The government-owned utility selected the 180 MW Dokie Wind Project and the 120 MW Bear Mountain Wind Park, both located in the Peace River region in the province's north-east, along with the 25.2 MW Mount Hays Wind Farm near Prince Rupert on the north coast. Together, they will supply BC Hydro with 979 GWh of electricity a year. Six wind projects were bid into the call.
The three winning wind bids are among 38 independent power projects that were successful in the call. In addition to wind, BC Hydro will buy power from 29 hydro projects ranging in size from 0.8 MW to 196 MW, two small waste heat projects, two biomass projects totalling 140 MW, and two facilities with a combined capacity of 240 MW that will be fuelled by a combination of coal and biomass. The projects, which have contracts averaging 30 years in length, must be online by 2010 and together are expected to generate C$3.6 billion in private sector investment.
"We're quite excited. We're particularly excited that they were awarded in competition against other fuels. I think that is quite a change from what we usually see in the market," says TJ Shur, vice-president of project development for Bear Mountain Wind LP. "I see it being an indication of how good the wind is out here. That wind, combined with pricing for various other fuels, means we are starting to see that line cross over where wind is actually competitive with other fuels."
Until now, British Columbia was the only Canadian province with no installed wind capacity and no specific plans to add any. In five previous calls for power, only one wind project was successful. But it was forced to cancel its contract after ongoing monitoring at the chosen site found the wind resource could not support the price bid.
Ron Percival, CEO of Dokie Wind Energy Incorporated, believes one of the reasons for wind's success this time around was the effort both the province and the utility made to ensure wind power was "properly considered." Still, the rules of the call were challenging for an intermittent technology, specifically BC Hydro's requirement for a monthly firm bid with liquidated damages for failure to comply.
"Bidding firm is just one of the realities of developing in BC, or it has been and probably will continue to be so," says Percival. "I think our company has taken a pragmatic approach to development of wind, in that British Columbia is rich with renewable resources like small hydro and other fuels and we just have to compete within that environment. To do that wind developers have to perhaps make greater investments earlier in the cycle to demonstrate certainty for their projects."
He points out that Dokie, a joint venture between Victoria-based Earth First Energy and Calgary's Creststreet Capital Corporation, has three years of monitoring data at its site, has already put the project through BC's rigorous environmental assessment process, and has garnered both First Nations and community support. "We've made an investment exceeding C$3 million in the project to develop the type of certainty that we felt was required for our company to make the bid."
Shur, whose project has four years of wind data behind it, echoes Percival's comments. "There was a complexity to the bid so that we felt you really, really had to know your project well and you had to be able to model the project based on those terms. It wasn't any light task," she says. "But when we looked at all of the components, we felt the project was strong enough to be able to compete in that environment."
Tony Duggleby of Katabatic Power, a partner in the Mount Hays project, agrees the monthly firm requirement was a concern. "We are still concerned about it. It is difficult and actually I believe it cost BC Hydro some money to have that requirement in there because people had to adjust their bids accordingly. We couldn't bid as low as we'd like to because we had that level of uncertainty."
Duggleby's project is located on publicly owned land on the top of Mount Hays, overlooking the city of Prince Rupert, and is finalising turbine supply. He expects to begin construction of the project, which will supply BC Hydro with 72 GWh of electricity a year for 25 years, in 2007. "It depends on how the turbine delivery shakes out and how the financing deals shake out. Ideally we would be up and running by the end of 2007, but that is a pretty aggressive timeline."
Bear Mountain Wind LP is 50% owned by Calgary's AltaGas Income Trust, 47% by Victoria-based Aeolis Wind Power Corporation and 3% by the Peace Energy Cooperative. Local involvement in the project, says Shur, was part of the company's strategy from the start. "Without local support and local investment, in so many definitions of the word, you are really putting yourself behind the eight ball."
The project, which will supply 371 GWh a year for 25 years, will consist of 60 Enercon E82 2 MW wind turbines strung in a single row on publicly owned land along the top of Bear Mountain, about ten kilometres southwest of the city of Dawson Creek. "We are hoping to initiate some construction of ground work for road and infrastructure in 2007," she says. "Then we are looking to have receipt of turbines in 2008 with the remainder for 2009."
The Dokie Wind Project, which will be among the largest in Canada when complete, is located on publicly owned land on Dokie Ridge in the Rocky Mountain foothills, about 40 kilometres west of town of Chetwynd. It will supply BC Hydro with 536 GWH of electricity a year for 20 years. Turbine supply is still confidential, says Percival. "We'll do some field engineering work in 2006, but we won't start actual construction until 2007."
The company is considering building the projects in two phases, which would allow it to first install test turbines to take advantage of certain tax breaks provided by the federal government. "We're still working that through," says Percival.