Friday, July 29, 2011

CCPA report sets renewable targets for Saskatchewan

The Canadian Centre for Policy Alternatives (CCPA) released a report yesterday entitled “Transforming Saskatchewan’s Electrical Future: The Public Policies Needed to Build a Renewable Energy Society in Saskatchewan.” The report calls on Saskatchewan to phase out its fleet of coal-fired electrical generating stations and use wind, solar, small-scale hydro and biomass to transform Saskatchewan into a renewable energy leader.

The CCPA report recommends that the province set several targets, including:

- Saskatchewan should supply at least 40 per cent of its electricity needs from renewable energy sources by 2020, which would more than double the contribution of renewable electricity to the province's grid by the end of the decade;
- By 2018, SaskPower should install 600 megawatts (MW) of wind power, 125 MW of small-scale hydro and 125 MW of biomass generation;
- Coal-fired power plants should be gradually phased out in Saskatchewan. Over the next eight years. 400 MW of coal-fired power production could be shut down.

Saskatchewan is currently doubling the wind power capacity in the province right now and is going from 4.7 percent to 8.5 percent of total capacity by 2015 which will be one of the highest percentages of wind power of any North American jurisdiction.

The full report is available for download here:

Thursday, July 28, 2011

Metso to supply combined heat and power biomass boiler plants to Finland and Latvia

Metso will supply boiler plants for the combined heat and power (CHP) cogeneration production to Fortum Power and Heat Oy in Järvenpää, Finland and to Fortum Jelgava SIA in Jelgava, Latvia. The plants will provide district heat to the towns of Järvenpää and Tuusula in Finland and Jelgava in Latvia, as well as electricity to the grid.

For both Järvenpää and Jelgava, Metso’s EPC delivery is a full-scope solution from fuel feeding to flue gas cleaning. The plants are designed to use biomass fuels including peat and some clean recycled wood, replacing natural gas and oil in the existing plants. The investments help to reduce CO2 emissions and increase the use of local biofuels in both the regions of Järvenpää and Jelgava.

The two boiler plants with approximately 70MWth steam capacity will use bubbling fluidised bed (BFB) technology. The boilers will produce high pressure steam of 117 bar(g) and 527 °C. The annual production of the Järvenpää plant is about 280GWh of heat and about 130GWh of electricity, whereas the Jelgava plant produces 230GWh of heat and 110GWh of electricity.

Fortum is currently expanding its CHP business in the Baltic Rim area. Their first CHP plant in Estonia, supplied by Metso, was started up in 2009, and they continued on to complete several other projects in the area. In these CHP plants Fortum invests in renewable energy production with high power-to-heat ratio. The Jelgava plant is the first biofuel plant of this scale in Latvia.

Biomass combined heat and power and cogeneration is particularly well-suited to Northern First Nations communities in Canada which have abundant biomass resources but limited or non-existent access to natural gas for heating or electricity from the grid. In Saskatchewan, I would expect that the First Nations Power Authority would be looking carefully at biomass combined heat and power projects for northern First Nations communities. There are numerous other opportunities across Canada for combined heat and power and cogeneration projects in the far North of Canada where heat and electricity is generated from diesel in many remote locations.

Wednesday, July 27, 2011

AEP suspends carbon capture and storage plant in the US – Stantec awarded $30 million CAD carbon capture and storage contract in Saskatchewan

In a blow to proponents of clean coal technology and the prospects for carbon capture and storage (CCS) in the United States, American Electric Power (AEP) has decided to suspend plans to build a commercial-scale carbon-capture plant at its Mountaineer coal-fired generating facility in West Virginia. AEP, which for nearly two years had been successfully testing a chilled ammonia system provided by Alstom Power at the Mountaineer plant, said that the decision to terminate its agreement with the U.S. Department of Energy was based on the uncertain status of U.S. climate policy and the weak US economy.

The commercialization of CCS technology is vital if owners of coal-fueled generation in the US are to comply with potential future climate regulations without prematurely retiring efficient, cost-effective generating capacity. The problem AEP is facing is that as a regulated utility in the US, it is impossible for AEP to get regulatory approval to recover their share of the costs for validating and deploying the CCS technology without US federal requirements to reduce greenhouse gas emissions already in place. The uncertainty in the US regarding greenhouse gas emissions also makes it difficult for utilities like AEP to attract partners for financing.

Meanwhile, in Canada, SaskPower continues to move forward with the $1.24 billion CAD Boundary Dam Integrated Carbon Capture and Storage Demonstration Project in southern Saskatchewan. The Boundary Dam Project which will be among the first commercial-scale carbon capture and storage facilities in the world when it begins operating in 2014.

On July 15, 2011 SaskPower announced the award of a $30 million CAD contract to Stantec to provide engineering consulting services during the design and construction phase of the Boundary Dam Integrated Carbon Capture and Storage Demonstration Project.

Stantec is one of several major firms involved in the Boundary Dam project in Saskatchewan, which will see Unit 3 at Boundary Dam Power Station rebuilt and equipped with a fully-integrated carbon capture system that will reduce greenhouse gas emissions by one million tonnes per year. SaskPower approved the Boundary Dam project earlier this year and construction started in April, 2011. The new generating unit at Boundary Dam will have 110 MW of capacity. Carbon dioxide (CO2) captured at Boundary Dam will be sold for enhanced oil recovery operations. Sulfur dioxide (SO2) will also be captured and sold to manufacturers of sulfuric acid.

Tuesday, July 26, 2011

Sea Breeze Power Corp. closes $12 million CAD sale of 99 MW Cape Scott Wind Farm in British Columbia to IPR - GDF SUEZ North America

Sea Breeze Power Corp. (“Sea Breeze”) is pleased to announce that it has closed an “Asset Purchase” transaction (the “Transaction”) with IPR - GDF SUEZ North America (“IPR - GDF SUEZ”) for the 99 MW “Phase 1” of the Knob Hill Wind Farm
project (the “Project”).

Total transaction payments expected to be received by Sea Breeze (as of the date of commercial operations) will amount to approximately $12 million CAD, which include “milestone” payments amounting to $1,865,000 CAD, triggered at the Transaction’s close. Additional milestone payments will be paid as the Project moves through construction and into commercial production. IPR - GDF SUEZ will provide 100% of the equity funding for the Project.

“We are delighted to announce the completion of the transaction for Phase One, which represents the first of several high-quality wind energy projects that Sea Breeze has been developing,” said Paul Manson, CEO of Sea Breeze. “IPR - GDF SUEZ is a world market leader in energy generation.”

The Project has been renamed the “Cape Scott Wind Farm” as an element of the Transaction. Construction for the Project is expected to begin during the summer of 2011, following the completion of amendments to the existing environmental approvals for the wind farm. The amendments relate to the Project’s transmission line to Port Hardy.

The Project, based on a 20-year Electricity Purchase Agreement (“EPA”) executed with British Columbia Hydro and Power Authority (“BC Hydro”), represents the first of two phases for development of the Cape Scott Wind Farm site. IPR - GDF SUEZ holds a “Right of First Offer” to acquire the balance of the permit land available for Phase 2.

In addition to payments for the Transaction, Sea Breeze will receive an ongoing royalty based on a percentage of gross revenue generated by the project through the 20 year BC Hydro EPA, and holds an option to acquire a 10% equity interest in the Project

The Project enjoys strong support from residents of the region, and the Quatsino, Tlatlasikwala and Kwakiutl First Nations, on whose traditional territories the Project is situated.

Source: Sea Breeze Corp. Press Release

Friday, July 22, 2011

1046 MW of renewable energy contracts awarded under Ontario FIT

The Ontario Power Authority has awarded feed-in-tariff (FIT) contracts to 19 wind projects totalling 1018.4 MW and six solar PV projects totalling 27.5 MW. The projects are located in the southwestern part of the Canadian province of Ontario and will be brought online through the Bruce-to-Milton transmission reinforcement project.

The complete project list is available here:

Wednesday, July 20, 2011

Sunny Saskatchewan a potential solar power leader

I have reposted an interesting article in the Vancouver Sun yesterday. It is only a matter of time before a solar PV developer recognizes the potential in Saskatchewan and starts development of a utility-scale solar PV project. I was quite surprised when SaskPower announced the winners of the 50 MW Green Options Partners Program earlier this month and not a single solar PV project was awarded.


Given few places in the world are better suited to deploying the solar solution, the potential exists to build a major solar industry in Saskatchewan. And while the end of Saskatchewan's renewable energy incentive last March may be a threat to existing solar companies, it is also an opportunity to create better policy and programs to strengthen the industry.

Generally sunny conditions in Canada mean the potential for solar power generation here is significantly superior to many other countries, including Germany, the nation with more than 50 per cent of the world's operating solar technology. In Canada, the best conditions for solar are in the prairies, and especially Saskatchewan, which has the most bright sunshine of any province.

That's why the Canadian Solar Industries Association (CanSIA) - a trade association that represents 650 solar companies - anticipates big growth for their industry here and across the country. By 2025, CanSIA hopes to see solar energy widely deployed throughout Canada, its market competitiveness such that the government incentives are unnecessary, and recognized as an established component of Canada's energy mix. They envision a solar industry that supports more than 35,000 jobs and displaces 15 million to 31 million tonnes of greenhouse gas emissions per year - providing a safer, cleaner environment.

CanSIA believes that Saskatchewan has the potential to be a solar energy leader given its excellent solar resource, rising electrical demand, distributed power-consumer base, the need to replace aging generation infrastructure, an existing power supply that is more greenhouse gas intensive than most other provinces, as well as aggressive targets for energy conservation (150 MW reduction by 2017).

They point out that solar energy technology is quickly deplorable, scalable and a complementary option to the available solutions for securing a clean, affordable and reliable energy mix.

Of course a solar industry can't take off without some public incentives. It is standard practice to support a new industry until it can stand on its own and CanSIA has proposed its wish list of policy measures to the Saskatchewan government. First, the province should explore innovative financing mechanisms that would provide private business with better access to capital through measures such as government-backed loans, utility bill financing and the use of municipal tax incentives and loans assigned to property.

Second, there should be a transition from programs (such as Saskatchewan's Net Metering Rebate that ended in March) that provide an incentive for installing solar panels to programs that reward energy production performance. The old program provided 35 per cent rebates of the total system installed up to $35,000. CanSIA points out that while the rebate was popular with consumers, it sometimes led to solar installations that operated sub-optimally, given all systems received the same rebate regardless of actual performance.

A better approach would be a program that pays an incentive only on electricity produced. This would create an incentive to ensure any system installed performs optimally. It would also prevent funds being spent on under-performing equipment and maximize the return on investment for public funds.

This approach, used in a number of jurisdictions around the world, pays solar producers a premium price for excess electricity they produce for sale to the energy utility. The premium price helps to build the industry and recognizes he social and environmental benefits of renewable power over fossil fuels.

CanSIA also recommends that whatever policy is adopted in Saskatchewan should be stable. Rebates and incentives that last for a year or two and then end abruptly lead to a boom and bust cycle for the industry. Programs that are put in place should be designed to ensure the industry grows sustainably until it can stand on its own without public funding.

CanSIA points out that solar has many spin off benefits. If 20 MW of solar were installed in Saskatchewan in 2012, for example, 700 direct jobs and many more indirect jobs would be created. As industry capacity and momentum increased in subsequent years, Government investment in the industry could decrease, as would the cost of producing solar power due to economies of scale, industry experience and expertise and consumer awareness.

China Longyuan Power enters Canadian wind market

China's largest developer of wind power projects is making its first leap into the global wind energy market through an investment in Canada. China Longyuan Power Group Co., Ltd. has signed an agreement with Ontario-based Farm Owned Power (Melancthon) Ltd. under which Longyuan will take an equity share in a 100 MW wind farm that Farm Owned Power is building in Shelburne, Ontario. Xie Changjun, general manager of Longyuan, said that Canada presented an attractive market because of its rich wind power resources and excellent supporting policies. As of the end of 2010, Longyuan had built a total of 6.56 GW of wind power capacity in China, the single largest amount in Asia and the third largest in the world, according to a report by Denmark-based consultancy BTM Consult.

Source: Climate Change Business Journal

Tuesday, July 19, 2011

7.9 MW rooftop solar PV project in Ontario moves forward

Solar & Alternative Technology Corp. (Mississauga, Ontario), solar panel manufacturer Soventix Canada Inc. (Toronto, Ontario), and Hiram Walker & Sons Ltd. (Windsor, Ontario) have formed a partnership to build a 7.9 MW solar PV rooftop installation at Hiram Walker's Pike Creek warehouse in Windsor. This will be the largest rooftop project in Ontario and one of the larger rooftop projects in the world today. Solar & Alternative Technology Corp. ("SAT") and Soventix have signed a 20-year lease to rent the facility's roof surface for the installation, which will be the size of about 24 Canadian football fields, the partners stated in a press release. Hiram Walker stated that the revenue generated through the lease will be re-invested in higher efficiency boilers that will help the facility reduce its energy consumption by 20%. SAT has a separate agreement with Soventix to purchase 41.5 MW of solar panels over the next three years.

Friday, July 15, 2011

Quebec sets targets for greenhouse gas emissions reductions

Amidst growing concerns about the effectiveness and public acceptability of cap-and-trade systems for reducing emissions of greenhouse gases (GHG), the government of the Canadian province of Quebec has moved forward with a climate change action plan that includes such a GHG emissions credit trading system. The new plan sets a goal of reducing GHG emissions in the province by 20% below 1990 levels by the year 2020. Under the plan, the Quebec government will establish an overall GHG emissions limit, issue free emissions credits to about 100 large industrial emitters, and auction off additional credits until the limit is reached. These credits and their derivatives would be traded on the Montreal Carbon Exchange. Quebec's decision to use a cap-and-trade system comes as prices on the European Union Emissions Trading Scheme (ETS) have fallen to their lowest level since the recession-the equivalent of less than $18 U.S. per credit-and as allowance prices in the U.S. Northeast's Regional Greenhouse Gas Initiative (RGGI) fell to $1.89 in RGGI's most recent auction in June.

Source: Climate Change Business Journal

Thursday, July 14, 2011

Recent Developments in the Canadian Renewable Energy Sector

I recently authored an article titled Recent Developments in the Canadian Renewable Energy Sector which was published in the June, 2011 Guide to Energy & Natural Resources by CorporateLiveWire. The article is available on our firm website at

Friday, July 8, 2011

Vestas receives wind turbine orders in Mexico, Sweden and Brazil

Wind turbine orders amounting to nearly 269 MW of generating capacity across several model categories have been added to the backlog of Vestas Wind Systems A/S (Randers, Denmark), the company reported on July 5, 2011. In recently signed contracts, Vestas will deliver 180 MW of its V90, V100, and V112 turbines to Eolus Vind for installation at wind farms in Sweden, 30 units of the V100-2MW turbine to Atlantic Energias Renovaveis S.A. for installation at the Renascena V and Eurus II wind power plants in the Rio Grande do Norte region of Brazil (previously reported on this blog) and 16 units of the V90-1.8MW turbine to REM Generacion Electrica Mexicana for a 28.8 MW project in Chiapas, Mexico. The contract with Eolus Vind includes an option for delivery of another 40 MW of turbines. The contracts with Atlantic Energias and REM include service and maintenance agreements including deployment of Vestas’ Active Output Management (AOM 4000 and 5000) packages.

Vestas is the predominant supplier in Saskatchewan and recently won a contract to supply 16 V82-1.65 MW wind turbines for the Red Lily Wind Project and previously supplied 83 V80-1.80 MW turbines to the Centennial wind farm in Saskatchewan. Vestas also supplied 63 V82-1.65 MW turbines to the nearby St. Leon wind farm in Manitoba. It is anticipated that Vestas would like to continue their dominance of the Saskatchewan market by supplying turbines for the 175 MW RFP and to the recently announced 25 MW Green Options Partners Program lottery winners.

Wednesday, July 6, 2011

SaskPower releases winners of Green Options Partners Program lottery

SaskPower received 302 applications for the Green Options Partners Program lottery, from which the following 13 projects totalling 46 megawatts (MW) were randomly selected:

Gaia Power Inc. - Wind - 9.90 MW
Gaia Power Inc. - Wind - 9.90 MW
Windlectric Inc. - Wind - 5.00 MW
Torquay Oil Corporation & Three Point Energy Services Inc. - Flare gas - 0.13 MW
Torquay Oil Corporation & Three Point Energy Services Inc. - Flare gas - 0.26 MW
ARC Resources Ltd. & Three Point Energy Services Inc. - Flare gas - 0.52 MW
Natural Energy Partners Ltd. - Flare gas - 3.50 MW
Natural Energy Partners Ltd. - Flare gas - 3.50 MW
Natural Energy Partners Ltd. - Flare gas - 3.50 MW
Saskatoon Light & Power - Turbo expander - 1.00 MW
Saskatoon Light & Power - Landfill gas - 1.60 MW
Deep Earth Energy Production Corporation - Geothermal - 5.00 MW
Rocky Mountain Power (2006) Inc. - Hydro - 2.00 MW

Tuesday, July 5, 2011

China terminates wind subsidies and Canada prepares for litigation

The Chinese Special Fund for Wind Power Manufacturing (the Fund) has recently been challenged by the United States at the World Trade Organization (WTO) as being discriminatory and in violation of the WTO Subsidies Agreement. In response, China terminated the program. The Ontario feed-in-tariff (FIT) has also been challenged at the WTO by Japan. However, Canada appears to be preparing for litigation in defence of the FIT program.

China's installed wind power capacity ranks second in the world, ahead of Germany and behind the United States as a result of dramatic growth over the past four years. According to estimates in the claim of the United States, Chinese grants under the Fund have amounted to hundreds of millions of US dollars since 2008. Acting on a request by the United Steelworkers, the United States challenged the Fund as a WTO-prohibited import substitution subsidy because it makes grants to Chinese wind power equipment manufacturers contingent on using domestic parts and components instead of foreign-made parts and components. The termination of the Fund does not mean that China will need to stop supporting wind energy production or the manufacturers of wind power equipment. China may well create a similar program in a different form, no longer requiring the use of domestic over imported goods as a condition for obtaining governmental subsidies.

The Ontario FIT has similar local content requirements contingent on receiving the incentive. As previously reported, the WTO will establish a WTO panel to adjudicate the dispute between Canada and Japan. If the FIT is found to be inconsistent with WTO rules, Canada will be required to withdraw the subsidy without delay. If it fails to do so, Japan will be authorized to impose trade retaliatory measures on Canadian products.

It is unclear how this will develop as there is a provincial election soon in Ontario and the conservative opposition party, currently surging in the polls, has vowed to axe the FIT. Assuming the conservative party take control in Ontario, a ruling in favour of Japan would provide a politically expedient opportunity to terminate the FIT. However, it is clear that the FIT has generated considerable jobs and investment in Ontario and it may be that the domestic content requirements of the FIT are simply amended to comply with WTO rules.