FREDERICTON – New Brunswick municipalities are being warned that a government document on community wind farms could mislead them into spending tens of millions of dollars on projects that could end up losing money.
The Energy Department recently published a paper called New Brunswick Community Wind Projects – Getting to the Tipping Point.
The paper includes a mock business plan based on NB Power paying 10 cents a kilowatt/hour plus an inflation factor for wind-generated electricity.
The province wants to eventually buy 75 megawatts from community-owned renewable energy projects, but the business plan assumes a small wind farm would operate 34.8 per cent of the time.
Raphael Shay, a spokesman for the Alliance for Community Energy, said Monday that 30 per cent is more realistic and that would have a drastic effect on a project’s cash flow.
He said only the largest wind farms in Canada have a capacity of 34.8 per cent, he said.
“The Department of Energy is trying to justify the unrealistic price they have set for electricity from community wind projects by assuming far more electricity production than industry averages,” he said.
A Summerside, P.E.I., wind farm was expected to have a capacity of 36 per cent before it was built and now operates at well below 30 per cent, he said. That $27-million P.E.I. project had a $21-million government grant, he said.
The New Brunswick mock business plan is based on a community raising 30 per cent of the cost of a wind project and borrowing 70 per cent, although one alternate plan includes a $5-million government grant.
The mock business plan suggests that a 15-megawatt wind farm with 10 turbines, each 80 metres high with 82metre diameter blades, would cost between $30 million and $35 million to build and would have a positive cash flow of just more than $1 million a year on annual revenues of $4.6 million.
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