The wind turbine industry is reeling after Ottawa stopped funding wind farms, leaving Yukon enthusiasts little room to grow.
“The federal budget that came down in late January was not kind to us,” said John Maissan, the head of Leading Edge Projects Incorporated.
Windmill builders have been benefitting from government subsidies for more than a decade, said Maissan, but the federal government didn’t renew the commitment in its January 27 budget.
Ottawa was only looking for short-term, shovel-ready projects in its economic stimulus budget, and wind turbine developers usually need long-term incentives to finance their plans, said Maissan.
“The reality is that wind programs take typically two years, and sometimes a little bit more, to plan and design, procure equipment and then install,” said Maissan, whose company provides advice on renewable energy.
And it takes even longer in Northern Canada.
“Typically in the North, the construction window is pretty limited to do anything out in the communities – you’re basically looking at the summer,” he said. “And if you look at the Northwest Territories and Nunavut, you have the added complication of only having one barge service a year on which you can bring your equipment.”
“Wind energy in the North doesn’t suit itself to instantaneous installation,” he said. “It just can’t work that way.”
When the Conservative government was drafting the budget, it decided not to renew a program that provided one cent for every kilowatt hour produced by a windmill for 10 years.
The Ecoenergy for Renewable Energy program began in January 2007, and was preceded by a similar Liberal program from the Chretien years. The $1.48-billion fund that provides the financial incentive will be depleted ahead of schedule, according to the Canadian Wind Energy Association.
The money has helped make wind turbines cost-effective, said Maissan, but the politics of a strong one-time stimulus budget trumped the wisdom of stable long-term planning.
“If there was a project that was prepared, designed, and you could just push the bottom to go this year, then I think you would be eligible (for incentive funding),” said Maissan
“Sometime this summer is the expected date that (Ecoenergy) is going to run out of funds, and the government allocated no new monies for this program,” said Maissan.
“So essentially, this program dies when the money runs out.”
Maissan voiced his concerns at a budget consultation forum attended by federal Treasury Minister Vic Toews in early January. Toews asked his executive assistant to look at the documents on wind-energy policy that Maissan was carrying.
But Maissan never heard back from Toews.
The documents included a plan to make wind turbines cheaper in the North. It would add a few extra cents per kilowatt hour for windmills built in Northern Canada.
“The one cent a kilowatt hour that (Ecoenergy) provides is between 10 and 15 per cent of the revenues that a wind farm would expect,” said Maissan.
“A wind farm would expect eight to nine cents a kilowatt hour in revenue for the wind energy they produced and they would get one cent from the support program,” he said.
“In the North, the (capital) cost has typically been twice as high as elsewhere in Canada and operating costs are higher as well,” said Maissan. “So the overall costs of producing wind energy is typically two to three times higher.”
The solution was the proposed Remote Community Wind Incentive Program.
“We were looking for an incentive, for these kinds of areas, of three times what was given in the South, about three cents a kilowatt an hour,” said Maissan.
“If you talk about communities that get barge service once a year, that have serious permafrost issues and they can only use small wind turbines, the capital and operating cost total results in an area of 10 times and sometimes as high as 15 times what it costs in Southern Canada,” he said. The Canadian Wind Energy Association was pushing for a northern-specific wind program.
“We were looking for an incentive of 10 or 15 cents a kilowatt hour,” said Maissan.
The industry was “optimistic” that northern funding might come through, and the notion that the nationwide funding would disappear wasn’t even conceivable.
“The reaction was absolute flabbergast when they realized (the funding) wasn’t there,” said Maissan.
“The argument is that this government is looking for short-term incentives,” he said. “And a program that provides incentives over 10 years – and wind projects take two years to build and come into production – well, that isn’t the short-term stimulus they’re looking for.”
In the larger context of battling climate change, the Conservatives have put their faith in technology instead of a cap-and-trade market.
But they’ve left wind energy off the plate.
“The Americans have, as part of their economic recovery program, solidified support for renewable energy technology,” said Maissan. “So we’re doing the opposite of what the US is doing.”
According to Maissan, both Destruction Bay and Old Crow have potential for wind energy.
“Both of them are diesel-served,” he said. “A wind project could be put in cost-effectively, and you might in the long term reduce the cost of energy in these communities.”
“They are the two communities with the best wind resources,” said Maissan. “In the other communities I’m aware of, there just isn’t enough wind to do generation. Even in Destruction Bay it’s marginal, but with a large enough project you might get it to be the same cost as diesel.”
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