It has been nearly a year since the provincial government, which owns the monopoly utility, released a request for expressions of interest (EOI) to get information on the timing and location of potential projects, capabilities of proponents and possible manufacturing opportunities. Since February, it has been sorting through a whopping 10,000 MW worth of responses to determine its next steps.
The province expects construction of the winning projects in the coming RFP to begin as early as 2007-08. Its strategy then envisions adding another 200 MW in each of the 2013-14, 2015-16, and 2017-18 periods.
The industry, says the Canadian Wind Energy Association's Sean Whittaker, welcomes the announcement as a "concrete step" towards the province's target. But it also wants to work with the utility to see if future purchases can be brought online more quickly. He points out that the addition of 300 MW will bring the province's installed capacity to 399 MW, or about 3.2% of the utility's total annual electricity generation. Experience in other jurisdictions suggests that level of penetration is easily manageable, Whittaker says.
"We really believe that as Manitoba Hydro gains more experience with higher wind penetrations that they will see that the challenges can be overcome and that wind represents a positive opportunity for further development. We certainly hope that this will increase their comfort with wind, and move them to accelerate their timeline for developing the remainder of the 1000 MW."
The energy ministry's Jim Crone says Manitoba has always wanted to install the wind over ten years, but adds there could be some movement on the target dates for acquiring the last 600 MW. "It could go either way, and there are probably more reasons that it could speed up."
An export product
While Crone agrees the stepwise approach will allow Manitoba Hydro to gain experience with wind, the main reason for the schedule is that is when the utility has projected it is going to need the power. Manitoba has more than enough electricity to supply its own needs to 2020 and carries on an extensive electricity export business over interconnections with US markets to the south and Ontario to the east. Wind power, says Crone, is largely seen as an export product.
"Obviously, Manitoba Hydro takes into consideration what the export markets are doing, what natural gas prices are doing because they drive a lot of the export rate, what our local load growth looks like, any transmission upgrades, and any other developments that are going on in the province in terms of new dams that can provide capacity behind the wind," says Crone. "Then Hydro makes its best prediction as to when it can take that wind and when it has its maximum value to the utility."
Energy Minister Dave Chomiak says the development of more wind power is a crucial economic strategy for the province as fossil fuel prices rise and supplies tighten. "Developing wind makes good economic sense," he said. "We want to establish Manitoba as a leader in alternative energy like geothermal, ethanol, biodiesel and wind power."
The province has also made it clear it wants to maximise the economic benefits to Manitobans. The November EOI asked proponents to estimate the Manitoba-made content of their projects, indicating a preference for the "highest level" possible and pointing out that attracting wind related manufacturing will be an important consideration in developing the province's wind resources.
Whittaker expects "it will be a challenge" to stimulate local manufacturing through the planned RFP process, but Crone is optimistic. The province's 1000 MW target, he points out, will create a C$1-2 billion market for wind turbines. "We have had discussions with several manufacturers and we continue to do so -- and we are pretty pleased with what we are hearing."
The government also wants to encourage local ownership in the projects developed as part of the 1000 MW strategy. "There are many creative ways that developers have told us they are looking at to try to involve Manitobans in the ownership model."
On a separate track, and in addition to the 1000 MW target, the government and Manitoba Hydro are developing a process for buying power from smaller projects on farmland or planned as a community owned development. Although they have not settled on a mechanism, says Crone, "obviously there are some good examples" in Ontario, which is finalising the rules for a standard offer contract program it will launch this fall in Minnesota, where the state's Community-Based Energy Development initiative sets up a market structure conducive to such projects, and in Europe, where community ownership of small-scale projects provided much of the foundation for that market's growth. The amount of power the province will seek from smaller-scale projects has not been determined, says Crone.