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Canada

First project under incentive program -- Constructing 75 MW in Alberta

Construction has started on the first wind farm in Canada to sign up for the government's wind power production incentive (WPPI). Calgary's Vision Quest Windelectric and utility Enmax are building a C$100 million, 75 MW project of Vestas turbines at McBride Lake in southern Alberta. Enmax serves about half a million customers across the entire province.

The two companies are equal partners in the construction and ownership of the project, while Vision Quest will operate the facility, consisting of 114 wind turbines. Enmax will buy its output.

Vision Quest's Jason Edworthy says the partners hope to have the first 36 MW up by the end of March, in time to qualify for an incentive payment of C$0.012/kWh. The second 39 MW is scheduled to be operating by fall 2003, making it eligible for a WPPI incentive of C$0.01/kWh. In total, the wind farm's owners will receive about C$2.3 million annually for ten years from the federal program.

TIGHT TIMELINE

The project's timeline is complicated by the fact that winter is fast approaching, making construction difficult and unpredictable. Like many in Canada's wind industry, Edworthy would like to see the federal government extend the commissioning deadline for WPPI's first year, when the incentive level is at its highest, beyond March. "The fact is, the WPPI rules were not well defined until pretty close to summer and summer is a very difficult time to put deals together. Here it is November and the wind season is coming up and the cold, and it's a challenge. Some reasonable practical relief on that would be most welcome," says Edworthy.

Enmax currently sells premium priced wind energy to 4000 homeowners and more than 200 commercial and government operations. With the addition of the McBride Lake power, the utility's Greenmax program will be the third largest in North America selling green power generated exclusively from wind.

Stronger portfolio

"This is a clear example of how business, in a quest to serve our customers, is finding a way toward cleaner air," says Enmax boss Bob Nicolay. The wind farm, he adds, strengthens Enmax's long term electricity supply portfolio, "a very important attribute in a competitive marketplace."

The wind power announcement comes four months after Enmax backed out of a proposed partnership with Fording Coal Limited to build a 1000 MW coal-fired generating plant in Alberta, saying the project was too big and too risky. "I think it is extremely telling which direction they went," says Edworthy. "That adds a lot to the wind industry's stamp of approval."

The McBride Lake announcement also came two days after TransAlta Corporation, a generator whose focus is on coal and gas fired generation, announced it had reached an agreement to buy Vision Quest. The project did not depend on the TransAlta purchase, says Edworthy, but it did help. "It's all come together to make it a much better deal for all parties. It reduces credit risk and makes the business case work a lot better."

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