Cap on generation ‘stalls the business’ —
As much as $6 billion in Alberta wind power proposals are in limbo and could be lost as a result of an arbitrary cap on wind power projects imposed this year, an electricity conference was told Tuesday.
Also, lack of progress in developing a longer-term regime for wind power integration and the transmission lines to carry it is becoming a serious issue, delegates heard.
“It basically has stalled the business of wind in Alberta,” Claude Mindorff, president of West WindEau Inc., told a Canadian Energy Research Institute’s conference on electricity. West WindEau has plans for a $400-million windfarm near Medicine Hat, but it and others have been stymied by a cap Mindorff said “came out of nowhere.”
In May, citing a potential for reliability problems for the provincial network, the Alberta Electric System Operator (AESO) – which oversees the electricity market and transmission network in Alberta – surprised the industry by announcing that wind power generation in Alberta, currently at about 300 megawatts (MW) of capacity, would be capped indefinitely at 900 MW. However, there are proposals for about 3,000 MW of projects above and beyond the ones already lined up and paid up to meet the 900 MW mark.
“This is costing developers a lot of money to sit back and wait. There is over $6 billion stuck in a nice red box,” said Mindorff.
John Kehler, who oversees wind power for the Alberta Electric System Operator, told the conference held in Calgary that the issues are difficult to resolve. Among the challenges are the variability of wind power, which the AESO believes will have an impact on system reliability above a certain threshold.
“Windpower is a very complex issue,” said Kehler, the AESO’s senior technical specialist. “I’ve been around for 30 years and it’s one of the more challenging issues I’ve seen. We need to move at the right pace (and) we need to integrate wind power in a fair, balanced and reliable manner.”
However, wind power industry players say the AESO is moving too slowly and is understaffed; they argue the solutions to integration issues are both already known and affordable, and they believe billions of dollars in potential generation projects are in danger.
“There is some frustration with the go-slow type of approach,” said Kevin Van Koughnett, an executive of TransAlta Corp. unit VisionQuest WindElectric who spoke on behalf of the Canadian Wind Energy Association. He noted Alberta is the only jurisdiction in Canada that has imposed a cap on wind power, and that in the next few months Alberta will lose its title as Canada’s leader in wind energy as its pioneering sector is eclipsed by development in Ontario and Quebec.
“If you look at the amount out there potentially in this province, there’s probably $5 billion or more of wind farm development that now is stalled or precluded. We, from an industry point of view, have never understood why you impose a cap, putting up a stop sign, stalling out the industry,” said Van Koughnett.
Mindorff said the situation is absurd.
“Some people call it a threshold, some people call it a cap, some people call it a moratorium, and effectively if you’re not in the 900-megawatt queue . . . you’re out of luck,” he said.
“You can’t connect no matter how good your wind resources are, no matter whether or not you have a contract to sell energy.
“In this deregulated market, you’re not allowed to connect – and that bothers some of us immensely,” he added.
Mindorff also emphasized that even a large number of the projects that are within the 900 MW limit can’t get on line because of inadequate transmission infrastructure, particularly in the southeast. The AESO has $1 billion in transmission projects planned or underway across Alberta, but that will essentially only stabilize the existing system without allowing significant new generation.
“Of those that have actually paid their money under the 900 megawatt queue, 375 megawatts are stranded, waiting for some type of transmission upgrade to allow them to connect,” said Mindorff. “So, even though you’re allowed to connect under the current threshold, they can’t connect.”
Kellan Fluckiger, executive director of the electricity division at the Alberta Department of Energy, said he has faith in the AESO and believes solutions will be found before the 900 MW cap is even reached, which could happen as early as late 2007.
“I don’t think anyone at the AESO is trying to say, ‘Stop wind,’ ” Fluckiger told the Herald.
“We certainly are not interested in damping the signal for alternative and renewable investment at all. But, at the same time, we have to deal with the fact that each technology brings its challenges. One of the challenges is how do you integrate the variability – and you have to solve it to keep your electric system stable.”
Wednesday, October 18, 2006
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