Could N.B. offer wind energy bonds?
FREDERICTON — New Brunswickers who would like to see more wind turbines set up across the province could soon have the chance to put their money where their mouths are.
Indeed, New Brunswickers who turned out to consultations on the subject of the development of community wind farms last spring expressed plenty of interest in investing directly into community wind farm projects, according to Yves Gagnon, the K.C. Irving chair in Sustainable Development at l’Université de Moncton.
Gagnon said direct investment could be achieved through government guaranteed bonds that would help provide capital investments for a guaranteed return, or through models similar to Community Economic Development Investment Funds.
Gagnon says the crowds that showed up at consultations across the province offered a strong indication that New Brunswickers are enticed by the financial and environmental windfalls such investments funds could provide.
“We heard a lot of comments about ways that would allow the maximum number of New Brunswick people to participate in the investment in community wind farms,” said Gagnon, who included several possible investment models in the draft report he has presented to Energy Minister Jack Keir.
“There are different models of how this is managed but, fundamentally, it is local residents investing in this fund to be reinvested locally, and around the province.”
Gagnon said community investment models could be opened up to include more than incorporated community groups or municipalities. He says they offer an opportunity for residents across the province to encourage more renewable energy sources even if a wind farm isn’t located in their community.
“If we can find the right program, we will attract quite a lot of money in my opinion.”
Gagnon said the investment models could resemble popular regionally-based retail venture capital funds such as Growth Works.
He says investors are looking for local ventures that can shed light on how their money is actually being invested.
“Right now people who have a little bit of disposable income, we buy mutual funds, and the money goes to Ontario and a year later we get the status of our investment and we discover we have lost money and we don’t know where our money went.”
The capital funds are much needed for community wind projects which, by definition, require local investment and ownership.
Community wind farms usually don’t exceed 15 megawatts, which can require five to 10 turbines and up to $30 million in upfront capital investment.
Prince Edward Island has had success in marketing green energy bonds. The government there raised over $5 million by offering bonds of a minimum investment of $500 that earned investors a guaranteed 5 per cent annual return for five years.
The fund, which has been capped at $20 million, actually helped the P.E.I. government compensate itself for the initial capital investments it made in a 10-turbine wind farm in the eastern end of the province.
But Gagnon says government doesn’t have to play such a direct role in raising funds. Instead, corporations can be set up in order to manage funds.
Gagnon said the consultations were well attended, with an average of 35 showing up at each meeting.
He said there was lots of interest in establishing wind farms to help extend the province’s energy hub beyond the Saint John area.
“The entrepreneurial spirit is alive and well in New Brunswick. People well understand both the business concept and the technical challenges of building community wind farms,” he said.
“But people are willing to do it, It was overwhelming support for the concept of community wind energy in New Brunswick.”
Gagnon said only a handful of people expressed traditional concerns over the effects of wind farms on the landscape and noise pollution.
However, he said the low number of concerns will probably rise when community wind farm projects begin to take shape and the location of projects become known.
Gagnon says proximity to wind farms is usually the aggravating factor for residents who challenge projects.
“Where we see opposition is when you start speaking about locations to installing a wind farm. The opposition comes from issues of proximity. Because we weren’t talking about locations, we didn’t get much opposition.”
However, the relatively smaller size of community wind farm projects, and the involvement of local investors and local economic spinoffs usually make such projects easier to accept than larger, corporately owned projects that can be more imposing on the landscape.
“We might see some opposition in some regions but, because it’s a community initiative, and because you maximize the local economic benefits, there is a tendency to increase the social acceptability of community-based wind farms,” he said.
Gagnon is still working on a report on consultations with First Nations communities.
“A dialogue has been engaged and is still ongoing with First Nation communities to see their interest in developing community-based wind farms owned by the aboriginal people of New Brunswick,” said Gagnon.
While Gagnon says First Nations communities face the same technical challenges as other communities in New Brunswick, he says they have unique ownership options that can be facilitated through existing funding programs offered by several levels and agencies of government.
By Jesse Robichaud
Times & Transcript Staff
2 September 2008
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