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Offshore wind farm still on books, despite ban

The one company that holds a signed contract to build a wind farm in the Great Lakes is going ahead with plans for the project, despite the ban on offshore wind development put in place by the Ontario government earlier this year.

Windstream Energy Inc. says it could begin construction at a proposed wind farm in Lake Ontario near Kingston as early as 2014, if the province lifts its ban soon. The 300-megawatt wind farm would have as many as 100 turbines, anchored in the lakebed five kilometres off shore.

Windstream president Ian Baines said in an interview that the company’s contract to supply power to the province, which was granted in mid-2010, is still in effect. In fact, he said, it cannot be cancelled because of the protections Ontario’s governing Liberals put in place before the recent provincial election.

To ensure that renewable energy contracts under Ontario’s feed-in-tariff program would not be cancelled if they lost the election, the Liberal government entrenched the legal rights of contract holders in August, preventing the province’s electrical planning agency from terminating them.

Mr. Baines said his project was put on hold when the province announced its offshore ban in February. The government said it would not allow any more development in the Great Lakes until more scientific research was conducted.

But the contract was not cancelled, Mr. Baines said. While detailed engineering work was stopped, and the environmental assessment process suspended, Windstream continued to check out potential manufacturers so the project would eventually meet its 50-per-cent requirement for Ontario content in equipment and services.

Indeed, the company found it could surpass that level, Mr. Baines said. “We’ve found almost 60-per-cent Ontario content using sources in Hamilton and eastern Ontario, and a few other areas.”

Right now, Windstream is gearing up to “re-engage with the province and move the process forward,” he said.

Ontario energy ministry spokesman Andrew Block confirmed that Windstream’s contract was not cancelled, but he said there can’t be further development while studies on the impact of offshore wind projects are under way. The province’s natural resources ministry is conducting several research projects and is collaborating with other agencies and governments to “better understand the potential effects of offshore wind-power development on a range of natural resource values,” he said.

Still, Mr. Baines said construction could start within three years, depending on when the government makes a decision on new regulations. The province has already proposed that no offshore wind turbines be closer than five kilometres from the shore, and Windstream has reconfigured its project for that distance. It had originally planned to build the turbines about two kilometres from shore.

“Once the rules of engagement are known, we are going to hit the ground running,” Mr. Baines said. “We are going to restart all of the engineering, environmental permitting and so on.” Depending on how turbine technology has advanced by the time construction starts, the project could have as few as 50 large 6 MW windmills, down from the original plans for 100 smaller ones, he said.

The company is not “financially challenged,” despite the delays, Mr. Baines said. Windstream has a number of deep-pocketed private backers who are high-net-worth individuals, and funds, predominantly in the oil and gas business, he said.

Another offshore wind company is less sanguine. Trillium Power Wind Corp. has filed a $2.25-billion suit against the Ontario government, claiming it has faced huge losses because it had to cancel projects. Trillium, however, did not have any signed contracts for its planned wind farms.

Mr. Baines said it is important for the government to make a decision, and get the offshore wind business back on track “What we need now is certainty,” he said. “We have in Ontario the opportunity to have a large investment of foreign capital at a time when we really need it … Give us the rules and we’ll meet them.”