Winding down

Once, not so very long ago, Yves Gagnon, New Brunswick’s acknowledged expert on wind energy, stuck close to home as he sang the praises of an emerging industry that he believed had the potential to transform economic development in this otherwise decidedly sleepy corner of the country. These days, the Universite de Moncton professor and K.C. Irving Chair in Sustainable Development is more apt to circulate in the outer regions of the Pacific Rim where he may find a more welcoming ear for his brand of messaging. For, on this November night, from a conference room in Japan, where he is moderating a series of meetings, he offers what can only be described as a lament for his home and native province.

“The Big Wind strategy for New Brunswick was based on a study by Danish consultants, EA Energy Analysis,” he recounts of the hoopla that attended former premier Shawn Graham’s 2006 vow to build 300 megawatts of installed capacity by 2016. “This strategy relied on electricity market developments in the United States, and having a Maritime approach to grid balancing.”

In other words, he says, the strategy had to be implemented when the iron was hot, and when long-term contracts could have been signed. But, “with the presence of cheap electricity, generated from shale gas, in the northeast U.S., American markets are now not possible. This was a missed opportunity for New Brunswick and the momentum is now gone.”

Indeed, as the New Brunswick government prepares to release its blueprint for oil and gas development in the province, the future of wind power in what was once described—and not just by Gagnon—as one of the world’s more promising jurisdictions for the renewable energy resource appears increasingly hazy. Although the province has nearly fulfilled Graham’s lofty commitment (it currently possesses a total of 294 MW at three facilities), there are no new plans to dramatically increase the load.

That’s not to say the current government of David Alward has turned its back to the breeze altogether. It is to say that his officials have adopted a more strategic and less transformative approach to the growth of its entire energy portfolio—including wind and other renewables, such as biomass and solar. Adds Gagnon: “New Brunswick is not active in tidal power; the Province has, however, identified small hydro as a potential source of renewable energy that could be developed in community-based projects.”

Or, as the government’s 10-year plan makes clear, “NB Power currently sources 28 per cent of its in-province electricity demand from wind, biomass and hydro resources. The Province will increase its commitment to pursue renewable energy by creating a Renewable Portfolio Standard requiring NB Power to ensure that, by 2020, 40 per cent of its in-province electricity sales are provided from renewable energy.”

In all of this, the Province insists, wind will play a role. But how big or consistent is not entirely clear. And the policy language remains almost non-committal. “The intermittent nature of wind energy requires utilities to provide load balancing using other forms of generation,” the strategy notes. “An additional 208 MW of wind generation is within our regional balancing area, which includes Prince Edward Island and northern Maine . . . For a relatively small power system (with seasonal loads that drop below 1000 MW), New Brunswick has one of North America’s highest proportions of wind generation capacity on its system.”

The bottom line, the report says, “This comes with challenges and costs. At times when generation is exceeding in-province demand, excess generation is often sold at prices lower than the contracted price for wind. Even when NB Power is able to utilize wind generation in-province, there are sometimes missed opportunities to purchase energy from outside sources at a lower cost . . . Wind energy has many benefits and will continue to be integrated in the New Brunswick balancing area, but in measured and manageable stages.”

Gagnon points out that part of the plan is to increase electricity generation from renewable sources through small, community-based projects. But, he adds, these will not come at the expense of wind whose real enemies in New Brunswick have been the tides of circumstance and time, itself. “We see two main reasons, and the first—the availability of cheap electricity in the U.S., which is being generated by shale gas—is worth repeating,” he says. “The other one is an oversupply of power that which will be accentuated by Point Lepreau (nuclear generating station) going on-line . . . Interestingly, this plant is not only a barrier to renewable energy development in N.B., it is also a barrier for the utilization of indigenous, low-cost shale gas for electricity generation in the province.”

As for the future of wind in the province, the true measure of what’s been lost can be appreciated in advice Gagnon, himself, gave Graham’s Liberal government in 2010, the year it lost office. In a report, he wrote, “The profits generated by a 100 megawatt wind farm can reach $200 million over the 25-year life cycle of the project. Furthermore, since these estimates do not take into consideration eventual revenues from the trading of carbon credits, the profits could be much higher once carbon markets are introduced into the economy . . . Extrapolating the results from a 100 megawatt wind farm to a total installed wind energy capacity of 4,000 megawatts in New Brunswick indicates that benefits could be in the order of $300 million per year or a total of $7 billion over 25 years. A Big Wind energy strategy could be an alternative (to the proposed, then aborted, sale of NB Power).”

In fact, there are few signs, elsewhere, that the era of Big Wind is waning. According to the Canadian Wind Energy Association, 2011 (the last year for which statistics are publicly available) was a banner year for the industry. The country managed to bring online 1,267 MW of new wind power, making it ninth in the world for overall cumulative installed capacity. Meanwhile, every 1,000 MW of new wind energy drives $2.5 billion in investments.

Even Industry Canada, never loquacious at the best of times, declared last year, “The future of wind energy development in Canada is promising and is expected to expand significantly over the coming years. This represents an excellent opportunity for Canadian businesses to develop and commercialize new and competitive technologies, to manufacture products and offer services in support of a growing industry which would ensure Canada’s place in the renewable energy supply and value chain.”

New Brunswick may yet acquaint itself with its dream of Big Wind, but the effort might well lead to a rude awakening. “The wind energy manufacturing sector is living major changes, with the entrance of Chinese suppliers who are very aggressive in terms of prices and financing for the purchase of their products,” Gagnon says.

Still, as David Alward grapples with his perfect storm of deep deficits and debt, malingering industries, moribund economic performance, an aging and dwindling population, now may not be the best time to utterly reform the province’s energy portfolio. Under the circumstances, oil and gas—especially shale deposits—are looking comfortingly promising.

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