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Canada

Big oil and hydro diversify into wind

One of Canada's largest petroleum producers, Shell Canada, has teamed up with Manitoba's publicly owned utility to jointly develop, own and operate wind farms in the province. "Manitoba Hydro's experience in power generation, transmission and distribution combined with Shell Canada's experience in resource development and project management bring great strength and potential to this agreement," declares a joint release from the duo.

Under the agreement, Shell and Manitoba Hydro will independently monitor wind resources and acquire land rights. Then the two companies will collaborate on an assessment of the data and, if an opportunity appears, jointly develop one or more projects.

Shell already has four wind monitoring sites in the province collecting resource data. Manitoba Hydro's Glenn Schneider says the utility has monitoring equipment up at four sites in the southern part of the province and three more will be added by June. He says there are some very good wind resources on the plains that extend from North Dakota up into areas of Manitoba and its neighbouring province to the west, Saskatchewan, but "wind is still not competitive" with the cost of producing power through Manitoba's large hydro plants, with a combined capacity of 5000 MW.

"Development may be driven by other considerations," says Schneider, "like the federal government's commitments on Kyoto or a desire to produce what will be classified as green energy." Schneider also explains that yet-to-emerge customers for wind power may not reside in Manitoba but in Ontario, on the province's eastern border, Saskatchewan and the US, where the utility already exports a substantial quantity of power. Laying claim to the best wind sites in the province is the first step to accessing this market. "Getting the actual sites where the wind conditions are best and most suitable for development is a strategic move, aimed at the future rather than the present."

Hydro and wind

Right now, 95% of the utility's electricity is generated using hydro resources, which have been shown to team up well with wind. "Manitoba Hydro is interested in exploring how Manitoba's extensive large-scale, low-cost renewable hydro power facilities could be complemented with the development of wind power," says CEO Bob Brennan.

Shell Canada CEO Tim Faithfull says the company examined opportunities for energy diversification in 2001 and identified wind power as the most attractive opportunity for business development. Earlier this year, the company announced it was monitoring wind not only in Manitoba, but also in Alberta and on the east coast of Canada.

"We take a broad perspective and a long term view of the future of our business and recognise that society increasingly insists that energy needs are met in an environmentally and socially responsible way," he says. "We think wind power holds promise and we're pursuing opportunities for investment."

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