The project will be the first commercial scale wind farm in Nova Scotia and the largest east of the province of Quebec. Its 15 year power purchase agreement carries an annual price tag of about C$7 million.
Pubnico Point is also one of the first two projects to receive financing from Creststreet Asset Management Limited's newly established wind power flow-through fund, the first of its kind in Canada. The Creststreet Power & Income Fund LP is designed to take advantage of Canadian tax law that allows wind developers to flow-though certain pre-development expenses, including the installation of test wind turbines, to shareholders who can claim them as deductions on their income tax.
The fund's initial public offering, at C$10 a unit, aims to raise C$40 million to finance the construction cost of two test turbines at Pubnico Point and five more at 3Ci's planned 54 MW Mount Copper wind project in Quebec (Windpower Monthly, September 2003). Both 3Ci and AWPC will complete their projects using construction debt financing. Creststreet says its goal is to "position the fund as the leading supplier of wind power in Canada."
Nova Scotia Power began its quest for a wind power supplier in mid-2001 when it issued a request for expressions of interest. Earlier this year, it announced it was negotiating the details of a 100 GWh/year wind power purchase agreement with Nova Scotia's Renewable Energy Services Ltd (RESL), which was selected through a controversial online reverse auction that some participants believed pushed the price too low. (Windpower Monthly, February 2003). Nova Scotia Power's Margaret Murphy will not comment on negotiations. RESL failed to respond to inquiries.
Five per cent target
The province's energy minister, Cecil Clarke, hails the AWPC agreement as exciting news. "Wind is a clean energy source that will play an important role in reducing Nova Scotia's greenhouse gas emissions as we work together to improve our environment," he says. Indeed, a new report from a stakeholder committee advising the minister on electricity market reform says Nova Scotia should adopt a renewables portfolio standard (RPS) that would see 5% of the province's power come from new green sources by 2010.
Nova Scotia Power, the province's monopoly utility, is already working on a voluntary renewables target equivalent to 1.2% of electricity supply by 2005. In 2006, says the Electricity Marketplace Governance Committee, a mandatory RPS should take effect requiring the addition of 0.75% new renewables a year to 2010. Nova Scotia's current electricity demand is about 11,000 GWh a year.
The RPS is one of 89 recommendations made by the committee, appointed last year to advise the government on how to encourage greater competition in the electricity marketplace. Among the proposals in its annual report are regulatory changes that would allow renewable energy producers in Nova Scotia to sell green power directly to customers. It also recommends generators with an installed capacity of 100 kW or less and connected to the distribution grid be eligible for net metering, allowing them to offset their consumption from the grid with their own generation.
Clarke announced in late November that the government accepts all the report's recommendations and will begin work on their implementation.
Nova Scotia Power, says Murphy, supports a mandatory RPS. "Clear targets and renewables portfolio standards do help provide certainty in business planning," she says. "We definitely favour more diversity and flexibility in our generation mix and therefore are seeking to increase the role of renewables."
To do that, she says, the utility is looking primarily at wind power. "Some of our onshore coastal wind, we believe is, in some cases, as strong as the offshore wind resources. We're ideally situated."
In 2002, about 61% of Nova Scotia's electricity supply was generated from coal. Nova Scotia Power owns two 600 kW turbines and is in the process of installing more monitoring towers around the province, says Murphy. Although it will not rule out developing its own projects, the utility is "looking mainly to independent power producers in terms of siting and building the turbines," she says.