Quebec adds 300 MW of wind #nlpoli

Enbridge will invest $330 million for a 50% stake in a 300 megawatt wind farm 400 kilometres northeast of Quebec City.

The Lac Alfred project will consist of 150 2MW REpower turbines with locally-manufactured blades, turbines and converters. Construction is scheduled to occur in two phases: the first began in June and will conclude in December 2012; the second will be completed in December 2013.

EDF EN says the wind farm after completion will supply electricity for about 70,000 homes. Provincial utility Hydro Quebec will buy the power under a 20-year agreement and also construct a 30km transmission line linking the project to the grid.

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Strangling energy innovation

The Telegram editorialists are finally putting it all together, at least when it comes to the provincial government’s energy company, the Muskrat Falls project and taxpayers:

It looks a lot like the province would prefer all its eggs in one basket. Or, more to the point, the province not only wants to run an energy warehouse, but actually wants to own it all as well. In its own way, that handcuffs consumers in this province. Because one company will decide the most effective way to produce and supply our power. We’ll just pay for it.

Monopoly control is exactly the premise of the Conservative’s energy plan released just before the last provincial election.  Very few people read it and there’s never been much debate about it. But make no mistake:  the heart of the plan is about strangling any alternative to whatever Nalcor wants to do.

It’s about absolute control.

And it’s about talking about wind energy while deliberately preventing any wind energy development outside of some very small token projects.

The reason is simple:  wind, small hydro and conservation would basically make the Muskrat Falls megadebt project utterly irrelevant.

The Telegram editorial notes that the Nova Scotia energy regulator just set a rate for private wind generating projects selling power into the provincial grid.  The rate is 13.9 cents per kilowatt hour.  As the Telegram reminds everyone, that’s below the 14.3 cents Muskrat Falls is forecast to cost;  and that’s if  - by some extraordinary miracle - the thing doesn’t go over budget.

Who pays the extra cost?

Why the people of Newfoundland and Labrador, of course. 

Full freight, plus profit.  Emera gets a share of the transmission cash inside the province as well.

Meanwhile, Nova Scotians will get a giant chunk of Muskrat Falls power for free;  if you want to take the $1.2 billion Emera will spend on a transmission line as payment for the power (it really isn’t), then the price they would pay comes out to be something like 3.5 cents per kilowatt hour.  If Emera wants more power than the stuff they get for free, they will pay about 9.5 cents per kilowatt hour for the extras.

Pretty sweet.

Well, except if you live in Newfoundland and Labrador.

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A cheaper, green alternative to Muskrat Falls

Natural resources minister Shawn Skinner has hit on a cheaper, less risky green alternative to the Muskrat Falls megaproject.

He didn’t mean to do that, of course.  he was actually trying to justify Muskrat Falls by claiming the project will give the province energy security by allowing the island portion of the province to import power from the mainland in the event of an emergency.

The major way of doing that would be through the tie to Nova Scotia, according to Skinner. As the Telegram quotes Skinner:

“We’re anticipating to mostly use it to export excess capacity, excess electricity into the Atlantic provinces and the northeast United States, but in the event of a catastrophe … it would be possible for us to import electricity,” Skinner said in a recent interview.

That’s certainly true, but that isn’t a rationale for building a very expensive dam in Labrador and a very expensive power line from that dam to St. John’s especially when the island portion of the province doesn’t need the juice. 

But let’s just allow for a second that the island needs power. Skinner has actually given Newfoundlanders and Labradorians a far better option to meet the province’s energy needs that building Muskrat Falls.

At $1.2 billion, the line to Nova Scotia would actually meet the island’s energy needs and give the energy security Skinner is talking about. Nalcor or Newfoundland Power could import power from the mainland if it is needed. 

But more importantly the line from Nova Scotia and an upgrade to the line across the Isthmus of Avalon would help bring to market all that stranded central Newfoundland hydro seized by government in the botched expropriation.  In addition, it would allow for wind and new small hydro projects on the island.  Right now, there’s no place for that extra power to go when it isn’t needed on the island.  A link to Nova Scotia would take care of that.

And all that wind generation and small hydro – far cheaper than Muskrat Falls  - would help displace the thermal generator at Holyrood with green energy that is far cheaper than the $5.0 billion dam and power line project that is at the heart of Danny Williams’ legacy project.

The line would cost $1.2 billion compared to $5.0 billion for the dam and line to St.John’s.  Emera is already committed to the Nova Scotia line.  If Nalcor split the bill 50/50, then the actual cost of Nalcor would be a mere $600 million plus annual operating costs.  Nalcor and Emera wouldn’t need a federal loan guarantee or any federal financial help at all in that scenario.  Nalcor could fund its share from offshore oil revenues.  Heck, the provincial government could build it’s share of the line right now for cash since it has billions on hand in temporary investments.  Talk about the perfect go-it-alone, stand-on-your-own-two-feet, “have province” option.

On top of that, there are plenty of private operators ready to build wind projects on the island;  the only thing stopping them right now is Nalcor and government policy.  In other words, there’s no practical reason not to pursue the cheaper, green options.  Private sector companies could build the projects either alone or in partnership with Nalcor. 

Unfortunately, the tie to Nova Scotia is the last thing on the list of things to be built for the current version of the Lower Churchill. And right now Skinner and his colleagues are obsessed with a very expensive very risky project that could wind up going way over budget. 

Given the soft markets for electricity in the near-term, it would actually make economic sense to wait a while to build the entire Lower Churchill until the markets will buy the power with long-term deals.  That’s much better for consumers in the province who, right now, are staring at a government hell-bent on doubling their electricity rates by 2017 and saddling them with $5.0 billion in debt on top of the $12 billion they currently owe.

There’d be an added bonus in building the Nova Scotia line first:  Nalcor would have export infrastructure plus it would have a megaproject to its credit to prove to investors it can deliver complex engineering work on-time and at or under budget.

On top of that, a policy that encouraged private sector investment for wind development would go a long way to reversing the image the province has gained since 2003 of a banana republic where the government is closed for business.

Cheap, green energy to meet the needs on the most populous part of the province at a low cost and with the potential to bring new revenue from exports?

Job done.

No wind, please. We’re Nalcor.

The Telegram reported on Saturday that the provincial government’s energy company isn’t really interested in developing wind energy until after they get the hugely expensive Lower Churchill up and running.

Oh yes, and they also want to sell power to Ontario some day in the misty future despite the crowd up along having a bit of a glut of power.

Regulars readers of these e-scribblers will find the first one to be a gobsmacking revelation of the magnitude of finding out that Liberace was gay.

The second one’s just funny because it really a case of Nalcor putting a very brave face on a very badly bungled job.  After all, they rejected flatly Ontario’s interest in building the project five years ago. 

Then after another five years of trying desperately to interest Ontario, Quebec and anyone in northeastern North America with a electric socket in the power they came up with nothing other than this brilliant plan:

• make the people of Newfoundland and Labrador bear the entire cost of the project and,
• let Nova Scotians get 35 terawatt years of electricity for free.

And it is funny. 

Your humble e-scribbler doesn’t relish the thought of the New Brunswick- like electricity prices that are headed to consumers on the island – guaranteed to at least double within the decade – and the extra burden of hauling around all that public debt but what else can you do but laugh?

If you didn’t laugh at the sheer stupidity of the idea, you go completely off your nut.

Heck, you might even believe that the Conservatives were seriously interested in sound management of the province’s finances.

Right. 

Laughter it is, then.

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Williams, Dexter ink secret energy deal …but with whom?

A service contract between a public authority and a private sector concessionaire, where the public authority pays the concessionaire to deliver infrastructure and related services, Typically, the concessionaire, who builds the infrastructure asset, is financially responsible for its condition and performance throughout the asset lifetime, or the duration of the agreement.

P3 Canada Fund definition of public-private partnership

Newfoundland and Labrador Premier Danny Williams and Nova Scotia Premier Darrell Dexter have apparently signed a deal to build underwater electricity transmission between the two provinces in partnership with a private sector company or companies.

Williams revealed the agreement when he launched into yet another tirade against the province of Quebec during a hastily-called news conference in St. John’s last week.

Williams said that the two provinces applied for federal funds in late June under the federal government’s public-private partnerships infrastructure funding agreement.

But that’s all he said about the secret deal.

Six weeks after the provinces reached an agreement, the people of both provinces still don’t know when the deal was signed, the conditions of the agreement, how much taxpayers will be on the hook for or the proposed financial arrangements with the private sector company or companies the two governments are or will be partnering with.

In his scrum, Williams very obviously avoided giving a simple, direct answer to a question on costs. He said only that the project cost would be billions depending on which combination of dams and transmission routes NALCOR built.

The cost of the project is currently estimated at more than $14 billion, including an interconnection to the United States. A study completed for the Nova Scotia government earlier this year  - reported by the Chronicle Herald but no longer on line - put the cost of the interconnections between $800 million and $1.2 billion.

Williams also made the false statement in his scrum that the decision of the Regie de l’energie – presumably meaning the May decision – had blocked NALCOR transmission through Quebec.

Meanwhile, though, the public doesn’t even know the name of the company or companies involved in the new secret deal on an intertie to Nova Scotia.

And obviously, there has to be a private sector partner or partners involved even if the two provincial governments haven’t said anything about that aspect of the deal.

The federal government established the $1.2 billion P3 Canada Fund in 2007 to “develop the Canadian market for public-private partnerships for the supply of public infrastructure in the public interest.” The fund will supply qualifying projects with a maximum of 25% of the projects qualifying direct construction costs. 

Typically, public-private partnerships include private involvement in everything from design to the long-term operation of public infrastructure. As the fund’s annual report puts it,

[t]he P3 procurement model is unique in that the private sector assumes a major share of the responsibility for the delivery and the performance of the infrastructure – from designing the concept, architectural and structural planning to its long-term maintenance.

The public sector gets needed infrastructure at reduced risk and cost.  Among the examples cite din the annual is the Confederation Bridge between PEI and New Brunswick.

In order to qualify for assistance under the fund, the private sector partner must have a substantive, continuing role in the project.  It must design or build the project and finance or maintain and operate it. [Round Two application, s. 5.2] 

In a P3 project, the private sector partner would also typically share in the profits of a long-term project as well as adopt risk. In some scenarios, as the application appendices suggest, the project may offer potential spin-off money-making opportunities for the private sector partner separate from the core public interest in the project.

Infrastructure assets developed by public authorities are rarely used to generate additional revenue. In some instances, private sector providers are motivated to develop opportunities for revenue beyond the public authority payment stream and this could be used to reduce the cost to the public authority.

Applicants must submit a business plan for the project between September 2010 and March 2011.

While Danny Williams mentioned a connection between the secret deal and the Lower Churchill, the Nova Scotia intertie is a separate project.  

It’s also bizarre that Williams mentioned possible shipment of power from Nova Scotia to Newfoundland and Labrador.  Demand projections used in the Lower Churchill environmental review show that demand on the island isn’t strong enough to support development of the Lower Churchill, let alone warrant importing power from Nova Scotia.

And if the intertie carried Lower Churchill power, there’d be no need to send Nova Scotia power into Newfoundland and Labrador.

A connection to Nov Scotia without the Lower Churchill would facilitate the development of untapped alternate energy potential on the island of Newfoundland.

To do that, though, the provincial government would have to abandon the 2007 energy plan and Williams’ obsession with the Lower Churchill.

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Interconnection key to reliable wind power

A recent study from the University of Delaware’s College of Earth, Ocean and Environment shows that a network of offshore wind sites can be managed to ensure consistent power generation from the system. [Full report in pdf]

One of the major problems with single wind farm sites is the unpredictable nature of generation.  Power only flows when the wind blows and there is no guarantee when it blow or if the wind will be strong enough to generate power.

Researchers at CEOE analysed five years of data from sites stretching 2500 kilometres along the east coast of the United States. By simulating an interconnection they demonstrated that the system could provide consistent, sustainable power.  While other studies have shown the benefit of interconnection, the key to success in this case lay in the wide geographic dispersion of the wind farms.

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Samsung signs energy deal with Ontario

Under a deal announced Thursday, Samsung Group of South Korea will develop 2500 megawatts of wind and solar energy in Ontario at a cost of $7.0 billion.

Samsung will also create 16,000 manufacturing jobs in Ontario.

Meanwhile, in Newfoundland and Labrador, the energy warehouse…

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An energy warehouse

How can it be that Prince Edward Island is getting 15% of its energy needs met by wind power but all Newfoundland and Labrador has are two small projects pumping 27 megawatts each and a“demonstration project” at Ramea?

And that’s it!

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Scoping out the wind energy deficit

The current issue of The Scope includes a front page feature on wind energy in the province or – to put it more accurately - the lack of any serious development of wind energy.

Maybe one of the answers is that everyone talks about an island when in fact there is a huge landmass on the mainland potion of the province that is ripe for wind energy development.  Heck it’s even got a connection so people can ship the power to where it is needed on the eastern part of the continent.

There’s just one obstacle.

Care to guess what it is?

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Innovation?

A 10 minute video from the provincial government’s energy monopoly corporation is titled “Innovation in Renewable Energy”.

So what’s so innovative about damming off a river to generate electricity and running transmission lines to market?

Why nothing at all, of course, and in the case of the Lower Churchill project, the ideas from transmission line running around Quebec to the entire project itself have all been around for about 45 years.

There’s even the highly unimaginative and incorrect claim that running a power line down to Soldier’s Pond will “displace” the diesel generators at Holyrood.

And the project is a heckuva long way from starting if the current trends continue.

The only real innovation mentioned is in the discussion of the Ramea wind-hydrogen-diesel test project. 

But that’s one project, it’s a small project and it’s more than five years away from anything significant.  Meanwhile, the rest of the world is much farther along in developing alternative energy technologies.

Maybe what the provincial government should be doing is figuring out a way to turn bullshit into energy.  If that was the case, videos like this show they’ve already got a powerhouse that could displace the entire global output of greenhouse gases until the end of time.

At least when it comes to the Lower Churchill, the current administration has shown it is highly adept at recycling  even if it’s complete lack of planning beyond what was done 20 years ago is painfully obvious.

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Samsung and Ontario wind

Electronics giant Samsung is looking at building a 200 megawatt wind farm in Ontario.

The deal could include manufacturing of wind turbines or components as well as solar panels in Ontario.

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Megamania: NL falls farther behind in wind energy development

While it has huge potential in wind energy, Newfoundland and Labrador currently has less than 60 megawatts in production or in development.

There are no plans for more and the province’s 2007 energy plan places tight restrictions on development of any additional wind energy.  The plan talks about potential but ensures that there is little chance the potential will be developed.

For electricity, the energy plan is focused on development of the Lower Churchill to the exclusion of all else.

As a rest of the political obsession with turf wars and 40 year old megaprojects, the province  - already well back in the pack - is falling farther and farther behind in a race where it should be leading.

1.  Hydro Quebec is pushing ahead with development of new energy technologies.  It’s looking for 500 new megawatts of wind energy.  That’s on top of existing projects and the ones in train.

Hydro-Québec has invited municipalities and native groups to compete for 500 megawatts of wind power contracts. Wind farms in the utility's third call for tenders must not exceed 25 megawatts.

The company’s strategic plan forecasts upwards of 4,000 megawatts of wind generation over the next four years.

2.  Wolfe Island wind farm official opened.  Canadian Hydro officially opened the Wolfe Island wind project this past week.  The project is the second largest wind farm in Canada and generates slightly less than 200 megawatts.

3.  Norway just installed the first floating turbine to harness offshore wind energy.

4.  Work on a $1.5 billion offshore wind farm in Rhode Island is continuing apace.

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Company behind Fermeuse wind power project seeks bankruptcy protection

Skypower Corp, the company behind a wind power demonstration project at Fermeuse, Newfoundland filed for bankruptcy protection on August 12.

Skypower is owned 50% by Lehman Brothers which filed for bankruptcy last year in what was the largest bankruptcy filing in American history.

The Canadian renewable energy company is now seeking to sell all its assets.  It reportedly has sufficient funds  - $15 million – to see it through the asset sale process.

The Fermeuse project involves nine turbines with a combined capacity of 22 megawatts.

There’s no word on what will happen to the Fermeuse project.

Update:  The Fermeuse project was certified operational on June 30, 2009. Power from the project is sold to Newfoundland and Labrador Hydro under a 20 year power purchase agreement signed in 2007. 

The project, originally proposed by Vector Wind Energy was later taken over Canadian Hydro Developers on December 14,  2006.  CDH turned the project over to Skypower two weeks later.

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