New Brunswick has officially been in the business of wind energy since the 96 megawatt wind farm at Kent Hills began pumping power into the grid on New Year’s Eve
But sustainable development expert Yves Gagnon says more needs to be done to ensure New Brunswickers reap the huge economic windfall that can be generated by wind farms rather than allowing profits to flow outside the province.
Although efforts were made to ensure the $170 million Kent Hills project, which is located 40 kilometres southwest of Moncton, and three other wind farms currently in development elsewhere would have a strong economic impact in New Brunswick, Gagnon said the results have been meager.
“The positive is that we have a significant source of renewable energy, but we did not optimize the potential for economic development in New Brunswick.”
Gagnon said the Liberal government wasn’t very effective in an attempt to maximize local content through special provisions in its request for proposals for wind farm development.
“On the downside of it is that while there was a criteria to choose projects that would maximize the economic impact in New Brunswick, we are not seeing much results,” said Gagnon, the K.C. Irving Chair in Sustainable Development at the Université de Moncton.
“Beyond the construction phase, and the lease payments and tax revenues, there is not much economic impact in New Brunswick.
The Kent Hills project is owned and operated by the TransAlta firm of Alberta, and three other projects that are under construction in Aulac, Lamèque, and Caribou Mountain are owned by international firms.
Gagnon believes New Brunswickers need to be given the chance to own a piece of the province’s fledgling wind energy sector through renewable energy bonds.
“The place to make money in wind energy is you need to own the wind farm,” said Gagnon.
“If you don’t own the wind farm, you aren’t making money. If it’s owned by foreign investors, well the foreign investors are going to make the money.”
In a report commissioned by provincial government, Gagnon recommends the introduction of a renewable energy fund that would be funded through the sale of bonds to individual New Brunswickers.
Gagnon says the bonds could offer New Brunswickers a chance to invest in their own communities rather than sending their money to mutual funds in central Canada.
He said investors could benefit by knowing exactly how their money is being spent, and potentially receive fiscal exemptions similar to RRSPs and tax credits from a provincial government that would benefit from seeing community wind projects pop onto the province’s landscape.
Gagnon says the province can facilitate the creation of locally-owned wind farms by asking NB Power to purchase a certain percentage of its energy from community wind farms that would be financed by a renewable energy fund in a series of small pilot projects. He recommends an allocation of 100 megawatts to community wind farms.
Gagnon isn’t concerned that the current economic slowdown will damage the development of wind energy.
He said the economy should be stabilized during the two to three years it takes to get a community wind farm off the ground.
And due to the collapse of several large corporations that were planning large wind farm projects, the resulting flood of turbines on the market has had the effect of lowering prices, said Gagnon.
Furthermore, as the province looks at adding wind power to its energy hub, Gagnon said the Liberal government should either task NB Power, or another new crown corporation, with the role of developing the vision to ensure profits stay in New Brunswick.
He said only New Brunswick organizations can ensure that the profits, and spinoffs, stay in the province.
“I think it’s going to be important that if we go toward this big wind vision it is important that it should be developed by an organization based here in New Brunswick,” said Gagnon.
A recent report authored by a Danish firm found that New Brunswick could eventually be home to 4,500 megawatts of wind energy, which is more than the power that currently flows through the province’s entire grid, and much more than NB Power’s current commitment of 400 megawatts.
“All things being equal, wind energy can be to New Brunswick what hydro power was to Quebec: essentially an engine of economic development,” said Gagnon.
NB Power spokeswoman Heather MacLean says it is too early to discuss how much wind power the utility will be willing to purchase before it has evaluated how the initial 400 megawatts of wind energy mixes with the utility’s other sources of power.
MacLean said the utility’s strategic planning group is reviewing how wind energy can play into the overall energy mix as it reduces its reliance on fossil fuels, and it is using this first phase to better understand how wind power mixes with other generation sources.
As for NB Power’s participation in an over-arching vision for wind energy exports, MacLean said it is too early to discuss that possibility.
“I think it would depend on a number of variables, and it would be premature to talk about that at this point.” Energy Minister Jack Keir has promised to address the structure of NB Power following criticism from the province’s energy regulator. Keir has received a draft report from two experts who are reviewing the structure, which was moved closer to a private sector model by the previous government when it was hoped that competition could enter the market.
TransAlta spokesman Jason Edworthy said the Kent Hills turbines will be adjusted and fine-tuned over the next two months to ensure maximum energy generation, but he said power is already flowing as scheduled.
Edworthy said the site will produce 280,000 megawatt hours per year, which is about enough to power all of Moncton’s homes.