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Who has seen the wind?

VANCOUVER -Stephen Cheeseman has cashed out 20 years of savings, left a successful career as a uranium and base metals geologist and begged his friends and family for as much money as they would invest in him. All to chase the breeze.

Mr. Cheeseman is, like dozens of others in British Columbia, a wind prospector who is making it his life’s work to grab hold of the choicest mountain ridges with the stiffest gusts before anyone else does.

Over the past several years, it is a play that has drawn people from all walks of life, from construction workers to marine engineers to lawyers, although in recent times the field has been populated by large domestic and overseas corporations who have found in the province’s peaked topography a gusty opportunity for a clean power windfall.

But there remain those who, like Mr. Cheeseman, have dedicated their own lives to a one-man, gold-rush-style effort to buy up prospective land, secure enough funding to test whether the wind blows over it and, ultimately, raise a crop of wind turbines on it.

He is hardly alone. In the past two years, the province has handed out more than 300 investigative use permits – an initial-stage evaluation permit much like an exploration permit – to about 1.3-million hectares of land.

It is, however, a risky business. Experience in independent production of hydro and other renewable energy sources has shown that even those fortunate enough to win BC Hydro power contracts have difficulty actually delivering electricity.

Already, more than half of the electricity production contracted for in the province’s 2006 call for power has fallen by the wayside; earlier calls had attrition rates near 100%.

And forget the hundredfold returns mining prospectors dream of: if they can make any money at all, wind developers will likely see the 9% to 12% returns more commonly in real estate investment.

So, with relatively high risks and relatively low returns, why chase the wind?

“It’s a combination, of wanting to give back to society in light of the issues that we have with respect to global warming and renewable energy,” said Mr. Cheeseman.

It has not, however, been easy. Mr. Cheeseman, the chairman and sole employee of Chinook Power Corp., spent the better part of two years educating himself, completing courses on complex modelling software and gleaning knowledge from experts in the industry. Finding a breezy ridge may seem as simple as wetting a finger and sticking it in the air, but wind prospectors are looking for a spot where the wind blows consistently.

Complicating matters is a severe lack of information. Miners have provincial and federal geological surveys that publish maps showing the rough outlines of mineral deposits. Wind prospectors say Environment Canada’s national wind atlas is too general to be of much use, and are left to gather clues from airport and highway department weather stations.

“Data really is not readily available, so you have to spend a lot of time collating it and putting it into a usable format,” Mr. Cheeseman said.

Others, such as Kelly Cairns, a corporate lawyer who founded Aspen Wind Energy, have called on their own back country experience for leads. Aspen has gained rights to 25,000 hectares of prospective ground in southern B.C., an area over which Mr. Cairns had spent three decades hiking and skiing.

“Knowing a bit of the ground, that helped a lot,” he said. But there’s only one sure way to know: Spend $100,000 to helicopter a meteorological tower to a prospective site, then wait a few seasons.

“It’s kind of like poking a hole in the ground and looking for oil and gas or minerals,” Mr. Cairns said.

Plenty of people are doing exactly that. Six years ago, BC Hydro estimated the province could produce 3,000 gigawatts of wind power annually, or 5% of total yearly electricity consumption. Since then, publicly announced projects have already well exceeded that total, and BC Hydro has awarded contracts for nearly 1,000 gigawatts of wind power.

But the time it is taking to get that power onto the grid should serve as a warning to speculators, said Steve Davis, the president of the Independent Power Producers of B.C.

He bristles at the suggestion BC Hydro’s need for clean power – the province is moving to become energy self-sufficient by 2016, and all new electricity must be free of greenhouse gas – has triggered a gold rush mentality.

“The idea of just going out for land grabs is not really how it works, because it takes four years to work these projects through,” he said.

Recent weeks have brought a glut of experienced personnel to at least one wind company, NaiKun Wind Development Inc., which hired the president of the Insurance Corporation of B.C. and a project director from SNCLavalin. Elsewhere, smaller companies are partnering with such big names as AltaGas Income Trust, ENMAX Corp., Deutsche Bank AG and Epcor Utilities, which is developing one of Mr. Cheese-man’s 17 wind sites.

Still, despite the maturity those names bring, Mr. Cheeseman said his own work remains a personal quest.

“Obviously, it’s a bit of a leap of faith,” he said. “But if you stick to your guns, hopefully you’re successful.”

Nathan Vanderklippe

Financial Post

21 April 2008