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The biggest Canadian players are large firms and utilities that also operate in other energy businesses. Foreign firms are also making inroads. (Daniel Leppens/Getty Images/iStockphoto)
The biggest Canadian players are large firms and utilities that also operate in other energy businesses. Foreign firms are also making inroads. (Daniel Leppens/Getty Images/iStockphoto)

ENERGY

Wind power’s prevailing direction in Canada? Big and foreign-owned Add to ...

The vast majority of Canadian wind power production is now controlled by a handful of large companies, many of them foreign owned, replacing community groups that were initially seen as the backbone of alternative energy production.

The takeover of the business by large companies is one reason behind the backlash against the rapid installation of huge, looming turbines, particularly if they are near recreational property or agricultural communities. An analysis by The Globe and Mail shows that more than 90 per cent of the current 6,500 megawatts of wind power capacity in Canada is in the hands of large companies, and about 25 per cent is held by foreign interests.

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The biggest Canadian players are large firms and utilities that also operate in other energy businesses – power utility TransAlta Corp., pipeline operators Enbridge Inc. and TransCanada Corp., oil sands developer Suncor Energy Inc. and energy conglomerate Brookfield Renewable Energy Partners LP, for example.

Indeed, Enbridge and EDF EN Canada Inc., a subsidiary of French power giant Électricité de France – already partners on big wind farms in Quebec – on Monday announced that together they have paid $600-million to purchase a huge 300 MW wind project north of Lethbridge, Alta. The Blackspring Ridge wind farm, taken through the development phase by Calgary based Greengate Power Corp., will see construction begin later this year.

EDF already has about 380 megawatts of operating wind farms in Canada, but it will hold properties with capacity of well over 1,000 MW by the end of 2015, when projects currently under way – including Blackspring – are completed. Enbridge, which has about 750 MW of wind power capacity, will see its total grow to close to 1,500 MW in the next few years.

Other foreign players with multiple wind projects in Canada include Florida-based NextEra Energy Resources LLC , Chicago-based Invenergy Wind LLC , France’s GDF Suez SA , and Spanish wind, energy and water multinational Acciona SA .

Warren Mabee, a geography professor at Queen’s University in Kingston, said economics are the reason Canada’s wind power business has ended up mostly in the hands of big players. “The simple fact of the matter is that industry is far better prepared [than community groups] to take the risks and put the projects together and get them built,” he said.

While Ontario’s Green Energy Act – introduced in 2009 to promote alternative energy in the province – initially put a lot of emphasis on community participation, those projects tend to be smaller, consequently their per-kilowatt costs are much higher. Even just connecting smaller projects to the grid can be more difficult, Prof. Mabee said. “I know that in practice, it has just been easier in Ontario to connect the big projects. A really big project that comes online is just a higher priority.”

In theory, community-based projects are less likely to create friction than corporate-owned wind farms. “There would be more input and there would presumably be much greater buy-in before anything moves forward,” he said. “But the economics works against it.”

George Smitherman, a former Ontario energy minister who was responsible for the introduction of the province’s Green Energy Act, said he thinks the government should have been more effective in engaging local community ownership. In an e-mail, he said he admires Denmark’s wind industry because, in that country, “projects often involved hundreds of local residents as engaged investors and I think that would have been helpful here, too.”

Some provinces have designed their support programs specifically to encourage community involvement. Nova Scotia has put particular emphasis on local investment in wind power through its ComFIT (Community Feed-In Tariff) program. It pays very high prices for power produced in community-based renewable projects, provided they have local input. Individual municipalities, First Nations, co-ops, universities and non-profit groups can participate. Ontario has made changes to its feed-in-tariff program for similar reasons.

The Nova Scotia government has said the key reason for designing the program this way was to get community buy-in by making sure there was local control of all projects. In March, the first six turbines were commissioned under the ComFIT program, but they are all very small – just 50 kilowatts each. There is just enough electricity from each turbine to power about 20 homes.

The entire ComFIT program is expected to generate about 100 MW – including other renewable projects in hydro, biomass and tidal power technology – as part of the province’s efforts to reduce reliance on coal-based power generation.

Over all, it is far more cost effective for large companies to build wind turbines than for small, community based organizations to do so, said Mike O’Sullivan, senior vice-president of development at NextEra, a Florida-based company that has 240 MW of wind power already operating in Canada and more than 10,000 MW across North America.

“The cost of doing just one or two or three turbines is a lot higher than doing them at scale the way we do it,” Mr. O’Sullivan said. In addition, a big company with a strong balance sheet has a much easier time financing the purchase of turbine equipment, he added.

Nextera, which now operates in Nova Scotia, Quebec, Ontario and Alberta, has several more projects under development in Canada, and will have invested more than $2-billion in this country by the end of 2014.

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