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Canada

Recession hits Prince Edward Island expansion plans

CANADA: The economic downturn has thrown a spanner in the works of Prince Edward Island's plan to supply wind power to markets in the US.

Maritime Electric, the investor-owned utility that serves Prince Edward Island, launched a request for proposals (RFP) a year ago for 30MW of renewable energy to meet the Canadian province's domestic need and another 100MW for off-island export.

But the utility has scrapped the export part of the solicitation because of a lack of interest among project developers. "At this stage, we are only in discussions about the domestic side," says Kim Griffin, the utility's manager of corporate communications and public affairs.

Lower electricity demand and depressed electricity prices have left wind energy producers in the US - Prince Edward Island's main target market for its export strategy - struggling to find buyers for their power. (Windpower Monthly, May 2010)

"Under the existing market conditions, the export market was not there," says Ron Estabrook, an energy adviser with the government-owned PEI Energy Corporation.

"We have seen power rates that have been as low as $35-$40/MWh. Unless you have old generation from hydro, there is no way you can make money in that market, and certainly not with wind power. I think that was the determining factor."

The Maritime Electric RFP was meant to be the first step in the provincial government's plan to see 300MW of new wind capacity developed on the island for export, part of its ultimate target of 500MW by 2013.

Uncertainty

The 500MW goal remains in place, says Estabrook, but the timing is now uncertain. "I think, realistically, a lot of things have to happen. Certainly the economy in the United States has to pick up," he says, adding that new intertie capacity is also needed.

Prince Edward Island is linked with New Brunswick's power grid via two undersea cables across the Northumberland Strait that have a total transfer capacity of 200MW. The province has filed an application under the federal government's Clean Energy Fund for help in financing another 200MW interconnection at an estimated cost of C$95 million.

The island currently has 164MW of installed wind energy capacity, with another 9-10MW contracted to come online next year.

Maritime Electric is also negotiating with two developers, shortlisted from six original bidders, for the 30MW of wind it wants to buy to serve domestic load. The utility hopes to finalise terms this autumn and have the new capacity operating by the end of 2012, says Griffin.

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