transmission et des impacts environnementaux continueront dtre prsents pour lindustrie en 2007. Il y a encore beaucoup de travail abattre , dit M. Hornung. Nous ne sommes pas encore une industrie tablie. Nous sommes une industrie mergente et nous le serons encore pour un certain temps. Mais nous avons fait de grands pas, je pense, en termes de mise en place dun certain nombre dlments de base qui peuvent nous aider devenir une industrie tablie.

fvrier 2007 WindSight 19

Upcoming events
March 11-13, 2007: Building to the Boom. Independent Power Producers Society of Alberta 13th Annual Conference, Banff. Contact: Capitol Conferences, Tel. (403) 210-0596, Web site: www.ippsa.com March 28-29, 2007: BC Power Summit, Vancouver. Contact: Insight Information, Tel. 1-888777-1707, Fax 1-866-777-1292, Web site: www.insightinfo.com April 23-24, 2007: 6th Annual Quebec Forum on Electricity, Montreal. Special Forum on Wind Power - April 25. Contact: Canadian Institute, Tel. 1-877-927-7936. Web site: www.canadianinstitute.com

CanWEA targets policy, outreach

CanWEAs board, staff and 10 x10 members came together in November 2006 for a strategic planning session to identify CanWEAs priorities for the next three years. There was broad agreement that CanWEA needs to enhance its activities with respect to both policy work and public outreach/communications and that this will require more staffing and financial resources. In the policy area, it was agreed that CanWEA must do even more work at the provincial level to advocate for support mechanisms like mandated renewable portfolio standards, more streamlined and effective permitting and approval processes, and to become more actively engaged in discussions Presidents around issues like transmission Insight and the integration of wind into the grid. To support this, it was by Robert Hornung felt that CanWEA would need to move to hire full-time staff to work on policy issues in each region of the country (e.g. Western Canada, Ontario, Quebec) and that some of these new positions would have to be located outside of Ottawa. Although the federal government has now recently agreed to replace the Wind Power Production Incentive (WPPI) with an ecoEnergy Renewable Power program that will operate until 2010, it was agreed that CanWEA needs to develop and potentially advocate for different types of federal support mechanisms that could serve as alternatives to power production incentives for the period beyond 2010. With respect to communications and public outreach, it was agreed that CanWEA must be more proactive in ensuring that key decision makers and media are provided with good quality information about wind energy and must react more forcefully to misinformation and negative media coverage. It was also agreed that CanWEA should do more to facilitate successful community engagement processes for wind energy projects. In order for CanWEA to have the staffing and financial resources required to implement such an ambitious agenda, it was agreed that CanWEA should move to implement an aggressive and proactive membership recruitment strategy, as well as hold more conferences and special events for CanWEA members and other stakeholders. CanWEA is now seeking to implement these strategic directions in CanWEAs 2007 budget and workplan and I will describe our plans in my next column. Finally, I should note that the strategic planning session agreed that CanWEA should use 2007 as an opportunity to more clearly define and formalize CanWEAs vision and mission. You will be hearing more about this exercise over the course of the coming year.
February 2007 WindSight 20

Dates retenir
Du 11 au 13 mars 2007: Building to the Boom. Independent Power Producers Society of Alberta 13th Annual Conference, Banff. Responsable : Capitol Conferences, Tl. (403) 210-0596, www.ippsa.com 28 et 29 mars 2007 : BC Power Summit, Toronto. Contact : Insight Information, Tl. : 1-888-7771707, www.insightinfo.com 23 et 24 avril 2007 : 6ime Forum annuel du Qubec sur llectricit, Montral. Forum spcial sur lnergie olienne 25 avril. Responsable : Canadian Institute, Tl. 1 877 927-7936, www.institutcanadien.com