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Alberta company's turbines spin wind into gold

A Calgary wind power group hopes to take advantage of Alberta’s limited transmission capacity at a time when interest in this province in so-called renewable energy generally – and wind power in particular – is red hot.

Wind power advocates and government officials believe that as many as 3,000 megawatts, or nearly $7 billion in wind power projects, could be developed in Alberta in the near term, with up to 5,500 megawatts, or more than $12 billion, over the longer term.

Privately owned Greengate Power Corp. has aggressive plans to develop up to 950 megawatts of generation at six sites through southern and central Alberta. The only things the sites have in common is that they are windy, and there’s transmission capacity available nearby.

“What we think that allows us to do is to significantly accelerate the ability to connect those projects,” says Dan Balaban, the company’s founder, president and chief executive.

“It doesn’t matter how windy a site is, if you can’t connect to the grid or you’re waiting for a transmission line, that introduces risk and takes time,” adds Balaban, a former technology management consultant with Ernst & Young LLP and PricewaterhouseCoopers LLP and a technology entrepreneur.

In fact, projects throughout southern Alberta have been delayed because adequate transmission doesn’t exist to carry the power away.

Greengate is using that challenge as a strategic advantage to build only where capacity already exists. Altogether, using an industry yardstick of $2 million to $2.2 million per megawatt, Greengate is aiming for a portfolio worth up to $2 billion.

“Our plan is to move forward as quickly as possible on all the projects,” says Balaban, noting interconnection applications have been filed for all six locations. If the Alberta Electric System Operator gives the green light, Greengate’s pace of development is expected to accelerate.

The firm is not the only one anxious to take advantage of a very positive climate in this province for wind power development.

“There’s a tremendous amount of anticipation that there will be some major developments in Alberta,” said Energy Minister Mel Knight earlier this fall. “What we see in the short term here is a potential in the neighborhood of 3,000 megawatts.”

Alberta currently has about 500 megawatts of wind power, but it is becoming increasingly competitive with other forms of generation, including gas-fired, but has no fuel costs and is viewed largely as environmentally benign.

The process of building wind generation, however, is not simple. There’s the initial site identification, along with lengthy wind resource testing, environmental assessment work, municipal consultation, engineering work, transmission connection applications and a myriad of other factors that have to be covered.

At the same time, with wind power suddenly attracting interest worldwide, turbines are in short supply, creating a minimum timeframe for projects of about two years, says Balaban.

“I’m setting a corporate target of three years for us to get up and running. Anything quicker than that is a bonus,” says Balaban. “Our Stirling project is farthest along, because we’re already four months into our wind monitoring. It’s looking very positive.”

Greengate is definitely a family concern. Balaban’s father, Jack, brings a 35-year background in oil and gas and mining to the table, while brother Jordan contributes business development expertise. Although the Balabans will be able to finance the projects through their speculative and development phase, the bulk of the $2-billion investment required will need to come from outside investors. Balaban doesn’t see that as an insurmountable hurdle.

“It’s certainly a challenge and it’s certainly ambitious,” he says. “Fundamentally, I believe there’s an abundance of money out there in the marketplace and it’s looking for a nice, secure home to go to,” Balaban adds.

“I believe that as a long-term investment, there’s nothing better than owning a renewable energy facility. It’s something that’s aligned with what our society wants to do and it delivers stable, steady cash flow, so you know, generally speaking,, how this thing’s going to perform before it gets built. And it’s relatively recession proof.”

In late September, the industry got a major boost when the province and the Alberta Electric System Operator lifted a cap of 900 megawatts, imposed in May 2006, on the amount of wind power that could be produced in Alberta. The aim of the cap was to limit the impact of wind power’s variability on the overall transmission system.

“There is tremendous interest in taking advantage of Alberta’s very, very good wind resource,” said Canadian Wind Energy Association president Robert Hornung when the cap was lifted. “At the end of the day we’re looking at significantly enhancing the amount of wind that’s coming forward.”

Variability is also a dimension of Greengate’s strategy and the key consideration in their plans to develop sites across a broad swath of Alberta geography.

Although not all of the company’s planned development sites have been made public, they have started the process in at least three places; Radar Hill near Red Deer, which would have up to 100 megawatts; Wintering Hills, near Drumheller, which would accommodate 150 megawatts, and Stirling, near Lethbridge, which is expected to have 100 megawatts of production.

“Part of our strategy is geographic diversity,” says Balaban. “It’s not conclusive, but, logically speaking… it’ll balance out the peaks and valleys of the wind blowing in one place and not the other, and vice-versa.”

Calgary Herald


26 November 2007