Natural gas plans drive wind energy uptake

CANADA: Wind energy developers in the Canadian province of British Columbia are looking to gas, a traditional energy sector rival, to drive massive new demand for electricity.

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There are at least five liquefied natural gas (LNG) ports on the drawing board for British Columbia (BC) waters and others are rumoured to be in the exploratory stage.

Gas ports require enormous amounts of energy to chill the gas to its liquid form for transport. That is where wind can help.

One port, a $12 billion project spearheaded by oil and gas company Royal Dutch Shell, would use an estimated 9,600GWh of electricity a year. Considering the province's current total load is about 55,000GWh a year, this is a step change in electricity demand.

"If you assume that a healthy fraction of the LNG proposals go ahead and a healthy fraction of their energy needs are met through green electricity, you end up with stupid big numbers," said Nicholas Heap, Canadian Wind Energy Association regional director for BC. "The implications are huge."

The prospects are not lost on a wind industry facing anaemic electricity growth in much of the rest of North America.

BC's vast shale gas reserves combined with historically low commodity prices in North America - and its proximity to Asia - are prompting companies to look to lucrative overseas markets where LNG is selling for four or five times as much.

High interest

"We act for a lot of wind developers and they are all very keen about what is going to happen," said Warren Brazier, a senior associate at the Vancouver law firm Clark Wilson. "There are people buying sites in anticipation and investigating the potential."

There are risks, however. BC's north coast, where the LNG ports will be built, is not well connected to the province's power grid. Getting power to the facilities would require costly transmission investments, without a lot of clarity about how big the industry will be and for how long it will be around.

The province has delayed delivery of government-owned utility BC Hydro's 20-year integrated resources plan, originally due in December 2012, until August 2013 to give the utility "the time and flexibility to complete electricity supply agreements" with LNG proponents.

But even so, it is not certain electricity will be the energy supply of choice. There are some in government and industry who think a better solution is to have the LNG industry power their own operations and bypass the grid altogether.

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