Monday, April 30, 2012

CanBio conference focusing on biomass in a Canadian energy strategy in Edmonton last week a great success

Many thanks to the organizers, in particular Noam Sugarman of CanBio for a very well-organized, insightful and practical conference. Talking with other attendees, the sentiment was shared. This was the first CanBio event I presented at and was very impressed with the number of presenters and cross-section of attendees of all sectors of the bioenergy industry.

As a renewable energy lawyer based in Saskatoon, I know there is increasing interest in biomass projects in Saskatchewan. I was very pleased to see representatives from Prince Albert Pulp and Nipawin Biomass at the conference but there is certainly scope for much broader engagement with CanBio in Saskatchewan.

If biomass developers, suppliers, forestry companies, First Nations or others active in Saskatchewan are interested in learning more about CanBio, I am happy to make introductions.

Tuesday, April 24, 2012

Canadian Solar and SkyPower enter into Purchase and Joint Venture Agreement

Solar PV leaders, Canadian Solar Inc. and SkyPower Limited have entered into a Purchase and Joint Venture Agreement, which creates a powerful team comprising of one of the world's largest solar companies and Canada's largest owner and developer of solar projects to build and deploy solar energy solutions in Ontario, and to jointly develop solar projects internationally in select emerging markets.

Under the agreement, Canadian Solar will acquire a majority interest in 16 solar projects representing approximately 190-200MW DC from SkyPower. Each of these projects was awarded a 20-year power purchase contract by the Ontario Power Authority. Fifteen of these contracts were issued under Ontario's Feed-In-Tariff Program, and one was issued as part of Ontario's Renewable Energy Standard Offer Program. These projects are in the advanced permitting stage and are expected to commence construction in 2013 and be fully operational in 2014. They are expected to generate over $800 million CAD in revenue for Canadian Solar.

Canadian Solar and SkyPower have also agreed to form a 50:50 international joint venture focused on developing solar power plants in select emerging markets. The JV company expects to start generating revenue from this global strategic initiative within the next two to three years.

The transaction price is approximately $185 million CAD to be paid at certain milestones. Canadian Solar will assume certain security deposits, which are typical with FIT contracts. In conjunction with the transaction, a five-year warrant is being issued to SkyPower for 9.9% of Canadian Solar's outstanding shares, with a strike price of $5.00 USD.

Source: Canadian Solar Inc. Press Release

Monday, April 23, 2012

Four new biodiesel plants proposed in Finland as Spain considers local preference for EU biodiesel over that from Argentina

The Finnish forest industry is planning for a total of four new biodiesel plants in Finland in the coming years producing a total of 700 million liters of fuel per year sufficient to fuel up to 600 000 vehicles. One project has completed the permitting process and has been granted approval - the forestry giant UPM is to build a pulp residue biodiesel processing plant in Lappeenranta. Construction is scheduled to begin in summer 2012. The UPM plant will produce 100 000 tonnes of fuel production in two years' time. Three of the four proposed biodiesel projects are expected to receive European Investment Bank and EU funding decisions at the end of this year. If all the plans materialize, the Finnish target to increase renewable sources in transportation to 20 percent will be met.

Finnish plans to ramp up biodiesel production come as Spain and Argentina are embroiled in dispute curtailing multimillion-euro imports of biodiesel from Argentina. Spain has indicated that they may give preference to European Union-produced biofuel in meeting compulsory motor fuel blending requirements. Industry sources estimate that Spain imported 720,000 tonnes of biofuel from Argentina in 2011, worth some 750 million euros. Argentina is the world's leading supplier of soyoil and soy-based biodiesel. More than 12 million tonnes of Argentine soybeans were used last year to make biodiesel, compared with total output of some 49 million tonnes in the 2010/11 season.

Sources: Helsingin Sanomat (with thanks again to my wife, Minna-Riitta for spotting this article), Reuters

Wednesday, April 18, 2012

Canadian government to streamline environmental approval process

The federal government of Canada will no longer undertake environmental assessments for smaller resource projects but will only do assessments for those of national significance. At this point it is unclear how that standard will be determined. The federal government will allow the provincial governments to review the resource projects when it deems that the specific province has the expertise and experience to assess such project. Where the federal government continues to do reviews, responsibility will fall to three central agencies; officials at Fisheries and Oceans or Transport Canada will not be able to intervene. Agencies will have to meet fixed time lines when reviewing major resource projects. The government will introduce new penalties for those who contravene federal environmental regulations, ranging up to $400,000.00 CAD.

Source: (in part) Globe and Mail

Monday, April 16, 2012

Saskatchewan fires back at David Suzuki Foundation report calling the province a "laggard" in climate change

A report released last week by the David Suzuki Foundation praised Saskatchewan for commitments to double wind energy capacity and for plans to improve residential energy efficiency. However, the report also made it clear that Saskatchewan has the highest greenhouse gas emissions per capita in the country. The report went on to note that in recent years, no plans have been made to close the coal-fired generation plants which provide Saskatchewan with nearly 60% of electricity. “It is difficult to imagine any jurisdiction taking the threats of climate change less seriously than Saskatchewan currently does,” the report said.

Saskatchewan's environment minister, Dustin Duncan recently fired back that he's disappointed that the David Suzuki Foundation released the report without talking to the province about what it's doing to cut greenhouse gas emissions.

"We are making significant investments in technology like carbon capture and sequestration which has been recognized as leading technology when it comes to reducing emissions, while still providing jobs for people that work in the coal and in the power industry" Minister Duncan noted. Coal-fired power plants are the primary source of energy in Saskatchewan and Minister Duncan said there's no plan to get rid of them.

"The Suzuki Foundation has taken a position, and it's fair enough for them to take it, but they seemingly have taken a position that we need to move away from the coal industry," said Duncan. "And that's a position that we just fundamentally disagree with as a government. It's important to the people that rely on that industry for their employment. We have significant coal reserves and we're pretty confident that we have a technology that can make coal a resource that we can use in the future in a cleaner way."

The position of the Saskatchewan government seems at odds with proposed Federal regulations would essentially prohibit the construction of new coal-based plants after 2015 unless they include carbon capture and storage equipment to dramatically reduce emissions. Even if Saskatchewan would negotiate an equivalency agreement with the Federal government, the province would still need to essentially comply with these regulations over the longer term SaskPower is currently testing carbon capture and storage technology but as yet it is still not widely adopted and utilized technology. Much is clearly riding on getting CCS working in Saskatchewan.

Sources: The Star Phoenix, The Canadian Press, Government of Saskatchewan Press Releases, David Suzuki Foundation

Wednesday, April 11, 2012

Can I transfer the contract for a renewable energy project to another third party?

There are many reasons why either the landowner or developer may want to transfer or assign their agreement providing for site control for their renewable energy project. For wind projects the agreement between the landowner and developer providing for site control is often an Option to Lease Agreement whereas for solar PV the agreement is often a Lease Agreement.

A properly drafted Option or Lease Agreement will contain an assignment provision outlining if and how the parties can assign the agreement to a third party. A portion of a typical developer-friendly assignment clause in a wind Lease Agreement is noted below:
The Lessor agrees that the Lessee may assign or sublet the whole or any part of this Lease or the Lands at the sole and absolute discretion of the Lessee to any third party provided that the assignment is for the purpose of the business of constructing and operating the Windpower Facility and any use ancillary thereto continuing to be carried on by the assignee or the sublet tenant on similar terms and conditions as are contained within the Lease herein and that accordingly, provided the use is as so set out herein, the assignment or sublet shall be without the leave, consent of, or notice to the Lessor. It is also understood that the Lessee herein may, without the leave, consent of, or notice to the Lessor, assign the within Lease to: 
  1. an affiliate or corporation to be incorporated by the Lessee to carry out the Project on the subject Lands;
  2. one or more of its lenders, mortgagees, beneficiaries of deeds of trust, or other holders of a beneficial interest in a Mortgage.

What if there is no assignment clause in my contract?

The situation becomes complicated where there is no assignment provision in the Option or Lease Agreement which prevents, allows or otherwise contemplates assignment of the contract. Generally speaking, where there is no express provision permitting assignment of a contract, and all parties have not consented to such assignment, the assignment of the contract is not possible where the transfer may be overly burdensome on one of the parties. Simply put, as G.H.L. Fridman noted in his book, The Law of Contract in Canada (Fourth Edition) in such situations “the assignment must not throw uncontemplated burdens on the debtor, to his prejudice.”

Assignment of a contract absent an express provision may be permitted in certain situations, but the rule permitting assignment is “confined to those cases where it can make no difference to the person on whom the obligation lies to which of two persons he is to discharge it.” This principle was stated in the case of Tolhurst v. Associated Portland Cement Manufacturers (1900) Ltd. (1902) 2 K.B. 660 (C.A.), affd (1903) A.C. 414 H.L.

Monday, April 9, 2012

Sky Harvest Windpower Corp. to target gas and power markets in Turkey and Europe

In February, 2012 Sky Harvest Windpower Corp. ("Sky Harvest") announced that it has formed a joint venture corporation under the name Levant Energy Inc. for the purposes of developing underground natural gas storage plants in the Republic of Turkey. Sky Harvest will initially hold a 65% interest in the joint venture by investing $500,000 CAD in the newly formed subsidiary. The investment is subject to certain conditions, including Sky Harvest’s completion of further equity or debt funding in order to finance the acquisition. The joint venture intends to use these proceeds to identify and commence securing proposed natural gas storage sites, as well as starting associated permitting processes. It is anticipated that Sky Harvest’s interest in Levant Energy Inc. will be diluted as additional funds are raised.

Turkey is experiencing rapid economic growth and is strategically positioned as a natural gas hub between Europe and the producing gas fields in the Northern Caspian and Middle East regions. As the 16th largest economy in the world, Turkey’s increasing domestic power consumption and its need to use traditional power generation sources to supplement its emerging wind power sector during times of peak power demand are increasing its need for natural gas. As well, Turkey must meet European Union natural gas directives that require pipelines supplying Europe to have access to a nominal 20% of volumes stored as natural gas to ensure security of supply. Currently, Turkey’s installed storage capacity is approximately 4% as there are only two adjacent, seasonal, natural gas storage sites operating in the country with one additional site to be developed. In contrast, there are over approximately 750 independent natural gas storage firms in Canada and the USA. Sky Harvest believes that Turkey’s needs represent a great opportunity for the Company through the development of natural gas storage facilities in the country.

Concurrently, Sky Harvest has entered into an agreement with Mr. Bertan Atalay of The Hague, Netherlands whereby he will act as President and CEO of Levant Energy Inc. Mr. Atalay has over 20 years of experience in project engineering, private and public company management, and gas and renewable energy development in both North America and Europe. He previously acted as Chief Operating Officer and a director of Finavera Renewables Inc., a Canadian wind energy and wave power technology developer. Mr. Atalay has also held business development and management positions with Northland Power Inc., Shell Wind Energy, and Enron Europe Limited. He holds engineering degrees from Middle East Technical University in Ankara, Turkey and the University of Toronto, as well as an MBA in Finance from the University of British Columbia. He was also an exchange scholar of the London Business School.

In addition to operating Levant Energy Inc., Mr. Atalay has also agreed to act as a consultant to Sky Harvest for the purpose of introducing the Company to additional acquisition opportunities in renewable energy and related sectors, including wind power development opportunities in North America, Turkey, and other regions of Europe. Sky Harvest will compensate Mr. Atalay based on the successful completion of such transactions with a success fee equal to 10% of the transaction’s value.

In connection with the joint venture formation, Sky Harvest’s President, William Iny, stated, “We are excited about the energy sector opportunities that exist in the Republic of Turkey and look forward to working with Mr. Bertan Atalay to generate more value for our stockholders. Mr. Atalay’s experience in the power industry, and his knowledge of Turkey’s energy infrastructure, make him a great asset to the joint venture. We believe that this project will complement our current portfolio of wind power properties and allow us to potentially become a diversified energy provider.”

The Company also intends to change its name from “Sky Harvest Windpower Corp.” to “Sky Harvest Energy Corp.” in order to better reflect the nature of its expanding business operations.

Sky Harvest has interests in utility scale wind power projects in South-West Saskatchewan totaling 350 MW. Sky Harvest has leaseholds and contractual interests in over 35,000 acres of land in Saskatchewan for the purpose of developing these clean energy projects. Sky Harvest will continue to hold long term lease agreements on key properties in the area that permit the company to erect wind power facilities for the purpose of generation and sale of wind power to the provincial grid in Saskatchewan.

Thursday, April 5, 2012

Hitachi to expand into renewable energy: Agreement inked with Fuji to acquire wind turbine generation business

Hitachi Ltd. ("Hitachi") and Fuji Heavy Industries, Ltd. ("Fuji") have reached an agreement on the assignment of Fuji’s wind turbine generator system business to Hitachi. The details are still being worked out but the agreement is planned to close on July 1, 2012.

Hitachi and Fuji co-developed a 2 MW downwind turbine in 2003. The prototype machine was installed in Hasaki, Kamisu City, Ibaraki Pref. Japan in December 2005, followed by the delivery of a total of 25 units of wind power generation systems at 6 sites throughout the country. The downwind type turbine is a wind turbine that is installed with its rotor under the lee of the tower. It can effectively catch wind to generate power on hills and at sea. Hitachi designed and manufactured the power generator and the power control component and has also sold and installed the wind power system. Fuji designed and manufactured the nacelle, blade, and tower.

After the assignment, Hitachi will consolidate the resources of the two companies to enhance the design and development capability, and integrate the manufacturing and distribution so that it can quickly respond to future market needs. Hitachi will combine its power control technologies as well as the system linkage and stabilization technologies with Fuji's downwind type turbine technologies, with the goal of expanding further into the renewable energy market.

Source: (in part) TES - Today's Energy Solutions

Wednesday, April 4, 2012

Hitachi centers Canadian operations in Saskatchewan: Calgary and Mississauga to be integrated in Saskatoon with additional $10 million CAD investment

Hitachi is integrating Hitachi Canada and Hitachi Canadian Industries and establishing Hitachi Power Systems Canada in order to strengthen the business structure of Hitachi's power systems business in Canada. Hitachi will invest $10 million CAD in the new company in Saskatoon over the next three years. The investment will be used for the purchase of equipment that will enable Hitachi to increase its technology and productivity for manufacturing products and providing services to the power, energy and industrial market sectors in Canada.

Hitachi's operations in Canada involve design, manufacturing, inspection, installation, trial operation, sales and preventive maintenance for power generation equipment and parts for thermal, hydroelectric, nuclear and other power generation. In Saskatchewan, Hitachi has been providing power generation equipment to SaskPower since 1970. Hitachi also does custom manufacturing for mining, oil and gas and other industrial applications.

The new President of Hitachi Power Systems Canada will based in Saskatoon, but there are no immediate plans to transfer jobs from other locations at the moment.

Sources: (in part) Star Phoenix and Hitachi Press Release

Monday, April 2, 2012

Wind farm appeals in Ontario - the Zephyr Farms case - a further case commentary

Great article entitled Rewind re Wind regarding the Zephyr Farms case in the recently released April 2012 issue of Miller Thomson LLP EnviroNotes! by Tamara Farber, a Partner in our Environmental and Litigation department in Toronto with particular expertise in wind.

There are two other wind appeals currently in process with the Tribunal in Ontario – one involving a wind farm in Wellington County (the proponent is Conestogo Wind LP) and one in Chatham Kent County (the proponent is Gesner Wind Farm LP, represented by Miller Thomson LLP).