Government opts for shared ownership -- Prince Edward Island project

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The government of Prince Edward Island has unveiled plans for a 30 MW wind farm in the eastern part of the Canadian province, outlining a unique structure that will give individual islanders a chance to own a piece of the project and take a stake in their energy future. "Our wind resource in Prince Edward Island (PEI) is one of the best in North America and we want all islanders to have the opportunity to share the benefits of that resource," says Premier Pat Binns. "At this point, it appears the best way to achieve that goal is with a government and co-op ownership model."

The proposed project will be owned by a subsidiary of the government-owned PEI Energy Corporation (PEIEC). A wind power co-operative offering shares to island residents will become a shareholder of the subsidiary company. Construction of the C$55-65 million project is tentatively scheduled to start in spring 2006, with the wind farm coming online that autumn.

PEIEC already owns the 10.56 MW North Cape Wind Farm at the western tip of PEI. "We know from our experience at North Cape that wind energy works in Prince Edward Island, and monitoring data tells us that the wind resource at the eastern tip of PEI is as strong as that in the western end of the province," says energy minister Jamie Ballem. "Our next step is to make sure we have all the necessary information on project design and financing to make the decision to proceed."

The province released a request for proposals for project design services at the end of May. In addition, looking to tap into the growing competition among financiers interested in investing in North American wind projects, it also issued a request for information on capital financing. "Project financing is the single biggest expense in a project of this nature," says Ballem. Once the most attractive financing terms and conditions are established, he intends to proceed with a request for proposals for project financing.

targets set

Last December, PEI passed legislation requiring the province's two public utilities to acquire at least 15% of their electricity from renewables by 2010 and 100% by 2015. The tiny island, the smallest province in Canada, with an area of 5660 square kilometres and a population of about 138,000, already gets about 4% of its electricity from the 13.56 MW of wind power already installed. The addition of the proposed 30 MW wind farm will bring the province about 10 MW shy of meeting the 15% target. Ballem says he expects to beat the 2010 deadline easily. "We understand that there are private developers looking at projects that could bring us to 15% by next year."

Toronto-based Ventus Energy recently announced plans to build the 9 MW Norway Wind Park just south of the PEIEC's North Cape site. Pending regulatory and corporate approvals, construction of the C$18 million project could begin this fall. CEO John Douglas points to December's legislation, which also offered a guaranteed feed-in tariff, though it still has to be set by regulation, to all generators larger than 100 kW. "We are encouraged by the government's progressive legislation and firmly believe that a fixed price tariff is the way to build a sustainable renewable energy industry in PEI," he says.

Douglas expects the Norway project to be the first of many for Ventus Energy. The company has secured the rights to nearly five million hectares of land in Canada and is currently developing more than 3000 MW of potential wind power projects on 25 sites in Ontario, Quebec, New Brunswick and Nova Scotia, in addition to PEI.

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