March 31, 2006

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Korky Koroluk

Alternative energy good for business

They didn’t get a whole lot of publicity, but the Ontario government made a couple of announcements in the days leading up to the provincial budget that have given heart to the alternative energy industry.

First came the news that a new system of standard offers will give developers of renewable energy projects 11 cents per kilowatt hour for 20 years when selling power to the provincial grid. The offers apply to wind, biomass and small hydro systems that don’t exceed 10 megawatts.

(If your high school physics is as far in the past as mine is, remember that one MW is enough power to supply 240 to 300 households. Ten MW, then, would supply 2,400 to 3,000 households.)

Wind power advocates, especially, are happy with the news. Of the various alternative energy technologies out there, wind is perhaps the farthest along the development path. But progress has been slow because potential investors have been wary about the likelihood of a decent return on their cash.

And for some, including Toronto’s WindShare Co-Operative, which is already generating power with a single turbine on the city’s waterfront, it means they will be able to begin paying dividends. WindShare had already announced it would pay no dividends for fiscal 2005, but was hoping for an improved standard offer that would bring in more cash.

The standard offer program involves simple 20-year contracts, and is expected to begin this June. It is open to any business, organization, co-op, First Nation, school, municipality or homeowner with a system that can be connected to the grid. It applies to new systems, of course, but also to any system built after Jan. 1, 2000.

Then came news that small solar power developments will fare even better, receiving 42 cents/kW-hour when selling to the grid. Again, good news, because solar developments lag far behind wind developments.

The arithmetic is simple. When electricity costs the consumer six cents/kW-hour, being able to sell to the grid for 42 cents is undeniably attractive.

This is important to all of us as the country struggles to reduce emissions of greenhouse gases. It’s especially important to the construction industry because construction of alternative energy systems means more business.

There won’t be any megaprojects to be built, of course, but there will be a steady trickle of smaller jobs that can add up to a lot of construction dollars.

Take the WindShare project, for example. All the development work — wind-resource assessment, the geotechnical studies and the environmental assessment — was done by Toronto companies. Although the turbine generator and the nacelle that houses it came from Holland, Toronto companies manufactured the tower and the turbine blades. The foundation design and construction, the crane services used in erecting the tower, all the electrical work, were done by Toronto companies.

Many were new, or fairly new, to the wind industry, so the job meant valuable experience and an entree into an important new niche market.

Something similar happened with Parc Eolien du Renard, in Quebec’s Gaspe area. The project used turbines partly manufactured in the province. The towers were manufactured in the Gaspe region. As a result, the construction phase ensured more than 30 per cent local Gaspesie content, and more than 50 per cent Quebec content.

So in both cases, local firms benefited, and I suspect there will be similar benefits for firms with the foresight to get into the solar market.

You might want to do some reading — and there is plenty available on the Web. Try these sources: Canadian Wind Energy Association: www.canwea.ca, Canadian Solar Industries Association: www.cansia.ca, Earth Energy Society of Canada: www.earthenergy.ca, Ontario Sustainable Energy Association: www.ontario-sea.org, WindShare Co-Operative: www.windshare.ca

Korky Koroluk is an Ottawa-based freelance writer. Send comments to editor@dailycommercialnews.com

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