The Government of Prince Edward Island and Maritime Electric Company, Limited have signed an agreement that will see the utility purchase 39 megawatts of wind energy from the PEI Energy Corporation.
The agreement includes 30 megawatts of wind energy to be generated at the Energy Corporation’s wind farm under development in Eastern Kings County, as well as nine megawatts of wind energy from the Ventus Energy Inc. project in Norway, PEI - just south of North Cape. The Energy Corporation has entered into a separate agreement with Ventus Energy to purchase power from the Norway wind farm and will sell it to Maritime Electric.
“The signing of this power purchase agreement marks another important milestone in the development of renewable energy in Prince Edward Island,” said Minister of Environment, Energy and Forestry Jamie Ballem. “When this power comes online, we will more than triple our renewable energy resources in the province. This will give Islanders much greater access to clean, sustainable energy produced right here at home.”
Wind energy at North Cape currently supplies approximately five per cent of PEI’s electricity needs. With the addition of another 39 megawatts of wind energy, the utility will be close to meeting its legislated requirement to acquire at least 15 per cent of electrical energy from renewable sources by 2010.
The power purchase agreement will see Maritime Electric buy the wind energy at the minimum purchase price for renewable energy prescribed under provincial regulations. That price is 7.75 cents per kilowatt hour, with 5.75 cents of that a fixed rate and 2.0 cents a variable rate that may be adjusted annually to reflect changes in operating costs. The variable rate is tied to the Consumer Price Index.
Under the terms of the 20-year agreement, the Province will provide Maritime Electric with the value of the offset or carbon credits associated with the wind farms – to the extent that the utility needs to meet emission reduction targets under the Kyoto Protocol. This would result in a savings for Island ratepayers as the utility will not have to purchase carbon credits. The wind energy from the wind farms may also defer Maritime Electric’s requirement to buy new capacity which is another benefit to Island ratepayers.
The power purchase agreement is subject to approval by the Island Regulatory and Appeals Commission (IRAC). Maritime Electric is filing an application for approval of the power purchase agreement.
Pending environmental approvals, construction of the wind farm in eastern Kings is scheduled to start this summer with the facility operational in late 2006. The project is currently undergoing a provincial and federal environmental impact assessment. Construction of the Ventus project is tentatively scheduled to begin later this year and be completed in 2007.