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Credit Crisis - Canadian utility bails out third project

CANADA: Nova Scotia Power has stepped in to shore up another struggling wind energy project in the Atlantic province.

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The utility is investing about C$28 million for a 49% share in the 23MW Point Tupper wind farm, currently under construction in Cape Breton. It awarded a power purchase agreement for the C$55 million project in 2008 to Nova Scotia-based Renewable Energy Services (RES) with the expectation that it would be in service in November 2009. But difficulty securing finance in the midst of the global credit crisis delayed construction.

"This agreement gives us the financial support we need to move this project ahead," says Larry LeBlanc, CEO of RES. The Point Tupper project, using 11 Enercon 2.05MW turbines, is expected online later of this year.

Last year Nova Scotia Power took over the 45MW, C$120 million Nuttby Mountain wind project from Earthfirst Canada, a Calgary developer forced to seek bankruptcy protection in late 2009. In December, the utility's parent company, Emera, bought 50% interest in the 30MW Digby wind project owned by Skypower, the financially troubled Toronto developer. Skypower has since changed its name to Interwind as it sells off its solar and wind assets under court supervision. Details of the sale were not made public, but in February Emera announced it had also bought the half of the project owned by Interwind's community-based partner, Scotian WindFields.

The three projects were among seven awarded power purchase agreements in a request for proposals issued by the utility in 2007, but not the only ones to face financial issues. All seven were supposed to come online last year, in time to help Nova Scotia Power meet a legislated requirement to supply 5% of electricity from new renewable energy sources by 2010. Only RMS Energy's 51MW Dalhousie Mountain project managed to dodge the credit crisis and meet the deadline. The situation forced the provincial government to add a year to the utility's deadline for adding new green power.

Nova Scotia Power says five of the remaining six projects are now committed to be online in 2010, with Acciona Energy's 30MW Amherst project as the only remaining question mark.

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