Canada

Canada

Creating an energy hub in Northeast -- Suez wins power sales contract

The North American division of global energy services company Suez has signed a 20-year power purchase agreement with government-owned New Brunswick Power for a 99 MW wind project in the northern part of the province. SUEZ Renewable Energy NA (SRENA) plans to begin construction of the C$200 million Caribou Mountain project this year, with commercial operation expected in late 2009.

The project will use 33 Vestas 3 MW turbines, which will be delivered starting the middle of next year. Two years of monitoring at the project site shows an expected capacity factor of 37%. Revenue over the life of the contract is expected to be approximately C$500 million, says SRENA.

The SUEZ contract is the third stemming from New Brunswick Power's 2007 call for 300 MW of wind. In January, it announced agreements with Acciona Energy for the output of two wind farms with a total capacity of 114 MW (Windpower Monthly, March 2008). A 96 MW project is currently under construction by Calgary-based TransAlta Wind near the city of Moncton. Energy minister Jack Keir says further contracts will be signed to allow the province to meet its wind energy target of 400 MW by 2010. "We've got another one hundred megawatt to get out just as quickly as we can and our plan is to do exactly that," he says.

The New Brunswick System Operator has put a 400 MW limit on wind capacity in the province until it and the utility can assess the impact on grid operations and decide how to best add more. But as far as Keir is concerned, 400 MW is just the beginning.

Minister leads

"Obviously NB Power and the system operator have issues around reliability and stability of the grid. Our grid is not a corridor through the middle of the province. It goes all the way around the province and that makes it very robust and reliable. They want to make sure the wind balancing doesn't affect that in any way, and I get that," he says. "But that doesn't mean we have to reinvent the wheel there either. We've had some Danish consultants in looking at how much our grid can hold and how best we can balance any new wind coming on board. So NB Power and the province are looking at that together, and we hope to be able to push the envelope and put as much wind on as we can."

Keir says he wants more wind because of its environmental advantages and cost-effectiveness. The technology brings greater price stability, he says, by lessening dependency on rising fossil fuel prices. It also provides a buffer against the potential cost of greenhouse gas emission reduction requirements. New Brunswick currently has close to 4000 MW of generation, about 60% of which is fossil fuel based. "On top of that, we have a wonderful wind resource in New Brunswick that we should be taking advantage of."

An energy hub

Keir believes that resource will be key to the province's ambitions to become an energy hub for north-eastern North America. New Brunswick lies on the international border with Maine and is the access point to other Canadian markets for power from Prince Edward Island and Nova Scotia.

"We are blessed with location. We sit on top of one of the largest demand markets in North America. That is the north-eastern United States. Studies show they are going to have a demand-supply gap anywhere between seven thousand and ten thousand megawatt in the next eight to ten years. We want to be able to take advantage of that," he says.

The province has a diverse mix of generation to offer if the transmission and market challenges can be overcome, says Keir, but he also recognises that a lot of demand in New England is being driven by renewable energy laws mandating a specific proportion of green energy in the supply mix. "So wind is going to be a big play in that, no question."

SUEZ is already wheeling power through New Brunswick from its 19.8 MW West Cape project in Prince Edward Island and selling electricity and green power credits into the north-eastern US. SUEZ Energy North America acquired the project last year when it bought Toronto developer Ventus Energy for C$124 million in cash. The purchase marked the company's entry into the North American wind power market. It is also rapidly building a wind portfolio in Europe (page 44).

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