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Canada

Canada

Atlantic province offers fixed prices -- Limited market

Prince Edward Island has become the only jurisdiction in North America to offer a fixed price tariff for wind energy, but the small size of the market could mean private sector developers will have only a narrow window of opportunity to take advantage of the new policy.

The provincial government finalised a regulation in December requiring utilities to pay a minimum price of C$0.0775/kWh for power produced by renewable energy generators larger than 100 kW in size. Of that, C$0.0575/kWh is fixed, while the remaining C$0.02/kWh is a variable rate that may be adjusted annually to reflect changes in operating costs.

The rate, says energy minister Jamie Ballem, is based on analysis of the operations of the 10.56 MW North Cape Wind Farm and projections for a wind farm being developed on the eastern side of the island. It does not include the federal government's C$0.01/kWh wind power production incentive.

John Douglas, CEO of Ontario's Ventus Energy, has three projects under development in the province. "We're in our second year of monitoring the wind there and that price works for us. We're busily moving those projects through from the pre-development into construction phase. We're pleased and glad about it because it gives us more certainty."

At the same time, however, the minimum price only applies to wind projects until the province's legislated renewables goal of 15% by 2010 is met, a target that would require the installation of 60 MW of wind. With 13.5 MW now in the ground, government-owned PEI Energy Corporation is hoping to start construction on its 30 MW Eastern Kings wind farm this spring, and Maritime Electric, the province's major utility, is exploring the possibility of building its own wind project, PEI is rapidly closing on its target.

Price cap

The government is taking a "cautious approach" in capping the amount of wind able to receive the minimum price, says spokesperson Sandra Lambe. She points out that 15% wind power is what Maritime Electric "has indicated it is able to integrate into the system for on-island use at this time."

Ventus expects to begin construction this year of its 10 MW Norway Wind Park on the western side of the island to take advantage of the fixed price tariff, says Douglas. But it also plans to build a 100 MW project, also in the west, and export the power to an undisclosed off island customer. "We are going to try and start if we can get turbines, and we think we have them for 2006 delivery," he says.

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