The owner of the proposed $200-million Hand Hills wind power project near Drumheller has won Alberta Utilities Commission approval for a four-year delay in its completion schedule.
Privately held Calgary green power company Bluearth Renewables Inc. cited a delay in winning regulatory approval for the lines that would connect the project to the provincial grid in its request to change its completion date from Dec. 31, 2014, to Dec. 31, 2018.
But Marlo Raynolds, vice-president of market development, conceded Wednesday that the company also needs more time to nail down purchase agreements in order to win financial backing.
“Bluearth would not be in a position to proceed with the project until, one, that transmission issue is resolved and, two, there are actual power purchase agreements,” he said. “We’d need both of those things in place to make the financial decision to go.”
In an earlier e-mailed statement, the company said that the commission had placed “in abeyance” an application by ATCO Electric to construct the transmission link to Hand Hills pending the outcome of a separate proceeding dealing with overall transmission issues in Alberta.
“BluEarth asked for an extension to our construction time frame for the Hand Hills project because of the uncertainty about the duration of the abeyance,” the statement said. “Essentially, we cannot begin construction until we know that the transmission infrastructure will be constructed to tie in the facility.”
The 78.2-megawatt project was owned by Joss Wind Power Inc. when it received AUC construction and operation approval in August 2012. Bluearth acquired it for an undisclosed amount in early 2013.
AUC spokesman Jim Law said Wednesday it’s not uncommon for players in Alberta’s power market to object to a project’s approval for various reasons and the regulator then steps in to settle the issue.
He said AUC’s decisions are usually delivered in “weeks or months” unless there is a need for a hearing.
Raynolds said Alberta is a difficult market in which to develop a renewable power project because of high upfront capital costs – although operating costs are quite low when construction is finished.
“Over time, we’re going to see power prices increase in Alberta but, despite that, most large consumers are only doing short-term purchases of power,” he said, adding he remains optimistic that Hand Hills will eventually be built.
The project is to be located on 3,000 hectares of land near Delia, about 28 kilometres northeast of Drumheller.
BluEarth was created by brothers Ross and John Keating after they lost a $1.6-billion takeover battle in 2009 with giant TransAlta Corp. for Canadian Hydro Developers Inc., a green power company they had founded.