Wednesday, May 30, 2012

Klahoose First Nation and Alterra Power Sign Agreement for Upper Toba Run-of-River Hydro Project

Alterra Power Corp. and the Klahoose First Nation are pleased to announce that they have signed a Resource Development Agreement ("RDA"), establishing the framework under which Alterra and the Klahoose will work together to advance the Upper Toba run-of-river hydroelectric project, which lies within the traditional territory of the Klahoose First Nation.

The comprehensive RDA sets out the terms under which the construction of the facilities can proceed and the project can be brought into commercial operation.

Klahoose Chief James Delorme said, "This agreement between the Klahoose First Nation and Alterra Power builds upon our Toba Montrose agreement and represents another significant milestone for our Nation. The Klahoose First Nation supports quality green energy development in our traditional territories, achieved with a partner that is respectful of our land, our culture and our people. We value the work our past leaders have done for us to get us to this place. It has helped us to make a difference building this new profound agreement."

Donald McInnes, Alterra's Executive Vice Chairman, said, "We value our relationship with the Klahoose First Nation and are very grateful for their support of run-of-river hydro projects in their traditional territory. We look forward to working together again in the Toba Valley to develop and operate these environmentally-responsible projects that will benefit the Klahoose First Nation and all British Columbians."

The Upper Toba run-of-river hydro power project is an expansion of Alterra's operations in the Toba Valley, where the 235 MW Toba Montrose run-of-river hydro facility is located. The project will comprise two new run-of-river hydro power plants, at Jimmie Creek and the Upper Toba River, with a combined capacity of up to 124 MW, subject to final design. The new facilities will utilize much of the infrastructure already in place for Toba Montrose. The project has a 40-year power purchase agreement in place with BC Hydro, has received its Environmental Assessment Certificate and has signed an interconnection agreement with BC Hydro.

Upper Toba is located on the traditional lands of the Klahoose First Nation and the project will use the existing Toba Montrose power line, which travels through the traditional territory of Alterra's partners, the Sliammon and Sechelt First Nations.

Source: Alterra Press Release, May 23, 2012

Tuesday, May 29, 2012

Artificially cheap hydro power, your equalization dollars at work

Most Canadians may find it surprising that equalization encourages Quebec and Manitoba to waste renewable energy — so let’s walk through the logic.

When provinces develop new revenue capacity, equalization receipts generally go down, because the jurisdiction is deemed to have become less needy under the applicable formulae. Newfoundland and Saskatchewan, for instance, once were deemed have-not provinces until booming oil revenues pushed them into the have category. Rising resource revenues were clawed back from equalization payments until no more payments were forthcoming.

But a quirk in the equalization formula excludes the true value of hydro electric energy produced by Manitoba and Quebec, which sell their hydropower in local markets for below-market prices without penalty. An analogy would be Saskatchewan selling its oil, with a market value of about $95 a barrel, in its local market for $50. The formula is correct to deduct the market price of oil ($95) rather than the artificially low price ($50 in this example) from any equalization payments. The same logic should apply to Quebec and Manitoba’s hydro revenues under the equalization rules — but doesn’t. By creating a massive financial incentive for Quebec and Manitoba to subsidize hydro power heavily, the current arrangements generate market inefficiencies and encourage resource waste.

Between 2005 and 2010, Quebec received $42.4-billion in equalization. Lost revenues resulting from excessively low electricity pricing during that period was $28.6-billion (calculations are available at Since the equalization formula deducts 50% as a clawback from additional resource proceeds, an extra $14.3-billion (half of $28.6-billion) should have been deducted from Quebec’s equalization if its hydro revenues were treated the same as Alberta’s oil revenues under the rules. That would yield total equalization payments of $28.1-billion instead of $42.4-billion for the 2005-2010 period.

In other words, the federal government paid 34% more equalization to Quebec than it should have under more equitable rules. Alberta and Ontario taxpayers are effectively paying Quebec (and Manitoba) to consume artificially inexpensive power. (While Ontario now receives equalization payments, it remains a major contributor to the system.)

Read the full article here:
Source: National Post, Peter Holle, Frontier Centre for Public Policy

Friday, May 11, 2012

Algonquin Power & Utilities Corp. announces $105 million USD investment by Emera

Algonquin Power & Utilities Corp. ("APUC") announced yesterday that it is finalizing arrangements with Emera Inc. ("Emera") for a treasury subscription of subscription receipts convertible into 17.43 million APUC common shares ("Shares") for total proceeds of approximately $105 million USD. The subscription receipts will be issued in two tranches with delivery of the Shares conditional on and planned to occur simultaneously with the closing of certain previously announced transactions.

One tranche of subscription receipts will be used to partially fund the previously announced acquisition by APUC's power generation subsidiary of a 51% interest in a 480 MW U.S. wind power portfolio. These subscription receipts will be convertible into 10.456 million Shares at a purchase price of $5.74 USD for proceeds of $60.0 million USD, conditional on the closing of the acquisition.

The other tranche of subscription receipts will be used to partially fund the previously announced acquisition by APUC's regulated utility subsidiary of certain gas distribution assets in the mid-west U.S. These subscription receipts will be convertible into 6.977 million Shares at a purchase price of $6.45 USD for proceeds of $45.0 million USD, conditional on the closing of the acquisition.

APUC and Emera have also agreed to promptly convert the 12 million subscription receipts that were issued to Emera in December, 2010. APUC will receive $60 million USD in proceeds from the conversion and will use the proceeds to partially fund the acquisition of electricity and natural gas distribution utilities in New Hampshire that are expected to close in Q2 2012.

"We believe the subscription receipts are a very efficient way for APUC to raise capital to fund our previously announced acquisitions", commented APUC Chief Executive Officer, Ian Robertson. "The issuance of these additional subscription receipts further strengthens our relationship with Emera as we look to complete our growth initiatives for 2012".

"We are pleased to continue to grow our relationship with Algonquin through these additional investments", commented Emera Chief Executive Officer Chris Huskilson. "Algonquin's proven strategy of investing in renewable energy and regulated utilities continues to contribute to Emera's holdings in renewable energy in North America".

Source: Algonquin Press Release, Emera Press Release

Thursday, May 10, 2012

Japanese government takeover of Tepco means Japan owns 5% of Cameco's Cigar Lake uranium mine in Saskatchewan

A $12.5 billion USD purchase by the Japanese government of shares in Tepco, announced last week, means that the Japanese government will own more than 50% of Tepco's voting shares.

Tepco holds a 5% interest in Saskatoon-based Cameco's Cigar Lake mine in Northern Saskatchewan

The 5% ownership is well within the limits for non-residents owners of Canadian uranium mines.

Monday, May 7, 2012

Aecon wins contract with Northland Power to build 6 Ontario solar PV projects

Aecon's wholly-owned subsidiary, Miwel Construction Limited, has been awarded a contract to construct six 10 MW solar photovoltaic (PV) generation projects in Ontario.

Each of the six projects will be constructed on approximately 85 acres of land, and will consist of over 40,000 PV solar modules mounted on fixed structural supports. The solar modules will generate direct current electricity from the sun's energy, which will then be converted into alternating current, and subsequently transformed and injected into the Hydro One distribution system. The projects will sell the electricity under Ontario's renewable energy Feed-in-Tariff (FIT) program, and will use Ontario-made equipment and local Ontario labour.

The projects are located near Smiths Falls and Belleville in Eastern Ontario, and Burk's Falls near Huntsville. Work on the sites has begun, with completion of all six sites expected in 2013.

"Renewable energy sources like solar are essential to ensure a strong, sustainable energy grid," said John Brace, President and CEO of Northland Power. "With a long history of generating clean and green, intelligent energy, Northland's contract with Aecon will further our mission to provide renewable energy to power Ontario homes and businesses."

Northland has received more than 130 MW of FIT contracts for solar projects that will be constructed from 2012 to 2014. With experience in both rooftop and ground mounted solar projects, Aecon has previously constructed Peterborough Utilities' 10 MW Lily Lake Solar Park, and rooftop systems on IKEA, Home Depot and Canadian Tire stores.

"Aecon has a long-standing commitment to being a leader in the construction of innovative, renewable and sustainable energy solutions," said Teri McKibbon, Aecon's Chief Operating Officer. "We are pleased to be working with Northland Power, and are confident this contract will showcase our abilities in delivering customized solutions for solar projects."

Northland Power develops, owns and operates clean and green power generation projects. Its operating assets are primarily in the provinces of Ontario, Quebec and Saskatchewan. The company has been in business since 1987 and has a net economic interest in 1,005 MW of power generating capacity.

Aecon Group Inc. is a Canadian leader in construction and infrastructure development providing integrated turnkey services to private and public sector clients.

Sources: Aecon and Northland Press Releases

Thursday, May 3, 2012

Japan announces proposed rates for feed-in-tariff for renewable energy

Japan will require power utilities to pay above market rates for electricity generated from renewable energy sources such as solar and wind, based on recommendations recently announced by a government panel.

The feed-in tariff (FIT) for solar power was recommended at 42 yen (52 U.S. cents) a kilowatt-hour for 20 years, compared with the current rate of 13.65 yen a kilowatt-hour for industry and commercial users, according to the Ministry of Economy, Trade and Industry.

The wind FIT in Japan was recommended at 23.10 yen a kilowatt hour for plants with the capacity of 20 kilowatts or more and 57.75 yen for smaller ones, both for 20 years.

For geothermal, the panel recommended 27.30 yen a kilowatt hour for plants with the capacity of 15,000 kilowatts or more and 42 yen for smaller plants, both for 15 years. Japan currently gets about 9 percent of its electricity from renewable energy.

Pending approval by the Ministry of Economy, Trade and Industry, the feed-in tariffs will be introduced in July 2012 to spur investment in solar, wind geothermal, biomass and hydroelectric power generation as Japan plans a shift away from atomic power after the Fukushima disaster. In August, Japan’s parliament approved legislation for the feed-in tariffs to help diversify its energy mix following the devastating accident at the Fukushima Dai-Ichi nuclear plant in March 2011. Atomic power provided about 30 percent of the country’s electricity before the Fukushima crisis.

The price recommendation for solar is in line with that earlier proposed by the Japan Photovoltaic Energy Association. The Japan Wind Power Association had suggested a wind tariff of up to 25 yen over 20 years for bigger producers. The Japan Geothermal Developers’ Council had recommended 25.8 yen a kilowatt-hour for 15 years for bigger suppliers.

Source: Chisaki Watanabe, Bloomberg

Wednesday, May 2, 2012

Finnish Fortum establishes operations in France to develop renewable energy projects

Fortum has opened an office in Paris in order to boost its presence in France where the company may work on renewable energy projects, French business daily La Tribune reported this week.

Currently, the Finnish company operates in the segments of hydropower, co-generation and nuclear energy. Regarding France, the group is interested in the possibilities for winning hydropower concessions, to be offered soon by the French government. Another interesting opportunity on the French market is the marine tidal energy sector. Fortum has already embarked on a partnership with French shipyard DCNS to operate in that sector. The Nordic group is also looking for business opportunities in the solar power sector.

Fortum is a leader in the production of energy and heating in the Nordic region. Throughout the years, the Finnish group managed to boost its performance via the deregulation of different markets. Thus, the company was able to establish presence throughout Scandinavia, and later on turned its attention to the Baltic republics and Russia.

Fortum employs 10,700 people and closed 2011 with a revenue of 6.2 billion EUR.

Sources: La Tribune, Fortum Press Release

Tuesday, May 1, 2012

Saskatchewan committed to proceeding with $1.2 billion CAD carbon capture and storage (CCS) project while Alberta moves away from CCS

Despite the decision in Alberta to step away from a carbon capture and storage project, officials in Saskatchewan say they remain committed to the $1.2 billion CAD project at SaskPower’s Boundary Dam power station near Estevan, which has received $240 million CAD in funding from the federal government.

SaskPower is aiming to demonstrate that carbon dioxide from a coal-fired generating station can be captured post-combustion and safely stored or used for enhanced oil recovery projects in the oilpatch.

Illustration by Karen Petkau for the Calgary Herald based on files and information from the Alberta Geological Survey
Rob Norris, the government minister responsible for SaskPower, said the technology being used for the Saskatchewan project is different than what was being pursued in the now-stalled Alberta project, which involved using chilled ammonia to strip carbon dioxide out of emissions from TransAlta Corp.’s new Keephills 3 coal-fired generation station. TransAlta estimated the technology would eliminate one million tonnes of greenhouse gas a year.

The gas then would have been used to enhance oil production by injecting it into mature wells, as well as stored in deep saline aquifers.

Alberta ceding ground on the carbon capture front may create additional opportunities for Saskatchewan, Norris said.

“In a sense, we’re more confident today than the first day that we announced because we have partners coming on side. We see the support that we’re receiving internationally,” Norris said. “I think the eyes of the world are focused on the success that Saskatchewan is having on clean coal and carbon sequestration, building on a decade of our work.”

SaskPower president and CEO Robert Watson said the Boundary Dam project is on track to come in on budget, and should be in full production by spring 2014.

Watson said he expects Saskatchewan — which has also partnered with Hitachi on a carbon capture test facility in southeastern Saskatchewan — to be at a point in a few years where it can charge interested parties around the world for the expertise that has been developed. Watson said he also anticipates a solid market for the CO2 that is captured.

“There is nothing that has actually come off our original business plan. Our original business plan was put in place to make sure the project came in as good as you would build a gas plant because not only is the technology important but the economics are important. If we come in remotely as close as building a gas plant then we’re golden because we’re sitting on a 300 year supply of (coal).”

Sources (in part): National Post, Calgary Herald, Government of Saskatchewan Press Release