Hydropower, Wind Power

Canadian News

Issue 6 and Volume 28.

SNC Lavalin winning bidder for 435-MW Waneta Expansion

Waneta Expansion Power Corp. selected SNC Lavalin Inc. of Vancouver as the preferred bidder for design-build construction of the 435-MW Waneta Expansion hydroelectric project, adjoining Teck Resources Ltd.’s Waneta Dam on the Pend Oreille River.

Waneta Expansion Power, a venture of Columbia Power Corp. and Columbia Basin Trust, picked SNC Lavalin over two other bidders, Peter Kiewit Sons Co., Edmonton, Alberta, and Bilfinger Berger-North America Construction Joint Venture, a Vancouver-based joint venture of Bilfinger Berger (Canada) Inc. and North America Construction (1993) Ltd.

The developer said it would commence negotiations with SNC Lavalin over several months toward contract finalization.

The developer said, in accordance with its request for proposals, the viability of the project will be reassessed upon completion of the financing and commercial arrangements work and contract finalization with SNC Lavalin. If it decides to proceed, construction could begin by fall 2009, it said.

Waneta Expansion involves the design and construction of a second powerhouse at the existing Waneta Dam. Waneta Expansion would share the dam’s hydraulic head and make use of flows that otherwise would be spilled. The C$400 million (US$387 million) project would reduce the amount of water spilled at Waneta Dam, reducing total dissolved gas downstream and improving Columbia River water quality.

Canada income fund to acquire 15 hydro projects from Brookfield

Great Lakes Hydro Income Fund intends to acquire 15 Canadian hydroelectric projects totaling 387 MW and one proposed wind project from Brookfield Renewable Power Inc. for C$945 million (US$813 million).

Great Lakes, which is owned 50.01 percent by Brookfield Renewable parent Brookfield Asset Management Inc., also plans to increase its market capitalization and change its name to Brookfield Renewable Power Fund. The transactions were approved by both entities’ boards and announced July 6, 2009.

Great Lakes and Brookfield Renewable said the deal includes sale of “substantially all&”; of Brookfield’s Canadian renewable power generation business not already owned by Great Lakes. Brookfield has more than 165 generating facilities, mostly hydro, totaling 4,100 MW, in Canada, the United States, and Brazil.

“As part of a strategic repositioning approved by its board, Brookfield will invest in Canadian contracted renewable power generating assets through the fund as its exclusive platform for such investments,&”; Brookfield Renewable said. “Brookfield and the fund will maintain the fund’s current focus on producing stable cash flows from high-quality, long-life renewable power assets.&”;

Great Lakes said the transaction is to expand its renewables platform to 42 hydroelectric facilities and two wind farms with combined capacity of nearly 1,700 MW.

Reflecting increased power prices, Brookfield also is to increase the price it currently pays for power generation from Great Lakes’ Lievre hydro operations in Quebec totaling 249 MW and its Mississagi hydro operations in Ontario totaling 499 MW.

Great Lakes is to pay consideration to Brookfield Renewable of C$945 million (US$813 million), including C$365 million (US$314 million) in cash, payable out of the net proceeds of a C$185 million (US$159 million) offering of subscription receipts and a C$195 million (US$168 million) concurrent private placement of subscription receipts. The total consideration also includes a C$200 million (US$172 million) senior unsecured note of the fund to be issued to Brookfield Renewable and issuance to Brookfield Renewable of 25.5 million trust units of the fund at the weighted average price of the subscription receipt issued, representing an aggregate of C$380 million (US$327 million).

Brookfield Renewable is to purchase 50 percent of the newly issued units, increasing its investment in the fund to C$1 billion (US$862 million) and maintaining its 50.01 percent ownership of the fund.

Great Lakes identified the hydro project acquisitions as: Great Lakes Power Ltd.’s 12 hydro projects totaling 349 MW on the Magpie, Michipicoten, Montreal, and St. Mary’s rivers in northern Ontario; Hydro-Pontiac’s Waltham and Coulonge projects totaling 28 MW on the Noire and Coulonge rivers in Quebec; and 10-MW Valerie Falls on Seine River in Ontario.

BC Hydro agrees to buy power from 7.5-MW Fitzsimmons Creek

BC Hydro has signed a contract with developer Innergex Renewable Energy Inc. to buy power from Innergex’s 7.5-MW Fitzsimmons Creek hydroelectric project under the Canadian utility’s Standing Offer Program.

BC Hydro formally launched the Standing Offer Program in April 2008, inviting clean or renewable power projects of up to 10 MW, including hydropower, to sell to the British Columbia utility at a fixed price with standard contract terms and conditions.

“The Fitzsimmons Creek project is one of the first hydro projects to execute an EPA (electricity purchase agreement) with BC Hydro under this new program,&”; Innergex President Michel Letellier said June 24, 2009. “The SOP offers a standard contract with set prices and a streamlined administrative process. This gives a smaller project, such as Fitzsimmons Creek, the opportunity to contribute 33,000 megawatt-hours per year to B.C.’s supply of clean electricity.&”;

The run-of-river project is being built on Fitzsimmons Creek between Whistler and Blackcomb mountains in Whistler, B.C. Construction began in July 2008 with a budget of C$33.2 million (US$28.8 million). Innergex said work is on time and on budget for commercial operation before the end of 2010.

The company said it also expects Fitzsimmons Creek to be eligible for Canada’s ecoEnergy for Renewable Power Program. The program offers a C$10 (US$8.67) per megawatt-hour incentive for electricity produced by low-impact, renewable electricity projects for ten years after commissioning.

Innergex owns 66.66 percent of Fitzsimmons Creek, while Ledcor Power Group owns the remainder. Innergex acquired the project as part of a 2008 deal to acquire two-thirds of a joint venture with Ledcor to develop 18 run-of-river hydroelectric projects in British Columbia totaling more than 200 MW.

Canada Green Infrastructure makes first award to 6-MW Mayo B

Canada’s new C$1 billion (US$924 million) Green Infrastructure Fund made its first award to the 5- to 6-MW Mayo B hydroelectric project and Phase 2 of the Carmacks-Stewart transmission line in Canada’s Yukon Territory.

The government of Canada is to provide up to C$71 million (US$65.6 million) for the total C$160 million (US$148 million) project, which also is being funded by the Yukon government.

The Mayo B project includes construction of a powerhouse containing two or three turbine-generators near the existing 5-MW Mayo project operated by Yukon Energy Corp. The hydropower expansion project also includes a canal and penstock to move water from the existing intake to the new powerhouse.

The Green Infrastructure Fund is part of Canada’s Economic Action Plan to create jobs, boost the economy through infrastructure investments, promote long-term growth, and improve the environment.

A government statement said the increase in capacity at Mayo B is made possible by building the new powerhouse in a location that doubles the elevation drop from Wareham Lake. It said that doubles the energy that can be obtained from the water flowing through its turbines without new dams, reservoirs, or new inundation.

Mayo B is expected to reduce Yukon’s reliance on diesel generation by more than 40 percent by 2012.

Canada is to provide C$1 billion (US$924 million) over five years to the Green Infrastructure Fund. The fund is to support sustainable energy generation and transmission, and municipal wastewater and solid water management infrastructure.

The government is working with provinces, territories, and stakeholders to identify more projects for the fund. It will be allocated based on merit to support green infrastructure projects on a cost-shared basis. The fund is to focus on a few large-scale strategic infrastructure projects.

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