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October 26, 2009
For immediate release
Government and Maritime Electric to Seek Proposals to Increase Use and Development of Renewable Energy
Environment, Energy & Forestry
“Beginning today, the government of Prince Edward Island in collaboration with Maritime Electric will take a step forward in the development of renewable energy in this province. Maritime Electric will issue a request for proposals for 30 megawatts of additional renewable energy for the province’s domestic market and as much as 100 megawatts of renewable energy for export,” said the minister.
“Domestic wind supplies Maritime Electric with one of its lowest cost sources of electricity, while the export of wind gives the utility revenues that contribute toward lower energy costs for Islanders. This announcement means opportunity for Islanders and Island businesses. It also means we will better protect Islanders from the worst effects of volatile global energy prices.”
Renewable Energy Credits from the energy exported will be sold in order to provide revenue for the province and further stabilize rates on Prince Edward Island.
The energy produced for the domestic market will be sold to Maritime Electric and distributed to Islanders. The utility already supplies more than 15 per cent of its customers’ power from wind and the new development will bring that share to over 20 per cent renewable-generated electricity.
Energy produced for export will be shipped along Maritime Electric lines, producing revenue for the utility that will contribute toward the reduction of electricity costs.
“Through this RFP process we are looking to increase the amount of renewable energy supply for our customers and at the same time reduce the Island's dependence on fossil fuel based supply sources purchased from off-Island suppliers. Our customers have told us they want more renewable energy supply so we have worked with the province and developed this plan which could see a quarter of our customers needs met by a renewable energy supply,” said Fred O’Brien, President and Chief Executive Officer of Maritime Electric.
To ensure that the Request for Proposals (RFP) process is conducted in a fair, transparent and competitive manner, a fairness auditor has been selected to oversee this undertaking. The fairness auditor will also ensure that any subsequent contracts that are awarded as a result of the RFP are consistent with the successful proponent’s submission.
Terry MacDonald, President of KnAP Energy Consultants, will act as the fairness auditor for this RFP. MacDonald is a professional engineer with 40 years experience in the energy industry. Prior to his career as an energy consultant, MacDonald served in several senior positions with Nova Scotia Power Corporation and Nova Scotia Power Inc.
In addition to his responsibilities in overseeing the RFP process, MacDonald will be available to answer questions from the general public about this undertaking and renewable energy in general.
“We want this RFP process to work for Islanders and to make sure that it does we have hired someone with the integrity and expertise to watch for Islanders’ interests,” said Minister Brown. “If the fairness auditor is satisfied the process was followed properly and the public interest is being met, then - and only then - will we proceed with this next stage of wind development.”
The announcement of this request for proposals brings Prince Edward Island’s wind industry a major step forward. If all 130 megawatts are developed, the total wind production in the province will be 293 megawatts.
Minister Brown said any proposals for wind development must get passing grades on several key criteria and must be able to show that the project has community support.
“We want to see energy development on Prince Edward Island but first and foremost we want to make sure that development serves the interests of Islanders. This project and this process will serve both those goals,” said Minister Brown. “No proposal will go ahead if we aren’t convinced that it serves the interests of all Islanders.”
Government and Maritime Electric to seek proposals to increase use and development of renewable energy
Renewable Energy – Request For Proposals:
Maritime Electric (MECL) will award a 20-year power purchase agreement for up to 30 megawatts of renewable energy. Bidders will be expected to provide energy for this domestic supply by October 1, 2012.
100 megawatts of export energy capacity will be available during this process. Proponents will be responsible for finding their own purchasers for this power. Bidders will be expected to have their export energy capacity ready by October 1, 2013.
Each bid will be assessed based on its beneficial impact on energy rates for MECL customers. Economic and community benefits from each proposal will also be considered in evaluating proposals.
A developers’ meeting is tentatively scheduled for November 12, 2009. Submissions from respondents will be due by January 29, 2010. Contracts between bidders and MECL are expected to be complete by April 30, 2010.
Pass/Fail Criteria for Bidders:
1. Respondent structure, experience and financial capacity
2. Project description
3. Wind Resource Data (for wind respondents) or Fuel Supply Plan (for biomass respondents)
4. Energy Profile
5. Land Acquisition
6. Generator Supply and Schedule
7. Project Financing Arrangements
8. Operating and Maintenance Plan
9. Preliminary Project Feasibility Study
10. Demonstrated Community Support
The Fairness Auditor:
The Fairness Auditor will provide independent monitoring of the entire RFP process and will be present for the initial developer’s meeting, for meetings of the RFP evaluation committee, through to the awarding of power purchase agreement(s) to the successful respondent(s).
A website and toll-free number will be available for Islanders and respondents with questions about the project and the RFP process.
Within 10 days of the Evaluation Committee reaching a decision, the fairness auditor will be expected to present the Department of Environment, Energy and Forestry with a report expressing an opinion on the fairness, transparency and competitiveness of the RFP process and the results of the Evaluation Committee.
To ensure that the Request for Proposals (RFP) process is conducted in a fair, transparent and competitive manner, a Fairness Auditor has been selected to oversee this undertaking. The Fairness Auditor will also ensure that any subsequent contracts that are awarded as a result of the RFP are consistent with the successful proponent’s submission.
Mr. Terry MacDonald, President of KnAP Energy Consultants, will act as the Fairness Auditor for this RFP. Mr. MacDonald is a professional engineer with 40 years experience in the energy industry. Prior to his career as an energy consultant, Terry served in several senior positions with Nova Scotia Power Corporation and Nova Scotia Power Inc. Past experience also includes membership on several national and international committees relating to electrical utility practice, as well as providing expert witness testimony at regulatory hearings.
In addition to his responsibilities in overseeing the RFP process, Mr. MacDonald will be available to answer questions from the general public about this undertaking and renewable energy in general.
Benefits of Wind Energy:
- Electricity produced from the East Point Wind Farm is among the least-cost electricity available to Maritime Electric.
- Exporters must pay Maritime Electric in order to use the utility’s energy corridors for wind transmission. This revenue reduces the revenue required from Islanders.
- Wind energy reduces greenhouse gas emissions that would be produced by other energy sources. The 40 megawatts of wind power at provincially-owned wind farms in East Point and North Cape displace an estimated 70,000 tonnes of greenhouse gases each year.
- All exporters of wind will be expected to pay government an annual environmental fee of $15,000 per megawatt.
Securing Our Future: The 10 Point Plan:
(key principles from the 2008 wind development strategy)
1. Maximizing Energy Security, Independence and Price Stability for Islanders
2. Generating Revenue from Green Energy Exports
3. Demonstrating Community Support
4. Building a Collaborative Partnership Approach to Cable and Transmission Planning
5. Maximizing Economic Benefits
6. Promoting Sound Land-Use Planning
7. Assuring Compliance with Environmental Review Processes
8. Promoting Fair and Equitable Land Leases
9. Advancing a Consistent Taxation and Business Support Environment
10. Partnering with Proven Developers
Anticipated Economic Impacts of the RFP:
- Capital cost over $260 million
- 220 construction jobs
- $57 million in local construction spending
- $16.5 million in tax revenues over construction
- After construction ends, wind development will contribute over $10 million annually to provincial gross domestic product.