WIND ENERGY S TUDY IN B RITISH COLUMBIA
Final Report
Summer 2002
Port Hardy Area – Photomontage – Helimax Energy, inc
Presented To
LIVING OCEANS SOCIETY
TIDES CANADA FOUNDATION
135 1st Street, PO Box 320,
Sointula, B.C. V0N 3E0
680 - 220 Cambie Street,
Vancouver, B.C. V6B 2M9
In Partnership With
GREENPEACE
1726 Commercial Dr.
Vancouver, B.C. V5N 4A3
By
HELIMAX ENERGY INC
5215 Berri Street, Suite 300,
Montreal, QC H2J 2S4
T 514 272-2175 F 514 272-0410
www.helimax.com
TABLE OF C ONTENTS
List of Figures and Tables ________________________________________________________ ii
Abbreviations and Acronyms ______________________________________________________ ii
Glossary _______________________________________________________________________iii
Presentation of Contributors to the Study ___________________________________________ v
Acknowledgements ______________________________________________________________ v
Key Findings ___________________________________________________________________vi
Principaux Résultats ____________________________________________________________ vii
Executive Summary ____________________________________________________________viii
Sommaire exécutif_______________________________________________________________ix
Objective, Purposes of the Study and Deliverables ____________________________________ 1
I. Wind Energy Overview_________________________________________________________ 4
1.1. Wind Energy Worldwide ____________________________________________________ 4
1.2. Wind Energy in the NAFTA Market __________________________________________ 5
1.3. Wind Energy in British Columbia ____________________________________________ 6
II. Technically Viable Wind Energy Potential ________________________________________ 7
III. Marketable Wind Energy Potential ____________________________________________ 10
IV. Economically Viable Wind Energy Potential _____________________________________ 13
V. Social and Economic Benefits of Wind Energy____________________________________ 17
5.1. Wind Industry Context ____________________________________________________ 17
5.2. Job Creation and Other Benefits ____________________________________________ 18
VI. Potential Adverse Effects of Wind Energy and Mitigation Measures_________________ 21
References ____________________________________________________________________ 23
i
LIST OF F IGURES AND TABLES
Figure 1: Methodology ____________________________________________________________ 3
Figure 2: Annual & Cumulative Wind Energy Development in the World (1997-2006) __________ 4
Figure 3: Forecast for Annual & Cumulative Wind Energy in the NAFTA Market (2002-2011) ___ 5
Figure 4: Location of the Pre-Selected Areas ___________________________________________ 9
Figure 5: Projected Trends in Cost of Electricity from Wind & Gas in British Columbia –
ScenarioA _____________________________________________________________________ 15
Figure 6: Projected Trends in Cost of Electricity from Wind & Gas in British Columbia –
ScenarioB _____________________________________________________________________ 16
Figure 7: Total Job Creation in the Wind Energy Sector _________________________________ 19
Table 1: Key Components of the Study _______________________________________________ 2
Table 2: Characteristics of the Selected Sites __________________________________________ 12
ABBREVIATIONS AND ACRONYMS
AWEA: American Wind Energy Association
BC Hydro: the Crown Electric Utility in British Columbia
Btu: British thermal unit
CanWEA: Canadian Wind Energy Association
CO2 e: Carbon Dioxide Equivalent
GWh: Gigawatt -hour
IEA: International Energy Agency
IPP: Independent Power Producer
kWh: Kilowatt-hour
m: Metre
MMBtu: One million Btu
MW: Megawatt
NAFTA: North American Free Trade Agreement
WPPI: Wind Power Production Incentive
ii
GLOSSARY
Avoided Cost:
The cost a utility would incur to generate the next increment of
electric capacity using its own resources.
Carbon dioxide equivalent:
A metric measure used to compare the emissions from various
greenhouse gases based upon their global warming potential (GWP).
The carbon dioxide equivalent for a gas is derived by multiplying
the tons of the gas by the associated GWP.
Cents/kWh:
Cost of produced electricity in term of (Canadian) cents per kWh
produced.
Combined cycle gas firedplant:
A facility that uses a combination of natural gas and steam to
generate electricity.
Gigawatt-hour (GWh):
One GWh is equal to 1,000,000 kilowatt-hour.
10 GWh is approximately the annual amount used by 1,000 homes.
Global Warming Potential
(GWP):
The index used to translate the level of emissions of various gases
into a common measure in order to compare the relative radiative
forcing of different gases without directly calculating the changes in
atmospheric concentrations.
(GWR (CO2 ) = 1; GWR (CH4 ) = 21; N2 O = 310; …)
Greenhouse gas:
Gases in the atmosphere, such as CO2, , CH4 , N2 O, that cause heat to
increase on earth.
Gwh/yr:
Electricity produced in term of Gigawatt-hour per year.
HMData:
Helimax’ in-house software allowing meteorological data quality
control.
Hydroelectric Power:
The production of electricity through the power of falling water.
Job-year/MW:
Number of job-year created for the installation and/or the operation
and maintenance and/or the manufacturing of one MW of wind
energy capacity.
iii
Job-year:
A unit to evaluate job creation, which means that a job is available
for one person for one year.
Kilowatt (kW):
1,000 watts.
Kilowatt-hour (kWh):
A common measure of electricity, equal to 1,000 watts working for
one hour.
Kyoto Protocol:
An international agreement under the United Nations Framework
Convention on Climate Change to reduce worldwide emissions of
greenhouse gases. If ratified and put into force, individual countries
have committed to reduce their greenhouse gas emissions by a
specified amount.
m/s:
Speed measurement (Metre per second).
Megawatt (MW):
One million watts.
Net section surface:
The surface of the land allocated to the wind energy project after
exclusion of water surface, tides, complex landscape…
O&M:
Operation and Maintenance.
Transmission Lines:
High voltage electric wires, usually above 60 kilovolts, that carry
electricity from the generation source over long distances to
substations.
Watt:
A measurement of electrical power.
Wind turbine:
A machine, with blades on an axle, that turns and generates
electricity when wind flows past the blades.
iv
PRESENTATION OF CONTRIBUTORS TO THE STUDY
Living Oceans Society
The Living Oceans Society is a non-profit research and public education organization committed to
conserving marine biological diversity to ensure a healthy ocean and healthy coastal communities.
Tides Canada
Tides Canada Foundation is Canada's first national public foundation with offices in Vancouver and
Toronto. It is dedicated to helping donors give wisely to innovative charities that provide
solutions to social justice and environmental problems.
Greenpeace
Greenpeace was founded in Vancouver in 1971. It now operates across Canada and around the
world. Greenpeace campaigns to protect the natural world from environmental and nuclear threats.
Helimax Energy Inc.
Canada-based Helimax Energy Inc. specializes in energy technologies and projects that are
consistent with the principles of sustainable development. Helimax acts particularly as an initiator
and catalyst for national and international wind project development.
In this regard, Helimax has developed advanced expertise in the field of meteorology and wind
turbine assembly plant configuration as well as considerable practical, logistical and organizational
experience that has made it possible to develop the most up-to-date meteorological tools, including
HMData. These unique tools are exclusive to Helimax and allow our Environment, Meteorology
and Wind Plant Configuration Divisions to provide specialized services in the field of meteorology,
as it relates to wind power, mainly ‘Prospecting and Wind Monitoring’, ‘Technical Analysis’ and
‘Energy Production Assessment’, as well as other specialized activities related to wind project
development.
Helimax and its team have completed over one hundred energy projects and studies, in most of the
Canadian provinces and abroad (including Egypt, Morocco, Mauritania, Senegal and Tunisia). Over
half of these fell directly into the wind energy category, including the 100 MW ‘Le Nordais’ Project
in Quebec.
ACKNOWLEDGEMENTS
Helimax would like to thank the Alternative & Green Energy Department of BC Hydro
for providing general comments on the pre-selected study areas.
v
KEY F INDINGS
v The Port Hardy, Port Alice and Prince Rupert areas have a significant theoretical wind energy
potential of approximately 4,800 MW, not taking into account aspects relating to vegetation
cover, land use, and the proximity of roads and the provincial electrical grid.
v On the basis of on-site visits, 1,200 MW of wind energy could be in operation by 2011, given
the proximity of roads and the electrical grid, and the possibility of marketing the energy
produced. The achievement of this potential would enable:
§
Annual production of approximately 2,800 GWh, that is, the average annual consumption of
more than 100,000 households.
§
Investment of approximately 1 billion dollars (2002$) in British Columbia, enabling the
creation of 8,000 job-years resulting from the installation, operation and maintenance of the
wind turbines. Nearly 50,000 job-years would potentially be created if a wind turbine
assembly plant, along with a cluster of suppliers, were to set up in the province.
§
A substantial reduction in atmospheric emissions that would otherwise result from
conventional energy sources. In particular, the reduction of about 40 million tons of CO 2 e
over a period of 25 years (that is, the service life of the wind turbines), in comparison with
combined cycle gas-fired plant.
v An economic viability assessment shows that the cost of the electricity produced by the wind
energy projects configured on the sites providing a high quality supply of wind energy is, at the
present time, slightly more than the future cost of electricity production in British Columbia
(avoided cost) when the latter is set at 6.3 cents/kWh.
v In addition to the creation of jobs and the reduction of greenhouse gases and other pollutants,
wind energy offers many advantages, including:
- Complementarity with agriculture, forestry and tourism;
- Diversification of the energy portfolio;
- The ability to foresee long-term production costs, since no fuel is required;
- Excellent complementarity with hydroelectric power;
- The payment of royalties for land use;
- A sense of ownership and pride in the host communities in relation to the energy projects.
vi
PRINCIPAUX RÉSULTATS
v Les régions de Port Hardy, Port Alice et Prince Rupert disposent d’un potentiel éolien théorique
important d’environ 4,800 MW, abstraction faite des aspects ayant trait au couvert végétal, à
l’occupation des sols et à la proximité des routes et du réseau électrique provincial.
v Moyennant des visites sur site, une capacité de 1,200 MW d’énergie éolienne pourrait être
confirmée pour être mise en chantier d’ici 2011, étant donné la proximité des routes et du réseau
électrique provincial et la possibilité de commercialiser l’énergie produite. La réalisation de ce
potentiel permettrait :
§
Une production annuelle d’environ 2,800 GWh , soit la consommation annuelle moyenne de
plus de 100,000 ménages;
§
Des investissements d’environ 1 milliard de dollars ($2002) en Colombie-britannique et la
création de 8,000 emplois-année découlant de l’installation, de l’opération et de l’entretien des
éoliennes. Aussi, près de 50,000 emplois-année seraient potentiellement créés dans le cas où une
usine d’assemblage d’éoliennes accompagnée d’une grappe de fournisseurs s’établissait dans la
province;
§
Une réduction considérable des émissions atmosphériques en comparaison des sources d’énergie
conventionnelle. En particulier, la réduction d’environ 40 millions de tonnes de CO 2 e sur une
période de 25 ans (soit la durée de vie des éoliennes), en comparaison avec le gaz naturel à cycle
combiné.
v L’évaluation de la viabilité économique montre que le coût de l’électricité, produite à partir de
parcs éoliens réalisés sur les sites offrant un gisement éolien de qualité supérieure, dépasse
aujourd’hui très légèrement le futur coût de production de l’électricité en Colombie-britannique
(coût évité) lorsque ce dernier est établi à 6.3 cents/kWh.
v Hormis la création d’emplois, la réduction des gaz à effet de serre et des autres polluants, la
filière éolienne offre de nombreux avantages dont :
-
Une complémentarité avec l’agriculture, la foresterie et le tourisme;
-
Une diversification du portefeuille énergétique;
-
Prévisibilité des coûts de production à long terme, aucun combustible n’étant requis;
-
Une excellente complémentarité avec l’énergie hydroélectrique;
-
Le paiement de royautés pour l’utilisation des terrains;
-
Un sentiment d’appropriation et de fierté des communautés hôtes par rapport aux parcs
éoliens.
vii
EXECUTIVE SUMMARY
At the end of 2001, installed wind energy capacity worldwide reached 25,000 MW and it could
reach approximately 80,000 MW in 2006. In the NAFTA market, it is estimated that this installed
capacity could reach approximately 30,000 MW in 2011, including 23,000 MW in the United States.
In Canada, despite the considerable wind energy potential, the current cumulative capacity does not
exceed 214 MW. BTM Consult1 anticipates that in 2006, the total installed capacity will not exceed
1,000 MW, and Helimax predicts that this capacity will reach approximately 5,000 MW in 2011.
In British Columbia, BC Hydro is gradually undertaking wind energy development and has put in
operation at least 15 wind monitoring towers throughout the province in order to better determine its
wind energy potential.
In order to contribute to promoting wind energy in British Columbia, this study examines the wind
energy potential of certain pre-selected areas, namely Port Alice, Port Hardy (Northern Vancouver
Island) and Prince Rupert in the Northern coast area.
Based on limited available data, Helimax estimates that the areas listed have significant technically
viable wind energy potential of about 4,800 MW, not considering aspects relating to vegetation
cover and land use. There are eight sites, with an aggregate capacity of more than 1,200 MW of
wind energy, where projects can be installed before 2011, given their proximity to roads and to the
provincial electricity grid, and the possibility of marketing the energy produced. Furthermore, wind
energy potential of more than 3,600 MW is assumed to be available on the two islands of Banks and
Porcher. Although these two islands are not at this time connected by roads or to the network, they
represent an interesting wind energy potential that could be exploited in the long term.
In addition, the sites totaling 1,200 MW have been assessed to determine their economic viability. In
this regard, Helimax roughly estimates that the gaps between the avoided cost of production and the
selling price for electricity generated by wind at these sites, at windspeeds of 6, 7 and 8 m/s, are
respectively: (i) 5.0, 2.6 and 1.3 ¢/kWh, for an avoided cost of 5.0 ¢/kWh, and (ii) 3.7, 1.3 and 0
¢/kWh, for an avoided cost of 6.3 ¢/kWh.
Furthermore, the implementation of a strategy for the development of wind energy in British
Columbia would potentially make it possible to create 8,000 job-years. In the case where a wind
turbine assembly plant would set up in the province, almost 50,000 job-years would potentially be
created.
1
BTM Consult ApS, is a Danish independent consultancy company specialized in services regarding renewable energy.
viii
SOMMAIRE EXÉCUTIF
À la fin de l’année 2001, la capacité d’énergie éolienne installée dans le monde atteignait 25,000
MW et pourrait atteindre environ 80,000 MW en 2006. Dans le marché de l’Amérique du Nord
(zone de l’Accord de libre-échange nord Américain - ALENA), on estime que cette capacité
installée pourrait atteindre environ 30,000 MW en 2011 dont 23,000 MW aux États Unis.
Au Canada, en dépit du potentiel éolien considérable, la capacité présentement cumulée n’est que de
214 MW. BTM Consult2 s’attend à ce qu’en 2006, la capacité installée totale ne dépasse pas 1,000
MW et Helimax prévoit que cette capacité atteindra environ 5,000 MW en 2011.
En Colombie-britannique, BC Hydro s’engage progressivement dans le développement de l’énergie
éolienne et a mis en opération au moins 15 mâts de mesures de vent à travers la province pour mieux
déterminer son potentiel éolien.
Afin de contribuer à promouvoir la filière éolienne en Colombie-britannique, la présente étude
examine le potentiel éolien de certaines régions pré-sélectionnées, à savoir Port Alice, Port Hardy
(Nord de l’île de Vancouver) et Prince Rupert.
En partant des données limitées disponibles, Hélimax estime que les régions citées disposent d’un
potentiel technique important d’environ 4,800 MW, abstraction faite des aspects ayant trait au
couvert végétal et à l’occupation des sols. Il ressort aussi que huit sites, offrant une capacité de plus
de 1,200 MW d’énergie éolienne, peuvent être mis en chantier d’ici 2011, étant donné leur
proximité des routes et du réseau électrique provincial et la possibilité de commercialiser l’énergie
produite. En outre, un potentiel éolien de plus de 3,600 MW est, à priori, disponible dans les deux
îles de Banks et Porcher. Bien qu’actuellement ces deux îles sont non liées par des routes et non
interconnectées au réseau électrique, elles représentent un intéressant potentiel éolien exploitable à
long terme.
Par ailleurs, les sites totalisant 1,200 MW ont été évalués au plan de leur viabilité économique. A cet
égard, Hélimax estime que les manques à gagner entre le coût évité de la production et le prix de
vente de l’électricité de source éolienne sur ces sites, en faisant varier la vitesse du vent de 6, 7 et 8
m/s, sont respectivement de (i) 5.0, 2.6 et 1.3 ¢/kWh, pour un coût évité de 5.0 ¢/kWh, et (ii) 3.7,
1.3 et 0 ¢/kWh, pour un coût évité de 6.3 ¢/kWh.
D’autre part, la mise en place d’une stratégie de déploiement de l’énergie éolienne en Colombiebritannique pourrait permettre la création de 8,000 emplois-année. Dans le cas où une usine de
fabrication d’éoliennes s’établissait dans la province, presque 50,000 emplois-année seraient
potentiellement créés.
2
BTM Consult ApS, est une firme danoise de consultants indépendants, spécialisés dans les services ayant trait à
l’énergie éolienne.
ix
OBJECTIVE, PURPOSES OF THE STUDY AND
DELIVERABLES
The study’s overall objective is to contribute to the promotion of wind energy while enhancing job
creation and economic development in the following pre-selected3 areas of British Columbia:
•
The Port Hardy area in the Northern end of Vancouver Island,
•
The Port Alice area in the Northern end of Vancouver Island,
•
The Prince Rupert area in the North-coast of British Columbia.
The specific purposes of the present study can be summarized as follows:
•
Assess the economically viable on-land wind energy potential for the pre-selected areas over the
next decade, taking into consideration interconnection limitations;
•
Evaluate job creation and economic development resulting from the development of the
estimated economically viable wind energy potential in the pre-selected areas.
Six specific deliverables resulting from this study should allow the First Nations, the public,
politicians, business leaders, trade unionists, environmentalists and others to better appreciate the
potential and limitations of wind energy development in the pre-selected areas. These deliverables
are presented in chapters I to VI and include:
§
Chapter I:
Wind energy overview worldwide and more specifically in North America;
§
Chapter II:
Technically viable wind energy potential in the pre-selected areas;
§
Chapter III:
Marketable wind energy potential in the selected sites;
§
Chapter IV:
Economically viable wind energy potential in the selected sites;
§
Chapter V:
Social and economic benefits in British Columbia resulting from wind
energy development;
§
Chapter VI:
Potential adverse effects of wind energy development and recommended
mitigation measures.
The Helimax team developed the following methodology, summarized in Figure 1 and Table 1, in
order to provide these deliverables:
3
These areas were chosen by the clients because these communities are experiencing an economic downturn and could
benefit the most from an assessment of alternatives to industrial logging and offshore oil and gas.
1
Table 1: Key Components of the Study
• Technically viable wind
energy potential
-
• Marketable wind energy
potential
-
• Economically viable wind
energy potential
-
• Wind industry
manufacturing potential
-
-
• Job creation potential and
other economic benefits
-
• Possible adverse effects of
wind energy development and
mitigation measures
-
Identify the windiest areas based on available wind map of the
province and other readily available wind data;
From the identified windiest areas, select the promising sites,
taking into consideration topography and excluded areas.
Estimate the potential for installed wind capacity in the
selected sites using a set of assumptions;
Identify access roads and electric transmission lines;
Identify the transmission constraints limiting wind energy
from being transmitted from the selected sites to the local
(British Columbia), Canadian (through Alberta) and US
markets.
Estimate the potential energy production and the requested
selling price for wind energy produced by the proposed
projects. This price is estimated based on the characteristics of
the selected sites and the internal rate of return requested by
the IPP (independent power production) industry;
Assess the actual avoided cost for electricity generation in
British Columbia, based on available information;
Plot the economically viable wind energy potential over the
period from 2002 to 2011.
Outline the present situation in North America in terms of
wind turbine manufacturing (supply vs. demand);
Outline the key decision-making factors to attract wind turbine
and components manufacturers (economic environment,
technical skills, local market, etc.);
Comment on the potential for the development of a
manufacturing industry in British Columbia, taking into
account the present situation in North America and key
decision-making factors.
Estimate potential job creation and economic benefits resulting
from the economically viable wind energy potential, based on
updated ratios of job per installed capacity in other areas of the
world (such as Denmark).
Discuss the generic adverse effects of wind energy;
Provide ways to mitigate the generic adverse effects of wind
energy.
2
Figure 1: Methodology
Wind Energy Study in British Columbia
INPUTS
Job creation and economic
considerations in British Columbia
•
•
•
•
BC Hydro Wind Map
candidate protection and deferral areas
Topographic data
Installed capacity ratio (MW/Km2 )
•
Distance to roads and electricity grid
access
Transmission system characteristics
•
•
•
•
•
•
•
•
•
BC Hydro/Helimax discussion
BC Hydro avoided cost
Progress
in
wind
turbine
technology
Wind resources (6-8 m/s)
Helimax financial model
Market conditions (Supply/Demand)
Key decision-making factors
Job creation ratio
PROCESS
OUTPUTS
The present study areas are:
§ the Prince Rupert area,
§ the Port Hardy area,
§ and the Port Alice area.
Pre-selection of areas by the client
Technically viable sites
(Km2 , MW)
Meteorological and
technical evaluation by
Helimax
Marketable Wind Potential (MW)
•
Financial evaluation by Helimax
•
•
Benefits evaluation by Helimax
•
•
•
Economically viable wind energy projects to
be implemented from 2003-2011
Estimate of the gaps that must be bridged for
wind energy projects to be economically
viable.
Opportunities for Wind Energy Industry in British
Columbia
Job creation (construction, operation) in British
Columbia
Job creation (manufacturing) in British Columbia
Other benefits
3
I. WIND ENERGY OVERVIEW
Highlights
Ø At the end of 2001, installed wind energy capacity worldwide was 25,000 MW and it is
expected to reach 80,000 MW around 2006.
Ø During the last five years, wind energy capacity installed annually has expanded at the
compound rate of 40%, and should continue to increase over the next five years at the rate of
16%.
Ø In the NAFTA market, Helimax anticipates that the cumulative capacity in 2011 would be
around 30,000 MW, including approximately 23,000 MW in the USA, 5,000 in Canada and
2,500 in Mexico.
Ø 710 MW are being developed in British Columbia, including a demonstration project of 10 MW
(2003), promoted by BC Hydro, and an offshore project of 700 MW proposed by (2004-2008).
1.1. Wind Energy Worldwide
At the end of 2001, the cumulative installed wind energy capacity throughout the world reached
24,927 MW (55,960 turbines), of which 6,824 MW were installed in 2001, representing an
astonishing compound rate of wind energy development of 40% in terms of capacity installed
annually during the last five years. The average rating of the generators installed, which was 800
kW in 2000, reached 915 kW in 2001. According to the short-term projections of BTM Consult
ApS, wind energy is expected to continue to develop at the rate of 16.2% annually over the next five
years.
20,000
100,000
15,000
80,000
10,000
Forecast Growth: 16%
60,000
Actual Growth: 40%
40,000
5,000
20,000
0
0
Cumulative Capacity
(MW)
New Installed
Capacity (MW)
Figure 2: Annual & Cumulative Wind Energy Development in the World (1997-2006)4
New
Installed
Capacity
(MW)
Cumulative
Capacity
(MW)
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Year
4
Source: BTM ApS – March 2002.
4
1.2. Wind Energy in the NAFTA Market
In the United States, the cumulative capacity reached 4,245 MW at the end of 2001. At the end of
2002, approximately 1,200 MW of additional wind energy capacity should be installed, and the
installation of 2,500 MW is expected in 2003, that is, double the amount. In 2011, Helimax
anticipates that cumulative capacity in the USA will reach around 23,000 MW.
In Canada, the current cumulative capacity is only 214 MW and the Canadian Wind Energy
Association (CanWEA) is aiming for the installation of 10,000 MW around 2010 (10x10 Target).
BTM Consult notes that CanWEA’s target is optimistic given the present situation. BTM limits its
projections to the addition of 1000 MW by the year 2006. Helimax believes that at least 5,000 MW
will be installed by 2011.
Although the capacity currently installed in Mexico is very low (3 MW), it is anticipated that
Mexico will gradually develop its installed wind energy capacity, considering that it has a huge
wind energy potential (according to BTM Consult ApS, the theoretical potential is 4,000 MW).
However, in this market, Helimax anticipates that by about 2011, more than 2,500 MW will have
been installed.
3,000
35,000
2,500
30,000
25,000
2,000
20,000
1,500
15,000
1,000
10,000
500
5,000
0
Cumulative Installed Capacity in
NAFTA Market (MW)
New Installed Capacity (MW)
Figure 3: Forecast for Annual & Cumulative Wind Energy in the NAFTA Market (2002-2011)
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Years
USA
Canada
Mexico
Cumulative Installed Capacity (MW)
5
1.3. Wind Energy in British Columbia
The total electricity generation capacity of British Columbia, combining all sources, is
approximately 13,600 MW, of which 12,000 MW is earmarked for local consumption. With regard
to the development of renewable energy, BC Hydro has made a commitment to the development of
green energy, in particular wind energy. Currently, BC Hydro has installed a number of towers to
monitor wind speeds throughout the province (Alert Bay, Jordan Ridge, Port Alice, Port Alberni,
Mount Hays, Nemiah Valley, Dawson Creek, Merritt-Sugar Loaf, etc.). The number of monitoring
towers totaled 15 in March 2002.
At the present time, 710 MW of wind energy capacity are being developed in British Columbia.
This includes a 10 MW demonstration project, promoted by BC Hydro, which should be in service
starting in the middle of 2003. Secondly, an offshore project with a capacity of 700 MW is proposed
near the northeastern part of the island of Haida Gwaii; construction for this project is planned over
4 years, beginning in 2004.
6
II. TECHNICALLY VIABLE WIND ENERGY P OTENTIAL
Highlights
Ø The wind energy potential in the pre-selected areas amounts to 4,800 MW divided into 10
separate sites, as follows:
§
Three sites in the Prince Rupert area (300 km2 - 3,700 MW).
§
Six sites in the Port Alice area (34 km2 - 540 MW);
§
One site in the Port Hardy area (32 km2 - 570 MW).
Methodology
The three pre-selected areas, shown in Figure 4, have been thoroughly analyzed in order to select the
most technically5 suitable sites for wind energy projects within these areas, excluding candidate
protection and deferral areas6 , protected ecological reserves, recreational areas, and national and
provincial parks. The wind speed resource of each area was estimated using the BC Hydro Wind
Speed Map7 as well as the professional experience of the meteorologists at Helimax.
The
topography and land use features were assessed by screening all topographical maps on a scale of
1:50,000 covering these three pre-selected areas.
Finally, based on the professional judgment and experience of the professionals at Helimax,
particularly with feedback from the study of a large number of similar projects, the “net surface”
available for wind energy projects was estimated for the selected sites and converted into wind
energy potential by using technically viable power density factors (MW/km²).
Assumptions
At this point in the study, attention was focused on sites (i) that could house wind energy projects
with a capacity greater than 10 MW, (ii) in particular, vast expanses of land, excluding glacial areas
or those with tides. Furthermore, selection was limited to (iii) sites with wind speeds between 6-8
m/s at 65 m, and (iv) sites that are located outside of candidate protection and deferral areas.
Finally, (v) it is assumed that the ‘net surface’ will be entirely allocated to the wind energy projects
and that there are no limitations related to land use.
5
In this section, site selection is based on technical issues, without any consideration of economic aspects, such as
access and the need to build new infrastructures (roads, transmission lines, etc).
6
As identified on the Sierra Club Map ( http://www.sierraclub.ca/bc).
7
The wind speeds were estimated from the BC Hydro wind resource map, which was produced at a height of 65 m by
numerical modeling. This map is available on the BC Hydro Internet Web Site: www.bchydro.bc.ca.
7
Outcomes
At the conclusion of the analysis of the pre-selected-areas, the following ten sites, which are shown
on Figure 5, were selected:
§
Three sites in the Prince Rupert area totaling8 300 km2 and yielding approximately 3,700 MW,
of which the largest concentration, 2,800 MW, can be found around a single site on Banks
Island.
§
Six sites in the Port Alice area totaling 34 km2 and yielding approximately 540 MW, and
§
One site in the Port Hardy area totaling 32 km2 and yielding approximately 570 MW.
Limitations
It is important to underline that this analysis has been done with much care and has drawn on
Helimax’ extensive experience in wind energy project development. The second step, which is not
within the present study framework, would necessarily include on-site visits in order to take
particular consideration of land use issues and vegetation cover.
8
The actual portion of land occupied by wind turbines is approximately 1% of the total site surface.
8
Figure 4: Location of the Pre-Selected Areas
9
III. M ARKETABLE WIND ENERGY POTENTIAL
Highlights
Ø Eight sites in the pre-selected areas seem to offer marketable wind energy potential of more
than 1,200 MW.
Ø Though they have a huge potential of more than 3,600 MW, the remaining two sites on Banks
and Porcher Islands are located in non-accessible remote areas and should be reserved for
development in the long term.
Key Factors Considered
At the end of the previous section, it was estimated that the ten sites in the study areas could yield a
potential of approximately 4,800 MW, in terms of technically viable wind energy potential. In the
present section, the marketable wind energy potential in the selected sites must be evaluated with
regard to accessibility to roads and to the grid, as well as the capacity of the existing transmission
system to transport electricity to the local market or elsewhere, as outlined in Table 2.
Assumptions
At the present time, British Columbia’s power generation capacity is 13,600 MW9 , of which 1,600
MW is exported to Alberta and the USA10 . The electrical transmission system from British
Columbia to Alberta, and from British Columbia to the USA, can provide an interchange capacity of
3,400 MW11. Thus, additional capacities could be exported from British Columbia to Alberta or to
the USA.
On Vancouver Island (Port Alice and Port Hardy), it is assumed that no particular constraints hinder
the transmission of new electric capacities for local consumption12 , as the present energy demand of
the Island is 2,000 MW, of which less than 700 MW is generated on the Island. An additional
capacity of 500 MW is needed by 2010, to meet the growing energy demands of the Island13 .
Outcomes
It appears that 1,200 MW in electrical capacity could be injected into the network for marketing
purposes, as described below:
9
In 1998, BC Hydro System Power Supply comprised 89% Hydro, 5.7% IPPs, 5% Natural Gas and 0.1% Diesel.
Source: [15].
11
Source: BC Hydro Web Site [10].
12
The present electricity pricing framework for Green Energy Projects offers financial incentives for on-Island projects.
13
Source: BC Hydro Web Site.
10
10
§
Port Alice Sites (PA1 to PA6, 540 MW): These six sites are relatively close to road access (less
than 10 km) and transmission systems (less than 35 km).
§
Port Hardy Site (PH1, 570 MW): One large site east of Williams Lake, where there is access to
roads (less than 1 km) and to the grid (less than 35 km).
§
Prince Rupert – Kaien Island Site (PR1, 120 MW): 3 km south of the town of Prince Rupert,
near the electricity grid and roads.
The remaining sites are located in the Prince Rupert area (Banks Island – 2,780 MW and Porcher
Island – 780 MW). Regardless of their huge wind energy potential, those sites would need additional
investigation considering the limited transmission capacity going from Prince Rupert to the points of
consumption (Vancouver area). Study of the actual and planned electrical network would be
recommended to optimize the integration of large wind energy projection in the Prince Rupert area.
11
Table 2: Characteristics of the Selected Sites
Wind Speed (m/s)
Distance to
the Grid
Distance to Road
Fairly
complex
35 km
1 km
32
570
Complex
10 km
3 km
2
Complex
2 km
4 km
Complex
10 km
Fairly
complex
Areas
Site
Location
Landscape
Port Hardy
PH1
South of Quatsino Provincial Forest
PA1
Near Victoria Lake
PA2
between Neroutsos Inlet and Victoria Lake
PA3
Near Rumble Beach and Alice Lake
Port Alice
PA4
PA5
Near Neroutsos Inlet
PA6
South of Klaskino Inlet
PR1
Prince
Rupert
Near Nimpkish Lake
PR2
Kaien Island-Mount Hays
1,032
1,424
1,793
40
72
100
126
3
50
91
125
157
3 km
7
120
217
300
378
12 km
10 km
10
170
308
425
535
Complex
7 km
6 km
4
80
145
200
252
Complex
33 km
4 km
5
80
145
200
252
Fairly
complex
Near the Grid
2 km
7
120
217
300
378
Flat
No Grid on the
Island
130 km (and 2
bridges to build)
127
2,780
5,033
6,947
8,750
1,412
1,949
2,455
8,672
11,970
15,076
Banks Island
PR3
Installed Capacity
Net
6 (m/s) 7 (m/s) 8 (m/s)
(MW) 14
Section
Surface
Net Energy Output
Per site Per area
(km²)
(GWh/yr)
570
540
3,680
Flat
Porcher Island
Total
No Grid on the
Island
130 km (and 2
bridges to build)
35
780
232
Total
4,790
14
The Installed Capacity was estimated by multiplying a power density factors (MW/km²) by the Net Section Surface (km²). The power density factor depends on the
landscape features and goes down, as the landscape gets more complex.
12
IV. ECONOMICALLY VIABLE WIND ENERGY P OTENTIAL
Highlights
Ø Helimax estimates that the gaps between the avoided cost of electricity generation in British
Columbia and the selling price of wind energy for sites with mean speeds of 6 m/s, 7 m/s and
8 m/s are, respectively, about:
(i) 5.0, 2.6 and 1.3 cents per kWh, at a given avoided cost of 5.0 cents per kWh, and
(ii) 3.7, 1.3 and 0 cents per kWh, at a given avoided cost of 6.3 cents per kWh.
Key Factors Considered
The financial viability study of wind energy projects in British Columbia has taken into
consideration a certain number of key factors. These factors are:
§
The BC Hydro avoided cost (expressed as cents per kWh produced) which is the cost that BC
Hydro would incur to generate the next increment of electric capacity using its own resources
(in this case, it is the cost of combined cycle gas-fired plants, as it is the consensus in North
America),
§
The generic financial parameters of an IPP wind energy project,
§
The mean wind speed of the selected sites, and
§
The development of wind energy technology.
Assumptions
First of all, it is assumed that the growing requirements for electricity in British Columbia will be
met primarily by the addition of combined cycle gas-fired plants. Based on this assumption,
Helimax has developed two scenarios involving the avoided cost of gas. The first scenario, at 5.0
¢/kWh ($ 2002), is based on the long-term projections prepared by BC Hydro regarding the average
cost of combined cycle gas-fired plants throughout the province15. This cost of electricity assumes
that the average price for gas is about 3.00 US$/MMBtu in the long term run. The second scenario,
at 6.3 ¢/kWh ($ 2002), corresponds to the cost of production of combined cycle gas-fired plants,
based on a gas price reaching 3.50 US$/MMBtu, as of the date of this report. Helimax deems that
the projections at 5.0 ¢/kWh, are rather optimistic, and that, on the other hand, the cost at 6.3 ¢/kWh
reveals the risk associated with the fluctuation of long-term gas. Therefore, Helimax will retain
these two extreme values as the marginal cost of production, for the purposes of this study.
15
Source: Strategic consideration for a new British Columbia Energy Policy [15].
13
Secondly, Helimax used its financial model, “HM-Finance”, to calculate the selling price per kWh
for a wind energy project to be economically viable. This assessment is based on the following
assumptions: (i) a required rate of return on equity invested by an IPP of 15% before taxes, (ii) use
factors of 21%, 29% and 36% respectively for sites with mean wind speeds of 6 m/s, 7 m/s and
8 m/s, (iii) a constant reduction in the investment cost per installed MW of 1.5%16 per year (all in
constant dollars), due to progress in wind energy technology, (iv) an annual index rate of 1.5%
applied to electricity sales, and finally, (v) a set of representative values of the wind energy industry
and independent power production in Canada (financial assumptions, O & M expenses, etc.). Note
that the costs of wind energy shown in Figures 6 and 7 do not include any government subsidies.
Outcomes
Helimax estimates that the gaps between the avoided cost of production in British Columbia and the
selling price of wind energy for sites with mean wind speeds of 6 m/s, 7 m/s and 8 m/s are,
respectively, about (i) 5.0, 2.6 and 1.3 cents per kWh at a given avoided cost of 5.0 cents per kWh,
and (ii) 3.7, 1.3 and 0 cents per kWh, at a given avoided cost of 6.3 cents per kWh. The application
of Canada’s “Wind Power Production Incentive” (WPPI) recently announced by the Federal
Government makes it possible to reduce these gaps, taking into account WPPI limitations, by
approximately 0.7 cents but only for a limited amount of energy (a maximum of 300 MW per
province has initially been set17 ). It is clear, then, that for wind energy production to be
economically viable in British Columbia, additional measures must be put in place to bridge these
gaps. The development of greenhouse gas offsets constitutes one such measure. However, it is up to
the parties involved in the province of British Columbia to choose the various means that will be
used. In the long run, the implementation of these measures would make it possible to better assess
the environmental value of wind energy projects with regard to the reduction of greenhouse gas
emissions, as well as other environmental and social costs. In addition, this would pave the way for
the emergence of a promising wind energy industry in British Columbia.
16
Source: Although the relative average cost reduction based on predicted installed capacity cost established by ‘Wind
Force 10’ [21] is approximately 3%, Helimax retained a conservative rate of 1.5%.
17
Source : www.canren.gc.ca/wppi.
14
Figure 5: Projected Trends in Cost of Electricity from Wind18 & Gas in British Columbia – ScenarioA
SCENARIO A - Avoided Cost at 5.0 ¢ / kWh
12.00
(¢ per kWh - $ 2002)
10.00
8.00
6.00
4.00
BC Hydro Avoided Cost (BCHAC) - Scenario A
Wind Energy Rate ( for sites at 8m/s )
2.00
Wind Energy Rate ( for sites at 7m/s )
Wind Energy Rate ( for sites at 6m/s )
0.00
2002
18
2003
2004
2005
2006
2007
2008
2009
2010
2011
Excluding Canada's Wind Power Production Incentive (WPPI), Carbon Credit Revenues and others.
15
Figure 6: Projected Trends in Cost of Electricity from Wind19 & Gas in British Columbia – ScenarioB
SCENARIO B - Avoided Cost at 6.3 ¢ / kWh
12.00
(¢ per kWh - $ 2002)
10.00
8.00
6.00
4.00
BC Hydro Avoided Cost (BCHAC) - Scenario B
Wind Energy Rate ( for sites at 8m/s )
2.00
Wind Energy Rate ( for sites at 7m/s )
Wind Energy Rate ( for sites at 6m/s )
0.00
2002
19
2003
2004
2005
2006
2007
2008
2009
2010
2011
Excluding Canada's Wind Power Production Incentive (WPPI), Carbon Credit Revenues and others.
16
V. SOCIAL AND ECONOMIC BENEFITS OF WIND ENERGY
Highlights
Ø The gap between the current supply and the projected demand for the provision of wind turbines
in North America is in the order of 1,200 MW per year for the period from 2004 to 2011,
providing a business opportunity for the installation of a new wind turbine assembly plant in
British Columbia
Ø The implementation of a strategy for the development of wind energy in British Columbia could
enable, in the case of Wind Development Scenario I, the creation of 8,000 job-years due lonely to
the installation and operation of 1,200 MW, and in the case of Wind Development &
Manufacturing Scenario II, the creation of 50,000 job-years due in addition to the manufacturing
of wind turbines for the NAFTA market.
5.1. Wind Industry Context
Supply and Demand in the NAFTA Market
With regard to the supply of wind turbines in the world, the major manufacturers are VESTAS,
NEG MICON and BONUS (Denmark), ENERCON and NORDEX (Germany), General Electric
(USA), GAMESA and MADE (Spain), who in 2001 had manufactured approximately 85% of the
wind turbines installed worldwide (over 20,000 MW)20 .
In North America, NEG MICON installed a wind turbine assembly plant in Champaign, Illinois –
USA, producing approximately 400 wind turbines per year and LM Glasfiber, also from Denmark
opened a wind turbine blade manufacturing plant in Grand Forks, North Dakota – USA21. General
Electric Wind also has wind turbine manufacturing facilities in California – USA.
With regard to demand, Helimax forecasts that approximately 4,750 MW of new capacity will be
installed in Canada during the period of 2004-2011, including at least 25022 MW in British
Columbia, based on the current market conditions. However, if the province of British Columbia
adopts a sustainable wind energy development policy, this would make it possible to install at least
1,200 MW on-shore, from 2004-2011, which would increase the installed capacity in Canada to
5,700 MW23 . Throughout North America, Helimax forecasts that demand in the NAFTA market
would be, in addition to 5,700 MW in Canada, 15,000 MW in the USA and 2,500 MW in Mexico
for a total wind energy capacity of 23,000 MW for the period of 2004-2011.
20
BTM ApS Consult.
Source : AWEA.
22
Not including the offshore-proposed project of 700 MW.
23
Giving that (4,750-250)+1,200=5,700.
21
17
In conclusion, the current supply is less than the projected demand for the provision of wind turbines
in North America for the period of 2004 to 2011, providing a business opportunity for the
installation of a new wind turbine assembly plant in the region of North America offering the best
attributes.
Key Decision-Making Factors
Creation of a Strong Local Market
Despite its considerable wind energy potential, current conditions in British Columbia seem to lead
towards limited wind energy development. The commitment made by BC Hydro to develop
renewable energies at the rate of 10% of the additional capacity installed each year, would result in
the addition of wind energy amounting barely to tens of MW around 2011. This is very low
compared to the level of expansion of wind energy in areas of the world that have managed to attract
a wind energy industry.
In fact, it has been observed throughout the world that a strong wind energy industry was established
in areas where projects were developed quickly and steadily. The emergence of such an industry in
British Columbia will only be made possible with a firm desire on the part of the various political
and economic players to put in place a series of tax measures and financial incentives intended to
create favourable and attractive conditions for the emergence of a true wind energy industry in
British Columbia.
Conditions for Competitiveness
On another level, we believe that British Columbia offers the main conditions for competitiveness
that are likely to attract manufacturers of wind turbines to this province, including a well-developed
manufacturing base, the existence of skilled labour, a leading-edge industrial and technological
infrastructure, an adequate network of maritime and rail transportation, as well as free access to the
NAFTA market.
5.2. Job Creation and Other Benefits
Key Ratios Considered
In terms of job creation, the study conducted by the Danish Wind Turbine Association in 1998
estimates that 22 job-years are created for each one million American dollars invested (17 job-years
in manufacturing and 5.5 job-years in installation). Helimax estimates that the total number of jobs
created by the wind energy industry, during the period of 2004-2011, could potentially reach24 on
average 14.6 job-years/MW manufactured and 4.2 job-years/MW installed, to which one must add
at least 2.6 job-years/MW pertaining to the operation of wind projects25 .
24
25
Assuming that the cost of installed capacity decreases yearly at a rate of 1.5%.
Based on the ‘Le Nordais’ project in Quebec and recent wind energy projects in the USA (2001, AWEA).
18
Figure 7: Total Job Creation in the Wind Energy Sector
Operation
12%
Construction
20%
Manufacturing
68%
Assumptions and Job Creation
If British Columbia commits to a policy promoting wind energy, two different scenarios could take
place during the period of 2004-2011 in terms of economic benefits, namely:
•
Wind Development Scenario I:
In this scenario, the province would manage to have at least 1,200 MW installed without a wind
turbine assembly plant being established locally. The necessary investment is therefore estimated at
over one billion $US ($2002). In this scenario, job creation is ensured solely through activities
related to the construction, installation and operation of wind projects, that is, about 8,000 job-years.
•
Wind Development & Manufacturing Scenario II:
This scenario assumes that in addition to the installation of 1,200 MW, the province would succeed
in putting in operation at least one wind turbine assembly plant in British Columbia that would gain
continental recognition and would manage to penetrate the wind energy market in British Columbia
(50%), in the rest of Canada (30%), in the USA (5%) and in Mexico (5%), during the period of
2004-2011. In this second scenario, almost 42,000 job-years would be added due to the
manufacturing of turbines and penetration of the NAFTA market, that is, a total of 50,000 job-years.
Other Benefits
Wind Energy development on Vancouver Island is particularly profitable as it would reduce energy
loses through BC Hydro Transmission System. Besides, BC Hydro offers particular incentive for
energy project to be developed on the Island.
19
In term of royalties, the installation of 1,700 MW of wind energy capacity in 2001 in USA will
generate approximately US$ 5 million in royalties to landowners annually26 , representing 0.3% of
the total investment. Ratios slightly lower have been experienced in Canada.
In addition, the development of the wind energy industry would provide British Columbia with other
benefits, including in particular the reduction of greenhouse gas emissions in the order of 40 million
tons of CO2 e27 over the lifespan of the projects, the development of Green Energy exports and the
diversification of energy resources.
26
Source : AWEA.
Assuming a use factor equal to 30% for a 1,200-MW wind project over a lifespan equal to 25 years and an emission
factor equal to 500 tCO 2 e/GWh for a combined cycle gas-fired plant.
27
20
VI. P OTENTIAL ADVERSE EFFECTS
MITIGATION M EASURES
OF
WIND ENERGY
AND
Highlights
Ø Wind Energy projects provide Green Energy and complement agriculture, forestry and tourism
activities.
Ø Adequate measures should be taken while developing wind energy projects to address possible
adverse effects, especially on birds.
The area occupied by wind energy installations is at the most 1 % of the land allocated to the wind
project, the rest remaining available for the original utilization. In addition, as wind energy does not
pollute the air, the water or the soil, it complements agriculture, forestry, fisheries and tourism28 ,
and it generates a source of additional and recurring revenue for landowners.. Its production emits
no greenhouse gases and no nitrogen or sulphur oxides, gases that are responsible for climate
changes and acid rain.
Noise generated by wind turbines can be considered to be an impact to the residents living nearby.
Proper location of wind energy projects would mitigate this impact. Furthermore, wind turbines
located over 400 metres away from residences should not normally be audible. For instance, when
the wind speed is 7 m/s, the wind turbine noise at the source is 95 dB, which is comparable to a
garbage truck (100-110 db) or lawnmower (90-100 dB) noise. When it is very windy, the noise of
the wind masks the noise made by wind turbines.
The visual impact of wind turbines is a very subjective one. People living nearby may or may not
appreciate the appearance of wind turbines. Again, adequate location of wind energy projects will
help mitigate this impact, although opposition from some residents may persist.
Radar studies in the western part of Denmark, where a 2 megawatt wind turbine with 60 metre rotor
diameter is installed, show that birds - by day or night - tend to change their flight route some 100200 metres before the turbines and pass above the turbine at a safe distance. ‘The only known site
with bird collision problems is located in the Altamont Pass in California. Even there, collisions are
not common, but they are of extra concern because the species involved are protected by law29 . It
should be noted that problem with birds in the Altamont Pass was among other things, the result of
the lattice towers used in the 80’s (they were used by birds for perching). Tubular towers are now
being used, making perching almost impossible.
Although bird studies from Yukon, Canada, show that migratory birds do not collide with wind
turbines (CanWEA Conference, 1997), a thorough study must be done to avoid locating a project in
28
29
Indeed, many wind farms are themselves tourist attractions in Denmark.
Source: Danish Wind Industry Association
21
a bird pathway, such as the Pacific Flyway, which is a path taken by many migratory birds and
crossing Vancouver Island.
For the sake of avoiding potential adverse effects, the proposed wind energy sites were chosen as far
as possible from urban areas, national wildlife areas and migratory bird sanctuaries. However, the
implementation of wind projects requires a thorough assessment of the adverse effects on the
environment. In particular, vegetation, wildlife and ecosystem evaluations should be made before
the actual implementation of a wind project.
With regard to bird populations, specialized studies would need to be undertaken at specific future
wind project development sites in order to thoroughly assess the potential impact on local bird
populations, especially for wind projects in the Northern end of Vancouver Island.
22
REFERENCES
Web Sites
1. http://wlapwww.gov.bc.ca
2. http://www.awea.org/
3.
4.
5.
6.
http://www.bsc-eoc.org
http://www.bwea.com/
http://www.ohwy.com
http://www.pearson-college.uwc.ca
7.
8.
9.
10.
http://www.sierraclub.ca/bc
http://www.vancouverisland.com
http://www.vancouverislandabound.com
www.bchydro.bc.ca
11. www.iea.org
12. www.windpower.dk
Bibliographic References
13. 1999 Climate Change Progress Report, BC Hydro – December 1999
14. International Wind Energy Development. BTM ApS – March 2002
15. Strategic Considerations for a New British Columbia Energy Policy (Interim Report of the Task
Force on Energy Policy) – November 2001
16. WindSight – March 2002
17. The Pembina Institute Green Power Guidelines for Canada – July 2000.
18. 10,000 MW by 2010 (10x10), CanWEA – June 2001
19. The British Columbia High Technology Sector 2001, BC Stats
20. Wind Energy –The Facts, Vol.5, Market Development – European Commission
21. Wind Force 10, European Wind Energy Association, Forum for Energy and Development –
Greenpeace International – October 2000.
22. Parc éolien de la Gaspésie (Étude des répercussions environnementales) – Décembre 1995.
23