Feed-in-tariff for Southern Africa

Eskom, the largest electrical utility company in Southern Africa, is preparing to roll out the first Renewable Energy Feed-In-Tariff (REFIT) on the African continent. The REFIT will guarantee a set price for renewable energy and is a very important policy tool in securing investment in a large scale wind or solar farm.

The National Energy Regulator of South Africa (NERSA) held a public hearing in Pretoria yesterday, Tuesday March 30, 2010 to get feedback from all stakeholders in order to define the rules for the selection criteria for renewable energy projects under the REFIT program.

The province of Ontario introduced the first REFIT in North America last year and it has been an incredible success in driving forward the development of new renewable energy projects and creating new jobs and opportunities. I suspect all Southern African countries will also benefit tremendously from this new REFIT.

The small (but very developed) country of Namibia which borders on South Africa is particularly interesting because it has an excellent wind resource, is much less densely populated than South Africa but has a huge demand for new generation, mostly from new mining developments and also has a good transmission system in place operated by NamPower. NamPower currently purchases almost all power from Eskom.

At this point, Eskom has said that they will consider cross-border projects as part of the REFIT. The timing seems good to move forward with a large wind or solar project involving a joint venture between a local renewable energy developer with a site locked up in Namibia and local connections, a large wind or solar developer with access to global capital and expertise and Eskom and NamPower. There may also be scope to involve some of the large mining companies operating in Namibia. Once the REFIT is in place, it will ensure certainty in pricing for all parties involved in such a joint venture project and I look forward to seeing who is going to be the first to capitalize on this opportunity.

Consultation session on climate change legislation in Saskatchewan

I attended the government consultations on Bill No. 126 - An Act respecting the Management and Reduction of Greenhouse Gases and Adaptation to Climate Change in Saskatoon today. The event was very well organized and MNP and the Ministry of Environment made the event worthwhile. The participants in the session were very knowledgeable, with a large experienced contingent from Alberta, which made the session all the more insightful. Predictably the price per tonne of carbon offsets was topical. Figures between $15 and $150 per tonne were raised. The concensus seemed to be somewhere around $30 per tonne. I found the information regarding the inclusion of Performance Agreements in the climate change legislation particularly useful and look forward to hearing more about Performance Agreements in the proposed climate change regulations in the future.

Hydro-Quebec and NB Power scrap power deal

Hydro-Quebec was negotiating with NB Power to acquire 10 generation facilities in New Brunswick and 670 megawatts of transmission rights to New England for $3.2 billion. The deal seems to be scuttled for the moment due largely to opposition in New Brunswick.

BC Hydro awards PPAs for 19 renewable energy projects

The B.C. government has the goal of becoming energy self-sufficient using renewable energy by 2016. The 5 wind and 14 run-of-river projects awarded PPAs will generate 2400 gigawatt hours of electricity per year.

BC Hydro says another 28 projects remain in its Clean Power Call and the utility expects to select more later this month.

In total, BC Hydro initially received 68 proposals from 43 bidders representing more than 17,000 gigawatt hours per year of electricity.

The winners in this phase include Finavera Renewables Inc., CP Renewable Energy Limited Partnership (formerly EPCOR), Cloudworks Energy Inc., Creek Power Inc., Plutonic Power Corp., Selkirk Power Co., Swift Power Corp., NI Hydro Holding Corp., C-Free Power Corp. and Kwagis Power Limited Partnership.

Red Lily wind farm receives municipal approval

Algonquin Power Inc. and Gaia Power received municipal approval yesterday to construct a 25 MW wind farm in southeast Saskatchewan.

I've heard this project had some challenges in the initial stages but hopefully all the kinks are worked out now and construction can begin this summer as planned.

It seems the Rural Municipality of Martin will be adopting the Ontario standard and requiring 550 meter setbacks from the WTGs - Germany only requires 300 meters.

More details regarding Saskatchewan and Manitoba interconnection transmission upgrade

The Winnipeg Free Press just revealed a few more details from Manitoba Hydro regarding the proposed interconnection upgrade between the two provinces.

Most of you will already know that the two provinces plan to more than double their ability to transmit power to one another - both committing to add at least 150 megawatts of transmission capacity. Given our East-West interconnections are very weak in Canada, this is welcome news.

The Winnipeg Free Press also noted that:

"Rosann Wowchuk, minister responsible for Manitoba Hydro, signed an agreement with Saskatchewan Energy Minister Bill Boyd that will see the provinces work more closely on renewable energy development."

I have not been able to glean details of the agreement regarding renewable energy development, but I am hopeful it includes a long-term goal of connecting Manitoba's large hydro generation with Saskatchewan's huge wind generation potential.

As HydroQuebec has proven, wind and hydro are the perfect match to solve intermittency issues - when the wind is blowing, hold the water and when the wind dies down, ramp up hydro.

With Saskatchewan's wind resource and site availability far superior to that in Quebec and the potential for another 8785 MW of hydro generation in Manitoba, do SaskPower and Manitoba Hydro have long term plans of working together to oust HydroQuebec as the top seller of clean energy to the USA?

Others calling for a Feed in Tariff in Saskatchewan

Here is an interesting blog post also calling for a FIT in Saskatchewan:

http://www.visionofearth.org/?p=129

It also highlights the huge differences in the Ontario FIT rates and the current rates offered by SaskPower in Saskatchewan.

Difference in solar tariff between Saskatchewan & Ontario

I published an article in SaskBusiness magzine in the March 2010 issue (http://www.sunrisepublish.com/common/pdfs/publications/SaskBusiness_Magazine/SB_March2010_web.pdf) on the SaskPower Green Options Partners Program. As I mentioned in my article, this program is certainly a step in the right direction toward a feed in tariff for renewables.

However, it was quite disappointing to confirm the difference between purchase rates in Ontario and Saskatchewan. Ontario will pay 80.2 cents/KwH for solar PV generation and Saskatchewan is only offering to pay 9.6 cents/KwH - a substantial difference. The average price in the EU is around 75 cents/KwH for solar PV.

That is not to say that solar projects in Saskatchewan are not feasible - just that there is much more incentive to develop in Ontario instead of in Saskatchewan (where the solar resource is actually far superior).

That being said, I understand the SaskPower Green Options Partners Progam is just the first step in the right direction. Hopefully SaskPower is looking to follow Ontario's lead and move toward a feed in tariff based directly on the cost of generation. Those developers who graduate from the Green Options Partners Program will certainly be much better positioned to take advantage of the feed in tariff, should it come to fruition.

Deadline for submissions

As I am sure any party preparing a submission is aware, the closing date for submissions for SaskPower's Request for Qualifications (RFQ) to procure up to 175 megawatts (MW) of wind power is March 12, 2010 at 3:00pm (Central time zone).

Qualified proponents will be invited to respond to a formal Request for Proposals (RFP) in spring 2010.

Canadian Budget 2010

The Federal budget promised to "further improve the regulatory review process for large energy projects" to ensure procedures were timely and predictable.

Responsibility for carrying out environmental assessments will move from the Canadian Environmental Assessment Agency (CEEA) to the National Energy Board and the Canadian Nuclear Safety Commission, which has more expertise in energy projects.

The Federal budget also promised $100 million over the next four years to support the development of advanced clean energy technologies in the forestry sector. Look for new biomass projects to be developed in the next four years.

Carbon Footprint Symposium and carbon credit trading

I attended the Carbon Footprint Symposium in Saskatoon yesterday and it was certainly a well-organized and useful event.

Dean Stinson O’Gorman from Environment Canada had a particularly interesting presentation on offset trading in Canada.

There were also numerous Saskatchewan farms in attendance interested in carbon credits generated from no-till agricultural practices on their land - which is a hot topic at the moment in the province with new legislation on GHG reduction similar to that in Alberta set to receive legislative assent in spring or summer 2010.