Municipalities and First Nations groups will find it hard to raise enough cash to build community wind farms unless the government pays more for the power, an organization representing various interest groups said Tuesday.
The Alliance for Community Energy has criticized the New Brunswick government’s financial projections for hypothetical power projects.
Raphael Shay, the group’s spokesman, said a government document released last week gives the most optimistic outlook for the capacity at which wind farms would operate, as well as low-balling how much wind farms cost to put up.
Shay said the 10 cents per kilowatt-hour the province has offered proponents for power – with annual increases pegged to inflation – is not enough, considering what he views is the government’s overly idealistic vision.
“They’ve set up a policy, the feed-in-tariff policy, and they’re using this as an example to try to justify that feed-in-tariff policy and there are a few technical details we believe are wrong with regards to capacity factor and capital costs,” Shay said.
The Alliance for Community Energy is a group of about 50 people who recently formed the network of municipalities, woodlot owners, farmers, energy co-operatives, renewable energy companies and environmental groups – some of whom are interested in small-scale wind.
Last week, the Department of Energy released Getting to the Tipping Point, a guide that provides financial information about developing a wind energy project, including advice about financing a smaller-scale wind farm.
The group says the government assumes a community wind farm would produce power 34.8 per cent of the time – the capacity factor – but that the industry average for smaller-scale wind farms is 25-30 per cent.
Also, the group says the Department of Energy suggests it would cost $2.4 million per megawatt for a community wind farm, when the Canadian Wind Energy Association estimates costs of $2.8 million per megawatt.
“We’re proposing that the feed-in-tariff be set to cover the cost of production of energy with a rate of return,” Shay said, suggesting 12-14 cents per kilowatt hour would be better for a community wind farm.
The province’s policy is to pay the same price – 10 cents per kilowatt hour – for every renewable energy project, whether it’s a wind farm, hydroelectric facility or biomass operation.
Shay said some of his organization’s members are part of the 12 groups or organizations the province has said have expressed interest in developing community energy projects worth more than $300 million, but that those groups might not be able to source financing.
In an interview, Energy Minister Jack Keir disputed some of the numbers the Alliance for Community Energy put forth and remained unconvinced NB Power needs to be directed to pay more to purchase 75 megawatts of power from community energy projects.
“There’s got to be a balance there,” Keir said. “The more you pay for electricity, the more ratepayers pay.”
Jean-François Nolet, Quebec and Atlantic Canada policy manager for the Canadian Wind Energy Association, said he supports the New Brunswick government’s community energy policy but agrees the province needs to pay more for wind power to make projects viable.
“You can see similar markets in Quebec and Ontario, where you see prices in those provinces similar to the 12.5 cents we are proposing here,” Nolet said.
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