Some big projects, particularly in Ontario, that had been expected to come on line last year ran into permitting and approvals delays and were pushed into 2008, Hornung points out. Another reason for the slower progress has to do with the nature of the market in Canada, where most wind power is procured through government or utility sponsored request for proposal (RFP) processes. "The growth in the market is not going to proceed in a regular, linear fashion. It is going to be tied to installation dates associated with RFP requests," says Hornung.
Alberta led the way in 2007, reclaiming top spot among the provinces for installed capacity with the commissioning of three wind farms totalling 139 MW. Ontario also saw multiple installations with two projects totalling 77.6 MW, as did Prince Edward Island with three projects totalling 58.8 MW. Quebec and Nova Scotia each added a single project to round out the year (map).
German wind turbine supplier Enercon made major strides into Canada in 2007, unseating perennial market leaders GE Energy and Vestas (chart page 50). Enercon also took steps last year to solidify its position by becoming one of five turbine makers to participate in Hydro-Quebec's call for tenders for 2000 MW of wind power, which requires manufacturing facilities be established in the province to meet local content requirements. GE, Repower (controlled by Indian turbine supplier Suzlon but located in Germany) and two fledgling Canadian companies also joined the bidding.
The Quebec call for tenders was one of four RFPs that closed in Canada in 2007. Between them, they are expected to result in the signing of more than 2800 MW of wind power purchase agreements in coming months. Last year also saw British Columbia lay the groundwork for an all-source call for clean power to be issued this spring. It is also to release the details of a proposed program of standard offer power purchase contracts for renewable energy for projects with rated capacities of 10 MW and less. Ontario announced plans to add another 2000 MW of large scale renewables to its supply mix and it has also began awarding fixed-price, standard offer contracts for renewable energy. It ended the year with commitments for 65 small-scale, wind projects connected at the level of the distribution network for a combined capacity of 573 MW. "It was really a very important year in terms of laying down prospects for the future," says Hornung.
His assessment holds equally true for policy. Early in the year the federal government launched its EcoEnergy for Renewable Power (ERP) program, restoring the industry's C$0.01/kWh production incentive after a year in limbo. Encouraged by the federal lead, in the provinces a number of utilities and governments refined their strategies for wind power. New Brunswick Power accelerated its plans to add 400 MW to its supply mix within six years. Once that is in place by the end of 2010, says CEO David Hay, the utility "will be evaluating how we can move forward" with more. In Nova Scotia, the provincial government enacted mandatory renewable energy standards that helped prompt the province's monopoly utility to nearly double the amount of wind power it planned to buy this year. Governments in British Columbia, Newfoundland and Saskatchewan also issued energy strategies in 2007 with the potential to carve out a larger role for wind.
A key moment came in September, when the Alberta Electric System Operator (AESO) lifted a 900 MW cap on wind generation and replaced it with an integration plan that essentially lets the market decide how much wind will be built. "This sent a very important signal about our ability to integrate wind in the Canadian market, and Alberta is one of the more challenging markets to do that within," says Hornung. "To see the AESO move from a situation where it had a 900 MW cap to a situation where it is travelling through southern Alberta talking about building transmission for 3000 MW of wind is a significant turnaround."
August's filing by the Ontario Power Authority (OPA) of a 20-year integrated power system plan (IPSP) with the province's energy regulatory board was also an important step forward, says Hornung. The plan targets the addition of 3039 MW of wind power to the 1646 MW already online or under contract in the province -- and proposes the building of what the OPA calls "enabler lines" to tap into areas, particularly along the Great Lakes, with the greatest potential for cost effective, large scale wind power development. "Has the IPSP fully captured the potential for wind in Ontario? No, certainly not. But has the province tried to strategically lay out a plan to be able to go out and begin to capture its wind resources? Absolutely. We need to engender more of that sort of discussion right across the country," says Hornung.
Getting decision makers to see the broader potential for wind energy is one of the fundamental challenges facing the Canadian industry, he continues. "When I first came to CanWEA the issue was that utilities and governments and regulators and system operators all put wind in a box and the box was very small. They saw wind as inconsequential, a niche technology that was never going to amount to much. I think it is quite fair to say that wind has moved out of that box. Every utility has plans for some wind, every government talks about renewable energy and wind energy. System operators all across Canada are looking at ways to integrate wind and that's a positive development," he says.
"But in reality what has happened, though, is that wind has just moved out of that first box and into another box. The new box, I guess I would describe it, is that now people accept that wind can make a contribution and are working to facilitate that. But they still have a very clear line around it, or limitations on it. And that is why, in part, what happened in Alberta is very important in terms of breaking out of that."
Hornung points to the example of Quebec, where the industry will see tremendous growth over the next six years as projects winning contracts in Hydro-Quebec's current 2000 MW RFP, as well as a previous solicitation for 1000 MW, come online. "But at the same time, Quebec has indicated it has plans for two more 250 MW RFPs and that's it," says Hornung. "We're in a situation now where we need to maintain confidence in the market and allow people to see more opportunities here. We need to work to get all of the key stakeholders to see wind as a strategic resource, in a sense as Canada's next great energy opportunity."
Exporting green power
There are growing indications that some in the industry are starting to think outside the box. Last May, West Cape Wind Energy became the first independent producer to export wind power and renewable energy certificates (RECs) across the international border into the US, wheeling the electricity from a 19.8 MW project on Prince Edward Island into the New England Power Pool. In June, Hydro-Quebec received permission to sell RECs from two 54 MW wind farms in Quebec's Gaspésie region into the Massachusetts market. Early this year, Calgary-based TransCanada Corporation received approval from Maine's Land Use Regulation Commission for its 132 MW Kibby wind power project. TransCanada's Kiersten Tucker says the company sees the Kibby project as a complement to the 1127 MW of hydro and gas facilities it owns and markets in the region. More US projects are possible, she adds. "TransCanada continues to look for quality growth opportunities in the power markets we know best."
On the utility side, a new memorandum of understanding between Newfoundland and Labrador Hydro (NLH) and Nova Scotia Power to explore the possibility of bringing energy from NLH's proposed 2800 MW Lower Churchill hydro project to the Maritimes and New England markets could provide the backup needed to allow Nova Scotia "to go even further" in its plans to add more renewables to its fossil-fuel dominated supply mix, says energy minister Richard Hurlburt. In Prince Edward Island, Maritime Electric is in the process of developing a transmission plan that will bring the island province's wind resource to other markets.
Hornung expects interest in the cross-border opportunity to continue to grow. "If we are looking to the future, we're just not looking at the Canadian market, but increasingly at the North American market. But of course that cuts both ways, and fair enough."
Canada as a hedge
Hornung says many of the major US wind industry players, wary of the historical on-again off-again nature of that market, see the Canadian market as a hedge. The short list in Manitoba Hydro's current 300 MW wind power tender shows that, for Invenergy, Babcock & Brown and Airtricity at least, their explorations are starting to bear fruit. Part of the challenge of getting beyond the boundaries of the current market is that "there is a lot to do just to move forward with what we are already committed to," says Hornung.
Permitting delays are adding cost and complexity to getting turbines up, while transmission availability is already starting to affect the progress of projects in some jurisdictions. In Alberta, there are nearly 9000 MW of wind projects in the interconnection queue and most cannot move forward without new grid capacity. Ontario's plan to buy 2000 MW of renewables over the next several years will exhaust available transmission.
"I don't think there will be a problem with this round, but I think there is a very real need to get transmission enhancements made sooner than later. Otherwise we will hit a wall in terms of getting new generation built," says Mike Crawley of AIM Powergen.
But Hornung emphasises the hurdles are not unique to wind. "Any new form of electricity supply is going to run into these same challenges," says Hornung. "There's a real need for governments and regulators and utilities to wrestle with these issues and continue to look for better planning, more strategic planning, more efficiencies in order to meet not just renewable energy targets or wind targets, but simply electricity needs going forward."