Once called a “legacy project” for Niagara, the Region’s foray into wind farms with Rankin Construction is being nixed after nearly a decade of setbacks.
Niagara Region and Rankin Construction are dissolving their Wind Energy Niagara Corp., which they created in 2006 after talks dating back to 2001.
The $23-million joint venture was supposed to see a five-turbine wind farm in Wainfleet generate up to 10 megawatts of electricity, or enough to power about 3,500 homes. The partnership would receive 11 cents per kilowatt-hour from the province as part of its green energy program.
But obtaining a long-term power contract to produce a renewable source of electricity proved elusive.
“We were ahead of our time,” said Rankin CEO Tom Rankin, explaining the hurdles the partners had to try to overcome.
When they started, he said, there were no provincial guidelines regarding the setup of turbines, such as how far they needed to be from roads. So the Region developed its own wind-energy policies that became moot in 2009 when the province introduced regulations.
The government also introduced the Feed-in-Tariff program, and despite the legwork by Niagara partners, there wasn’t enough capacity on the grid for a contract.
Rankin said future contracts will have to be bid on, but impending changes to the program could require more than two shareholders.
On top of that, Rankin said, windmills today cost more than they did back in 2001 because the price of steel went up.
“It wasn’t economical for us to go ahead,” he said.
The project was one Rankin passionately believed in, calling the wind farm in 2006 a “legacy project” for Niagara.
“I thought this was the direction we should be taking,” he said. “I feel bad for the advocates on regional council.”
Each side will lose some of its investment. While the Region said it will get back its original share of $577,000, it has spent $420,852 on development costs, applications, environmental assessments and wind resource studies.
Rankin said his company lost approximately $500,000.
Regional chief administrative officer Harry Schlange could not be reached for comment, but said in media release Wind Energy Niagara was set up when the environment for investing in green energy was different than it is today.
“Council was early out of the gate on this because it was a good fit with the council business plan to seek environmentally friendly technologies and adopt green energy practices,” he said.
The Region cited potential changes in the current Feed-in-Tariff competitive process as a factor for the dissolution. As well, its leases, wind data and environmental studies have become dated, reducing the likelihood of obtaining a contract under the Feed-in-Tariff program with Ontario Power Authority, it said.
Rankin said the dissolution of Wind Energy Niagara doesn’t mean his company won’t pursue the wind-energy project on its own if the community is still interested.
“We’re not saying the project is dead, but the partnership is dead.”
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