The next round of wind-generated electricity for Quebec will cost significantly more than that now flowing into Hydro-Québec’s network, according to industry insiders gathered here for an international conference.
The utility will see its wind-power costs jump from an average 8.35 cents per kilowatt hour to at least 10 or 11 cents per kWh, said several executives close to companies who have submitted bids to provide Quebec with 2,000 megawatts of wind power beginning in 2010.
Requesting anonymity because of their desire to sell power to Hydro, the industry executives said one reason for the cost increase is Quebec’s decision to link wind power with regional development through “local content” requirements.
“It’s a hard criteria to meet because it requires (wind turbine) companies to have a manufacturing plant in Quebec,” said Sean Whittaker, of the Canadian Wind Energy Association whose 23rd annual conference attracted about 1,500 participants from North American and Europe.
“But the wind industry recognizes why Quebec has pursued wind in the first place, and that economic development is a big priority for the government,” said Whittaker, who along with other conference delegates heard Quebec’s natural resources minister proclaim that Quebec intends to become a world leader in wind power expertise and wind turbine manufacturing.
Whittaker, whose association represents most of the companies that have proffered 66 different wind farm proposals for Hydro’s consideration, would not say what the average cost of the power covered by those bids is.
“That is the $4-billion-plus question,” he said, referring to the investments in Quebec that the successful bids are expected to generate. “What I can tell you, is that it will be a very competitive price in terms of new (power) generation.”
In Ontario, through a standard-offer contract for small wind projects of 10 megawatts or less, wind-generated electricity costs 11 cents per kWh, he said.
“We know that big projects tend to be cheaper … but that is offset by these local-content requirements, which tend to increase price,” said Whittaker, echoing the opinions of two Quebec economists previously interviewed by The Gazette who said those requirements would add to the cost of power for Quebecers.
Through an order-in-council, Hydro-Québec was told to ensure that at least 30 per cent of the cost of wind turbines be spent in the economically challenged Gaspé and Matane regions and at least 60 per cent of total wind farm costs be spent in Quebec.
Hydro spokeswoman Josée Morin said the utility, which is expected to announce the winning bids for the new wind farms in February, will select “the best projects at the best price.”
According to the utility’s 2006 annual report, its average cost for power was 2 cents per kWh, But that rate is largely supported by older hydro-electric facilities that have been paid off.
Power from hydroelectric projects currently under construction will boost that average cost. Power from the Eastman 1-A-Rupert project will average 5 cents kWh, while power from the La Romaine project – currently under study – is expected to cost about 9 cents.
Yesterday, federal Natural Resources Minister Gary Lunn told the conference Canada has to be “a clean energy superpower” and that wind energy will help the country achieve that goal.
Lunn also announced that Quebec’s Baie-des-Sables wind farm, completed by Cartier Wind Energy, will receive about $31 million over 10 years through the federal ecoENERGY for Renewable Power initiative, a $1.48-billion program previously unveiled by Ottawa.
By Lynn Moore
The Gazette (Montreal)
3 October 2007
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