A Nova Scotia wind developer doesn’t want to hand over $550,000 to Nova Scotia Power for not meeting its deadline to deliver green electricity.
"It’s a big issue," said Jim Meredith of Renewable Energy Services Ltd. "That’s a lot of money."
The private wind company, headquartered in Lower Sackville, signed a power purchase contract with NSP in February 2008 to provide the utility with 22 megawatts of wind-generated electricity by Nov. 30, 2009.
Under the contract, the company provided a security deposit for $550,000, or $25,000 per megawatt, to NSP in case the company didn’t meet the terms of the contract, he said.
"Contractually, we signed a contract saying that we’re supposed to be in operation by Nov. 30, 2009. We put a security deposit down based on that. From a pure contract, I would say we’re offside. From a fairness point of view, I would say it is not fair," said Mr. Meredith.
Mr. Meredith said the firm was hit hard by the financial crisis in 2008, which made borrowing money difficult for its proposed $55-million wind project at Statia Terminals in Cape Breton.
The company lobbied both the provincial government and NSP for an extension, he said.
He said the provincial government gave the power utility an extension in November to buy renewable energy from independent power producers because the financial meltdown has stalled many of the projects.
"The theory is NSP would pass it along to the people that bid," he said. "But they haven’t."
Mr. Meredith said the company plans on continuing to talk to the utility and hopes to have an answer in a month.
"I can’t say we have or haven’t forfeited (the money) because . . . it’s a decision that hasn’t been made by either party," he said.
The Chronicle Herald revealed on Wednesday that Shear Wind Inc., a Bedford renewable energy company, had to pay NSP $500,000 for not producing the promised green electricity on time from its proposed $160-million wind park near New Glasgow.
The company was unable to get the necessary financing.
Renewable Energy Services Ltd. and Shear Wind are two of the six groups that signed contracts in 2008 with NSP to sell wind-generated electricity, for delivery in late 2009.
NSP contracted for 247 megawatts of power, enough for 87,000 homes. The utility signed up with the independent power producers to meet the government’s target of 25 per cent of its electricity from green sources by 2015.
Of the six contracts, only RMS Energy, which has 34 wind turbines in the Cobequid Range, 25 kilometres west of New Glasgow, is producing electricity on schedule, according to NSP’s website.
NSP spokesman David Rodenhiser would not say which companies have forfeited their security deposit.
"Nova Scotia Power wants to see all of these projects move forward. We have worked closely with the developers of these projects, allowing flexibility where possible, to help move the projects forward and bring more renewable energy to the grid as soon as possible for the benefit of our customers," Mr. Rodenhiser wrote Wednesday.
There are 75 wind turbines across the province generating electricity for the utility, according to its website.
The other wind developments that signed long-term purchase power agreements with NSP have been delayed, purchased by other developers or remain uncertain.
Last April, NSP purchased developmental rights to a 22-turbine proposal for Nuttby Mountain from bankrupt EarthFirst Canada Inc. of Calgary. The $120-million wind farm, about 20 kilometres north of Truro, is expected to be operational this year.
1 comment:
When he himself is saying it is not fair then what is the point of this huge penalty.
Post a Comment