Wind power: Taking energy from thin air

By RICHARD BLOOM and ANDREW WILLIS
Thursday, May 26, 2005

John Douglas's phone is ringing off the hook with people desperately trying to give him money.

No, he doesn't sell iPods or real estate. He builds wind farms.

"This industry has come a long way. It's not just ponytails and environmentalists, the suits have shown up . . . there's more capital than deals," said Mr. Douglas, co-founder and chief executive of Toronto-based Ventus Energy Inc., who previously held senior posts at investment banks Canaccord Capital Inc. and Sprott Securities Inc.

"The industry has evolved very, very quickly."

Quickly is an understatement as wind power is among the world's fastest growing energy sources.

In 2000, fewer than 150 megawatts of wind power capacity existed in Canada. Today, there are wind farms from Prince Edward Island to Yukon churning out 444 megawatts. By the year's end that figure will nearly double to nearly 820 megawatts, according to the Canadian Wind Energy Association.

By 2010, that figure is expected to sit well above 5,000 megawatts, thanks to provincial and federal incentives to build clean, renewable energy-generation facilities.

"Two thousand and five is the year that wind begins to go mainstream," stated Robert Hornung, CWEA's president, saying there are deals in place to add another 1,600 megawatts to provincial energy grids in the near future -- the bulk of which will be in Quebec.

"The financing is in place, all that's needed is the construction," Mr. Hornung said.

While growing exponentially, wind power makes up only a tiny fraction -- 0.2 per cent -- of total electricity production in this country, far behind hydroelectric generation at 61 per cent and coal-based production at 18 per cent, CWEA data show. By 2010, the production pie will shift to show wind power at 2 per cent.

Since wind is a product of differences in temperature and of differences in elevation, wind power has enormous potential in Canada because of our long coastlines, large pockets of water in land and sprawling mountain ranges. In turn, our wind power generation could be dramatically higher, Mr. Hornung said. Denmark, for example, sources more than 20 per cent of its electricity from wind while Germany sits at about 7 per cent.

"Canada could very well have the best wind resource in the world . . . much better than many European countries that are well ahead of us in terms of wind energy development," Mr. Hornung said.

Brascan Corp., one of the largest private-sector power players, expects wind to account for up to 10 per cent of its generating capacity within a decade. A unit called Superior Wind Energy is developing three Ontario sites, each of which will feature about 60 windmills.

Brascan plans to blend this power production, which only kicks in when the breezes are blowing, with the electricity flowing from its 116 hydroelectric plants, which can be turned on and off, depending on demand. Harry Goldgut, head of Brascan's power operations, says governments and utilities are moving toward a regulatory regime that features the long-term pricing agreements needed to justify up-front investments in wind farms

Brascan isn't alone. Big energy companies such as TransAlta Corp., TransCanada Corp., Suncor Energy Inc. and Enbridge Inc. are also getting into the wind game.

Mr. Douglas, who recently attended a wind power conference in Denver, said that judging by investor interest, he doesn't expect enthusiasm surrounding the industry to abate any time soon. "We had breakfast, lunch and dinner with all this capital in Denver. I was exhausted when I got back.

However, there's growing local opposition to the idea of windmills stretching as far as the eye can see.

Superior plans to put more than 60 towers and turbines near the Ontario resort towns of Collingwood and Blue Mountain. A group of residents known as the Blue Highlands Citizens Coalition is lobbying against the development, in part with a website that states: "Wind is a renewable resource . . . our Niagara escarpment landscape isn't."

"Obviously, we'll work with local groups," Mr. Goldgut said.

'Wind energy is the lowest cost, completely sustainable energy form there is.'

DAN MCGUIRE CEO OF THE AMERICAN CORN GROWERS ASSOCIATION