Proponents behind the 300-megawatt wind farm announced for the St. Joseph area last week say they are confident they can raise the necessary capital to proceed with the project, despite financial uncertainty facing one of the project’s key partners.
The Australian-based parent company of Babcock & Brown Canada, the partner in charge of financing and building the Manitoba project, is facing bankruptcy. But officials say its North American arm is on solid financial footing.
“Babcock & Brown’s North American infrastructure business is very strong and profitable,” said Matthew Dallas, head of media relations for Babcock & Brown.
Manitoba Hydro will purchase wind-generated power as part of a proposed 25-year agreement with Babcock & Brown’s North American Energy Group, which has interests in more than 20 wind farms across North America with an aggregate value in excess of $3 billion. The group has worked closely on this project with local residents and Calgarybased wind developer BowArk Energy.
The $800 million wind farm planned for the St. Joseph area in southern Manitoba would generate power from 130 turbines, making it the largest in Canada. The project is subject to regulatory approvals and execution of a power purchase agreement. But construction is expected to start in 2009 with power deliveries starting as early as 2011.
A spokesman for venture partner BowArk Energy Ltd. said he isn’t worried about Babcock & Brown’s status.
“They’ve been a great partner. They’ve put a lot of money into the project and a lot of commitment,” said president Brad Sparkes. “Their business is run very independent of Australia,” he said.
Manitoba Hydro has no monetary investment to the project. Only when the turbines are producing power, will Manitoba Hydro step forward and purchase the power.
“We don’t pay anything until they deliver power. All the risk is on their side,” said Glenn Schneider, division manager of public affairs.
The Manitoba government’s goal is to collect 1,000 megawatts of power from wind. Manitoba’s first wind farm, located near St. Leon and 99 megawatts in size, became fully operational in June 2006. It also provides electricity to Manitoba Hydro under a 25-year Power Purchase Agreement.
President and CEO of Manitoba Hydro, Bob Brennan said Hydro’s mandate to develop 1,000 megawatts a year comes with the stipulation that the wind power is economical. “At the end of the day we think we have something that can work,” he said.
In the event that the deal doesn’t happen, Hydro will go back to the drawing board and put out a new request for proposals.
“One of the good things about this deal was the place was good and where it was located in our system was good. We could absorb the power with not much work on our system. That helps,” he said.
While heralded as an important source of green energy for Manitoba, some local landowners are worried about noise pollution.
Business operator Todd Braun has continued to be vocal in his objections to the project. The owner operator of Elemental Stone just outside of St. Joseph relies on “customer experience” to grow his business. His tranquil yard is a key selling feature for the business and he fears the hum of the turbines will detract from that. Braun said he has received verbal promises that there will be appropriate setbacks, but there has been nothing in writing. Changing maps have had him nervous about whether the company will live up to the promise.
“Quite simply we are at the mercy of the company and the municipality,” he said.