CALGARY – TransAlta Corporation, Canada’s largest independent power producer, will be adding another few towers to its renewable portfolio, announcing Monday it will be going forward with a $205 million wind project on the Gaspé Peninsula.
The 66-megawatt New Richmond wind farm will be the second in Quebec for the Calgary-based power company, boosting its wind generation up to 1,139 MW, said chief executive Steve Snyder.
“Building our presence in a key market such as Quebec is an important part of our goal to enhance shareholder value, as well as strengthen our position as the premier wind power generator in Canada,” Snyder said in a statement.
The project comes with a 20-year power purchase agreement with Hydro-Quebec Distribution, and is expected to be commercial by the end of 2012.
TransAlta runs more than two-thirds of the country’s installed wind generation, just over half of it in south western Alberta where some of Canada’s premier wind corridors lie.
The company already operates a wind farm in Quebec, the 99-MW Le Nordais wind facility, also located on the Gaspé Peninsula
The investment in 33 wind turbines for the new project will have a modest effect on TransAlta’s bottom line, analysts said.
Chad Friess estimated the impact would be about three per cent accretive to earnings, post 2012.
“This is exactly what they want to be doing,” said Friess. “It’s contracted and it’s clean energy, two things their portfolio isn’t overly full of right now.”
More than half of TransAlta’s power is coal-fired, an unattractive source of energy in an increasingly carbon-constrained world.
Canada invested $1.7 billion in wind power projects last year, said the Canadian Wind Energy Association. Current installed capacity stands at 4,285 MW from 131 wind farms scattered across the country.
“Wind energy is well established in many European countries and has a long history in the United States, but it’s still a relatively new contributor to Canada’s electricity supply,” said Robert Hornung, CANWEA president, in a recent release. “With the continued growth of wind energy we see the evolution of a new and vibrant industry that is delivering manufacturing jobs, revitalizing rural economies, and generating emissions-free power.”
Alberta has about 806 MW of wind power online, with dozens of more wind farms being built or on the drawing board. Much of the attraction for the renewable energy source comes from their associated carbon credits which are sold to industries which use them to meet provincial carbon emission requirements
Monday’s decree by the Quebec government allows TransAlta to begin the pre-construction phase of the project, said TransAlta spokesman Bob Klager.
“This allows us now to prepare the roads to handle the transport of the towers and turbines,” Klager said. “The permitting process will continue throughout the development and construction phases, and we are confident things will fall into place.”
Once completed, the New Richmond wind facility will produce enough energy to power about 10,500 Quebec homes.
Friess noted TransAlta didn’t have a lot of cash flow to throw around as the Alberta power market, TransAlta’s main revenue source, had been soft to the end of 2010. However, power prices in the province have strengthened this year after two major coal-fired power plants were forced into retirement, likely increasing profits and opportunities for the power company, he said.
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