Clean Energy Investing, Sustainable Architecture, Music Art Culture



Popular Posts

Search Alternative Energy Info; Green Power Investments Mutual Funds

Find ecologically sustainable green energy, clean power funds, alternative energy technology stocks, green investing news, manufacturers of photovoltaic solar electricity panels, renewable energy products, solar power investments, thin-film solar, green technology ETFs, wind turbine companies, geothermal stocks and much more!!!

Custom Search

Solar-Intelligence Blog; Conscious Living, Smart Investing

Best Green Stocks Investing Blog

Friday, October 20, 2006

Canadian Wind Energy consolidating amid takeovers

Caught in the winds of change

story from: http://www.theglobeandmail.com/servlet/story/LAC.20061020.RWIND20/TPStory/Business?pageRequested=all&print=true

Canada's highly fragmented windpower business is being swept up in a global consolidation, RICHARD BLACKWELL of Toronto's Globe and Mail writes

The consolidation of Canada's wind power business is under way.

With two takeover deals in the past 10 days, the industry is following the model taken by its more mature counterparts elsewhere in the world, where big, well-financed players predominate.

Just last week, Canadian Hydro Developers Inc. agreed to pay $6.3-million for Vector Wind Energy Inc., a small firm listed on the TSX Venture Exchange. And yesterday, Toronto wind farm developer Gale Force Energy Ltd. announced a takeover by an Irish-based multinational wind power firm, Airtricity Inc.

With big wind projects eating up considerable amounts of capital, and some provinces specifying that only well-financed companies will get electricity contracts, much of the industry is expected to end up in the hands of big energy firms and power utilities. Some wind assets may be held by income trusts that spin off to investors the steady cash flow that comes from generating power.

Print Edition - Section Front
Enlarge Image

More Business Stories
Google blows past its rivals
Ottawa's emissions stance gets thumbs-up
TV Guide zaps paper edition
Economic headwinds greater than feared: Dodge
A record day (again)
DIVIDENDS
Go to the Business section
Canada's wind energy business -- now fractured among players ranging from small entrepreneurs to energy giants -- is almost certain to evolve in a similar fashion to Europe and the U.S., where the wind sector has already consolidated dramatically, said Josh McGee, an analyst at Emerging Energy Research, a worldwide consulting firm based in Cambridge, Mass.

"Wind power globally has gone from being a kind of boutique, idealistic, source [of power] to a real competitor that requires scaling, a large in-house balance sheet, and in-house expertise on project management," he said.

In the U.S., large energy companies and financial players have snapped up most small wind power producers, and in Europe "there are only large transnational wind development companies left that are competing in the [large] markets," Mr. McGee said.

Currently, the Canadian industry is highly fragmented, with players that include private companies (such as SkyPower Corp.), publicly traded ventures (Canadian Hydro Developers), energy giants (Suncor Energy Inc.) and utilities (SaskPower).

Over the past few years, several dozen wind power projects have been built Canada, in all provinces except British Columbia. They range from huge wind farms with dozens of turbines to tiny single-turbine operations. Currently, Alberta has the biggest installed base with about 285 megawatts of wind on-stream, followed closely by Ontario and Quebec.

According to the Canadian Wind Energy Association, Canada passed the 1,000-MW mark in wind energy production in June, putting us among the top dozen producers worldwide. But we're nowhere near the world leaders -- Germany and Spain have more than 18,000 MW and 10,000 MW in production, respectively.

In Canada, wind fulfills only about half a per cent of our electricity demand, compared with Denmark, which generates almost 20 per cent of its electricity from wind.

Still, the Canadian industry is expanding rapidly, with several new projects soon to link to the power grids and dozens more in the planning stages. The burst of activity has been ignited by provincial governments, many of which have set wind energy targets, then used competitive tendering processes to choose suppliers.

Ottawa has also helped boost the industry through the Wind Power Production Incentive -- essentially a subsidy that pays wind power producers about 1 cent for each kilowatt-hour they produce. The WPPI is currently in limbo under the Conservative government, however, and the wind industry is holding its breath to see how it fares in the ongoing environmental policy revisions.

There has been a smattering of mergers in the Canadian wind businesses in past years. In 2002, Alberta power firm TransAlta Corp. bought Vision Quest Windelectric Inc., at the time the country's second-biggest wind energy producer. Then, in 2004, TransCanada Corp. bought 50 per cent of Cartier Wind Energy Inc., one of Quebec's major wind power firms, and in 2005 boosted its stake to 62 per cent.

But the demands for capital inherent in the wind energy business are likely to push many more firms together in the coming months and years.

"I think what you're going to see ultimately is fewer companies," said Stephen Probyn, chief executive officer of the Clean Power Income Fund, an investment trust that owns the recently opened 99-MW Erie Shores wind farm in Ontario. "The privately financed entrepreneurial companies will either evolve . . . so they have access to capital, or they'll get consolidated."

Foreign wind energy giants -- seeing the Canadian market in a fast-growing phase that mirrors where Europe was 10 years ago -- will likely be among those buying up smaller Canadian wind industry players or joining Canadian joint ventures. There have already been a few international forays into the Canadian market, before Airtricity's purchase of Gale Force:

Spanish wind giant Acciona is a partner with Suncor and Enbridge in several projects, including the soon-to-open 30-MW Chin Chute wind farm in Southern Alberta.

This summer German financier HSH Nordbank AG, a big investor in energy projects, bought a minority stake in private Toronto wind farm developer SkyPower Corp.

British-based Renewable Energy Generation Ltd. paid $29.1-million for AIM PowerGen Corp., an Ontario developer that has projects planned in six provinces.

North Dakota-based heavy steel fabricator DMI Industries has opened a wind-tower manufacturing plant in Fort Erie, Ont.

"Outside entities have begun to realize that Canada is going to be a very good market for wind power," Mr. Probyn said, particularly with government incentives making the economics of the business more favourable. " I think you'll see more foreign entrants into Canada."

While there will likely be fewer players fighting for the big wind farm contracts over the next few years, there will still be room for some very small players, said Robert Hornung, president of the Canadian Wind Energy Association.

"[The provinces have] a growing interest in developing small-scale wind energy projects of one or two turbines," he said. Nova Scotia, for example, has awarded about a dozen contracts for projects of 2 MW or less, and Ontario is going to launch a similar program for projects under 10 MW.

The idea, Mr. Hornung said, is to broaden participation by "encouraging municipalities, co-operatives, or groups of farmers to proceed with their own projects."

CANADA'S TOP WIND POWER PLAYERS

TransAlta Corp. The Alberta-based power generation firm has three wind farms in southern Alberta, operated through its VisionQuest subsidiary, that now generate almost 200 megawatts of power. It has proposed several new wind farms in Ontario.

SaskPower The provincial government-owned utility this year opened its 150-MW Centennial wind farm near Swift Current, the biggest operating wind facility in Canada. SaskPower also has another 11-MW wind plant in southeastern Saskatchewan.

Canadian Hydro Developers Inc. This TSX-listed firm, which also runs hydro and biomass plants, has three wind power operations in southwestern Alberta that generate almost 50 MW of electricity, and it recently opened the 68 MW Melancthon wind farm in Ontario. Several others are in development.

Axor Group Inc. The Montreal engineering firm built Canada's first large-scale wind farm, the 100-MW Le Nordais project in Quebec's Gaspésie region.

Clean Power Income Fund An investment trust that holds biomass and hydro power assets in Canada and the U.S., and owns the recently opened 99-MW Erie Shores wind farm in Ontario.

Nexen Inc. This Calgary-based energy firm is completing a 70.5-MW wind farm near Fort McLeod, Alta., with partner GW Power Corp.

Algonquin Power Income Fund This investment trust owns several power-generating facilities, and recently bought all the units of AirSource Power Income Fund, a Manitoba-based limited partnership with a 100-MW wind farm near St. Leon, Man.

Northland Power Income Fund An independent power producer that owns the 54-MW Mont Miller wind farm in the Gaspésie region of Quebec.

Brookfield Power The power generating and distribution arm of Brookfield Asset Management Inc. is completing a 189-MW wind farm near Sault Ste. Marie, Ont. About 99 MW have recently been connected to the Ontario power grid.

Creststreet Power and Income Fund This investment trust owns and operates a 54-MW Mount Copper wind project in Quebec and a 30-MW Pubnico Point wind farm in Nova Scotia.

Ventus Energy Inc. This Toronto company is developing projects in six provinces. It recently began construction of a wind farm in Prince Edward Island.

SkyPower Corp. A Toronto-based private company that has several wind and solar projects planned across the country. Its first will open soon near Rivière-du-Loup, Que.

Epcor Utilities Inc. The Edmonton-based natural gas, power and water company opened the 40-MW Kingsbridge Wind Power Project on the shores of Lake Huron in Ontario this spring. A second phase will add another 160 MW.

Enbridge Inc. The income trust arm of the Calgary energy company jointly owns, along with Suncor, wind farms in Alberta and Saskatchewan that generate about 40 MW of power. It also has plans for a 200-MW Ontario wind farm on the shore of Lake Huron, although the project has been delayed because of snags in the approval process.

TransCanada Corp. The Calgary-based energy infrastructure firm owns 62 per cent of Cartier Wind Energy Inc., which has been awarded six major projects by Hydro-Québec. The first, the 110-MW Baie des Sables project, is expected to be added to the power grid by the end of this year.

Suncor Energy Inc. The big oil sands player owns wind farms in Alberta and Saskatchewan that generate about 40 MW of power, with another 30-MW Alberta project starting up this month. A 76-MW project on the shores of Lake Huron in Ontario is in the works.

-- Richard Blackwell

Wind power generation, by province (megawatts)

PROVINCE INSTALLED PROPOSED
British Columbia 0 325
Alberta 285 235
Saskatchewan 171 25
Manitoba 104 0
Ontario 221 1,059
Quebec 212 1,244
New Brunswick 0 20
Nova Scotia 41 61
Prince Edward Island 14 39
Newfoundland 1 0
Yukon 1 0

SOURCE: CDN. WIND ENERGY ASSOCIATION

Canada's installed wind power capacity (megawatts)

2000 137
2001 198
2002 236
2003 322
2004 444
2005 683
2006* 1,049

*to June 30

SOURCE: CDN. WIND ENERGY ASSOCIATION



See also:

Solar Power Investing Blog

No comments:

Yuya Joe Blog

Lake Ontario Waterkeeper

The Daily Beast -Politics Blog

21stArch.com - 21st Century Architecture

Original Joe College Blog

WikiLeaks Foreign Policy Analysis

AGreenRealtor.com Real Estate Blog - Ecology Energy Efficiency

Best Green Stocks Investing Blog

JOIN Betfair through link below, you "Choose Your Bonus!"

PV Intell Photovoltaic Solar Stocks Investing

SEARCH Leading Alternative Energy and Ethical Investing websites

Custom Search

Daily Kos

Rare Earth Stocks Research

Patrick MacManus's Blog Peace and Collaborative Development

BeesTreesFrogsElephants.com - Nature and Ecology Blog

Research Green Energy stocks, Clean Energy investing information

Find wind power investing info online, clean energy mutual funds, geothermal stocks, solar energy investments.

Custom Search


Green Energy Investing Network:

Green Stocks Investing Clean Power Blog

SolarIntell.com Renewable Power Investing Website

Wind Intell.com Wind Energy Stocks Company Links

Geothermal Power Investing Public Companies

PV Intell.com Leading Photovoltaic Solar Energy Stocks