Visit windpowermonthlyevents.com for the latest on our upcoming conferences and webcasts

Canada

Canada

New tariff sparks offshore interest - Ontario overwhelmed by applications

Ontario's natural resources ministry has been so overwhelmed with applications to develop offshore wind projects in the Great Lakes that it has stopped accepting them until March 2010.

The province has received 144 applications representing more than 500 projects on the Ontario side of the lakes, says Ontario's natural resources minister Donna Cansfield.

"The window for applications has been temporarily closed," she says. "We needed time to respond to this high level of interest as well as to ensure the proper processes were in place to help us move forward in a sustainable and environmentally responsible way."

Cansfield says that she expects to have a plan in place by March for releasing sites to developers.

Interest in the province's offshore opportunities have soared following its introduction of a C$0.19/kWh offshore feed-in tariff (Fit). This is the first of its kind in North America and a reflection, says Cansfield, of the province's strong support for exploring the potential in offshore wind.

Ontario is well positioned to do that exploration. The province borders four of the five Great Lakes, and a 2008 study by Montreal's wind energy consultant Helimax Energy found "favourable potential" to develop 34.5 GW at 64 sites on the Ontario side alone. The study concludes that there are further locations where development might also be feasible.

There is no operating offshore wind farms anywhere in North America as yet. It remains to be seen when the interest will translate into actual hardware.

Toronto Hydro Energy Services was given the green light from the natural resources ministry in October to build an offshore wind research platform in Lake Ontario, about 1.2 kilometres off the Scarborough Bluffs, an escarpment in the eastern part of the city.

The company plans to use a laser-based anemometer, called a light detection and ranging (Lidar) device to measure wind speed and direction at heights between five and 150 metres. It will take two years of data collection to help determine whether an offshore wind project is economically viable, says the company.

Second thoughts

Another potential offshore developer has now decided not to pursue the offshore path. Just a few days after the Fit program was launched, Calgary-based Canadian Hydro Developers announced that it would buy a company that is developing an offshore wind project in Lake Erie with an estimated 4.4 GW of generating potential, citing its expectation for "years of strong, double-digit growth" and attractive returns for shareholders. But after Canadian Hydro was acquired by Calgary-based TransAlta Corporation in October, the deal was cancelled.

"Offshore wind just isn't a priority at this time," TransAlta spokesman Michael Lawrence said. "We've got several opportunities we're pursuing in wind, in hydro, within Alberta primarily, and in geothermal in the United States. We just don't believe the rate of return is there for our shareholders (with offshore wind)."

GE Energy, which announced its intention to enter the offshore turbine market in August with an agreement to purchase Norway-based ScanWind, believes it will take time for an Ontario offshore market to develop. "There is a good feed-in tariff for offshore wind but I think it is going to take a while for people to figure it out and make it profitable," says Simon Olivier, who manages the company's power generation business for Canada and the north-east US.

European model

GE's vice-president of renewable energy, Vic Abate, says that Europe is ahead of North America in developing the partnerships needed to make offshore projects work. Oil and gas companies, for example, are bringing their expertise in offshore infrastructure to the table. "That's the model," says Abate. "It's almost more like a nuclear project. There is a lot more to do to pull it off. Governments have to play a bigger role, the subsidies have to be long term and the roles, responsibilities and risk-sharing models need to be a little clearer. And," he adds, "I think in Europe it is coming together that way. I think Europe is where it is going to be and the North America market will follow, if it follows at all."

At least one turbine manufacturer, however, appears to be positioning itself in preparation for Ontario's offshore policy and what that may bring. Vestas has made Toronto the centre of its offshore sales for North America. Rikke Tikjob Christiansen, director of communication and marketing for Vestas Offshore, says: "It was important for us to be located close to the Great Lakes and the East Coast as these areas represent the greatest potential for offshore wind in North America at the present stage."

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Only [DAYS_LEFT] days Subscribe Now

Left of your Windpower Monthly free trial

Your free trial Subscribe Now

to Windpower Monthly has expired

Windpower Monthly Events

Search more than 4,500 companies in the Windpower Directory

Latest Jobs