April 13, 2009

Investment paves the way to construction of Alberta Wind Energy project

RICHARD GILBERT

staff writer

As the global recession deepens and credit markets remain tight, a Calgary-based company has attracted hundreds of millions of dollars in investments from an international green energy developer.

The $840 million joint venture, between the Alberta Wind Energy Corporation (AWEC) and Dublin-based Mainstream Renewable Power, paves the way for construction of two wind farms near Pincher Creek Alberta

“We had a rather unique position because we were in the queue for AESO (Alberta Electric System Operator), when the transmission line from Pincher Creek to Lethbridge was completed,” said Stewart Duncan, president and CEO of AWEC. “We were approached by several companies, but Mainstream complemented our company. They have the technical and financial ability, while we have the necessary contacts in Alberta to move the project forward to the development stage.”

The deal also marks the beginning of Mainstream’s entry into the Canadian wind power market.

“We identify local partners with great projects and they leverage from our global strength in areas such as project finance, construction and procurement, so that together we can deliver projects faster and more cost-effectively,” said Mainstream’s CEO, Eddie O’Connor.

The company’s decision to partner with AWEC was based on the province having some of the best wind sites for power generation anywhere in onshore North America and that wind energy can be sold directly into a pool.

“Getting connected to the transmission system can be a major obstacle for new wind generation in Alberta,” said Sherra Zulerons, Mainstream’s country manager for Canada.

“All of our projects have already obtained, or are in the process of obtaining grid connection agreements. This is a major plus.”

Construction will be undertaken in three parts, which include the Oldman River Phase 2, Windy Point and Waterton projects.

“Phase one of the Oldman River project built two wind turbines with a total of 3.6 MW, which were primarily installed as test turbines,” explained Duncan.

“The results of the test were satisfactory, with the wind and the turbines performing as expected.”

Mainstream senior development manager Steven Xuereb said phase two of the $120 million Oldman River is in the design phase.

“We are looking at 20-23 wind turbines with a total of 46 MW, but we have not selected a technology yet,” he said.

“We are considering various suppliers at this point.”

Construction is scheduled to begin in the fall of 2009, with turbine delivery in the Spring of 2010 and the completion of construction in September 2010.

In total, the Oldman River project will have a production capacity of 50.4 MW, which is enough electricity for more than 15,000 homes.

The Windy point project is in the preliminary study phase, which includes wind and environmental studies.

Construction of the project, which will have a maximum of 30 turbines, is scheduled to begin in late 2010 or early 2011. Once built, this $160 million 62 MW project could have the potential to produce electricity for about 19,000 homes.

The Wateron Colony project is expected to support up to a 300 MW wind park with construction taking place between 2013-2014.

Duncan said the timing is dependent on an AESO assessment of the demand and potential supply of electricity in Alberta.

“Demand for electricity in the area is growing, while fossil fuel generating stations are nearing the end of their life and will require decommissioning or refurbishment,” he said.

A recent forecast by AESO indicated that Alberta will need an additional 5,000 MW of generation by 2017.

Under the terms of the agreement, Mainstream holds an 80 per cent share of the joint venture, with AWEC taking a 20 per stake.

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