Wedged between past and future -- Acciona projects lack finance

Difficulty securing financing has forced Spain's Acciona Energy, internationally active as an independent wind farm developer, to delay three wind projects it had planned to bring online in Canada's Atlantic Coast region this year. The company won contracts in 2008 to build the 49.5 MW Lameque and 64.5 MW Aulac projects in New Brunswick and 30 MW Amherst wind farm in Nova Scotia. But a lot has changed since Acciona originally submitted bids for the projects back in 2007, says the company's Eric Schneider.

"There have been volatile fluctuations in currency, commodity costs and interest rates that all have significantly impacted the economics of the projects, particularly the devaluation of the Canadian dollar and some other costs that have gone up. It has just made it difficult to secure financing," he says. "We are faced with the task of trying to find ways to make the economics work for these projects so we can achieve financing for them, and that is what has essentially slowed them down."

Acciona does not have a new schedule for any of the projects, says Schneider, but has not dropped them. "We're continuing to pursue our permits and do other pre-construction work and continuing to talk to landowners so that when a solution is found we can move forward relatively quickly." No other Acciona projects are facing the same challenges and a lot of the problems the company is having in Atlantic Canada has to do with timing, says Schneider.

"We've got a lot of early stage developments where we're heading into the projects with a solid understanding of the new economic dynamics -- and we've got a lot of late stage projects where we're just finishing up construction and where a lot of the work was done prior to the current economic downturn," he explains. "These projects just happen to be wedged in the middle of that and that's why they're suffering from this particular economic downturn."

The Lameque and Aulac projects, both slated to use Acciona 1.5 MW turbines, were selected in a competitive request for proposals issued by New Brunswick Power in May 2007. At Amherst, Acciona is attempting to develop a wind farm for the second time. A similar project was killed in December 2006 because rising costs meant it was no longer viable. The company resubmitted a proposal to Nova Scotia Power in 2007 and entered into a 25-year power purchase agreement last year, again using its own turbine technology.

Have you registered with us yet?

Register now to enjoy more articles
and free email bulletins.

Sign up now
Already registered?
Sign in