In the wake of province’s push for Site C, Aeolis Wind Power awaits opportunity to develop a ‘world-class’ renewable resource

With winds of change blowing through BC’s Peace Region, wind power companies have been scrambling to develop projects in the hopes of landing a lucrative contract with BC Hydro.

Aeolis Wind Power initially appeared to be a step ahead of the pack, but now find themselves on the outside looking in, with no purchase agreements. In the wake of the provincial nod on the Site C hydroelectric dam, and the introduction of the potentially game-changing Clean Energy Act in BC, the company finds itself at a crossroads – despite having blazed the trail that others are now following

“We were the first ones to do major prospecting out there, and some of these ridges, like Hackney Hills, have a wind resource that is really second to none,” said Aeolis founder and CEO Juergen Puetter.

“Those are world-class wind resources, so we can’t imagine that it would not ultimately get developed at some point.”

That wind resource dovetails well with hydro power capacity on the Peace River, which can be ‘shaped’ to mutual benefit – when the wind is blowing, the flow through the dam can be reduced to store energy for when there’s little or no wind. The prospect of the 900-megawatt Site C dam, a project now entering its environmental assessment phase, could bode well.

“I think we’re going to take a wait and see attitude here,” said Puetter, adding there’s no clarity yet on how Site C would affect transmission capacity. “It could be good or bad – we don’t know.”

Site C will be a significant factor for the energy industry in Northeast BC, he said, as the push to produce more gas is also tied to the federal government’s announced intent to replace coal power plants with natural gas plants.

“That will further increase demand for natural gas, which means more drilling, more compressor stations, more processing plants, all of which take electricity,” he said. “BC Hydro will need a lot more energy than they think they have in their current plan.”

For Aeolis, more immediate concerns lie around the process of developing renewable power in BC.

On paper, Aeolis’ 1,400-megawatt Thunder Mountain project south of Tumbler Ridge appeared to be a can’t-miss prospect. With support from several area First Nations, a strong unidirectional wind, a secured a license of occupation, and an environmental assessment (EA) certificate approved in December 2009 – making it the only wind project under the 2008 Clean Power Call to gain that certificate so far – it appeared to be a strong candidate amongst the 68 proposals submitted.

But the project was not selected among the 19 renewable power projects awarded BC Hydro electricity purchase agreements (EPAs) in mid-March, which included five wind power projects near Tumbler Ridge and Chetwynd. Nor was it among the second and final group of EPAs awarded at the end of March for four more projects.

Finavera Renewables won EPAs for four separate wind projects in the Peace, while Capital Power’s Quality Wind Project near Tumbler Ridge was also approved. Of concern to Puetter are the viability of the projects selected.

“Some very strange awards were made,” he said. Not knowing BC Hydro’s selection criteria – which likely include price, quality of the wind resource, permitting, and First Nations agreements – makes it tough to evaluate, he said.

“We know the wind, we know the resource, we know a lot of things, and we also have seen how awards have been done by BC Hydro in the past, and what the consequences were,” he said. “If you look at the history, they have so far awarded four wind projects: two were never started, one went bankrupt and only one was built.”

The province’s foray into wind power development dates back to 2003, when Premier Gordon Campbell announced the Holberg Wind Energy Project had been selected as part of an $800 million investment in private-sector power. That project imploded due to an inadequate wind resource relative to the $55 per megawatt hour BC Hydro had agreed to pay for the power.

Under the 2006 Call for Clean Power, the Mount Hays Wind Farm Partnership near Prince Rupert never got off the ground, while Earthfirst’s Dokie Ridge Wind Project near Chetwynd went bankrupt before being picked up by Plutonic Power, and is now under construction. The only wind project built without incident was Altagas’ Bear Mountain Wind Project near Dawson Creek, which began selling power last November.

“What really irritates us is that during the call, when you’re not able to lobby or talk to anybody, some of the proponents are able to go to BC Hydro and negotiate a new deal behind closed doors, which have also been exempted from review by the BC Utilities Commission (BCUC),” he said, referencing the Earthfirst-turned-Plutonic project.

“There’s no transparency, we have no knowledge of what’s going on. And we don’t think that is a level playing field.”

The BCUC exemptions stem from the introduction of BC’s Clean Energy Act in late April. The Act would exempt Site C, the Northwest Transmission Line and recent BC Hydro calls for power from needing the commission’s approval. That means the reasons behind awarding the EPAs under the 2008 Clean Power Call are unlikely to ever become clear, said Puetter.

“We had expected a review…that would allow some understanding of what this is all about – what the pricing was, why were these projects selected over others. Now the door is shut on all that, and there’s no way for the BCUC to assess if this is actually in the ratepayers interest.”

The Act could mean new opportunities for Aeolis to sell its power, but those paths aren’t yet clear.

“We’re waiting to find out what the province means, because they are talking about export opportunities, with BC Hydro as an aggregator, yet have also invited the private sector to directly pursue export opportunities, which we are,” Puetter said. “We need to see, as time goes by, how much the BC government really wants to do this.”

Aeolis is still pursuing “a number of options” for Thunder Mountain and its 15 other projects in BC, and remains optimistic about the industry in BC.

“We hope the projects that were awarded get built, as projects that don’t get built hurt the industry – they hurt everybody,” he said.Blo