General Electric Co. (GE-N )is set to buy its first wind power project in Canada, another sign the global recession hasn’t quashed interest in the fast-growing renewable energy sector
GE, through its energy financial services arm, struck a tentative deal to take over a partly completed, 145-megawatt wind project in northeastern British Columbia. The deal is with upstart EarthFirst Inc., which is under court protection from creditors.
If conditions such as renegotiating several existing contracts are met, GE will be joined in the project by Plutonic Power Corp. (PCC-T) a small Vancouver run-of-river hydro power developer. Plutonic and GE are working together on several run-of-river projects north of Vancouver. (A run-of-river system does not require a large reservoir to provide power.)
About $100-million has been sunk into the EarthFirst wind project. An earlier EarthFirst budget suggested it will cost another $250-million to complete.
GE has been looking at the EarthFirst project since late last year, after Calgary-based EarthFirst filed for creditor protection.
“We are seeking ourselves to grow in Canada, in the renewable energy category especially,” said Andy Katell, a spokesman for GE Energy Financial Services.
GE and Plutonic would be 50-50 equity partners, while mostly funding the completion of the project with debt financing. There is a second phase of the project that has been submitted as a bid for a new call for green power from BC Hydro, in which GE-Plutonic have put in a massive bid for a $4-billion run-of-river project.
“Plutonic is very much a growth-orientated company,” Donald McInnes, chief executive officer of the firm, told investors and analysts yesterday.
“We’re always looking for other opportunities.”
Plutonic shares jumped 19 per cent yesterday.
Investors were excited because the wind deal shows Plutonic’s connection with GE is “very strong” and diversifies Plutonic’s potential revenues, according to analyst Tania Maciver of Haywood Securities in Toronto.
B.C. is the only province in Canada without any installed wind power. The country has about 2,600 megawatts of wind capacity, enough to power 750,000 homes, about 1 per cent of Canada’s electricity demand.
The first B.C. wind power project, backed by AltaGas Income Trust, is expected to be ready later this year.
GE also has a partnership with another Vancouver upstart, Finavera Renewables Inc., which has four projects totalling 295 megawatts proposed to BC Hydro.
Results of BC Hydro’s call for green power are expected in the next month or two.
The GE move comes several months after Eddie O’Connor, an Irishman who is one of the world’s successful wind entrepreneurs, joined forces with privately owned Alberta Wind Energy Corp. on an $850-million project in Alberta’s southwest.