Hydro-Quebec accepts wind-power proposals entailing $5.5B in capital spending

By Lia Levesque, The Canadian Press

MONTREAL - Hydro-Quebec has accepted 15 bids from companies offering to provide the provincial utility with a total of 2,004 megawatts of wind-generated electricity that would come on stream between 2011 and 2015 if final approvals are reached.

The average price is 10.5 cents per kilowatt-hour and the projects involve estimated capital outlays totalling $5.5 billion, including $1.1 billion for transmission infrastructure, Hydro-Quebec said Monday.

The contracts arise from a call for tenders issued in October 2005 seeking Quebec-generated wind power. The projects will be located in eight different regions of the province.

The outcome "ensures a supply of renewable energy at a highly competitive cost for wind power," stated Hydro-Quebec chief executive officer Thierry Vandal.

The largest of the projects will be the production of 350 megawatts at Lac Pikauba and Lac Minustuk in the Charlevoix region.

Another significant project will be in the communities of Ste-Irene, La Redemption and St-Cleophas in the Matapedia-La Mitis regional municipality. That project is expected to produce 300 megawatts.

All the winning bidders have promised that at least 60 per cent of the cost of each wind farm will be spent in Quebec, and at least 30 per cent of the cost of the wind turbines must be incurred in Matane in Gaspesie-Iles-de-la-Madeleine.

Hydro-Quebec now will draw up firm contracts with the project proponents, which must get approval from environmental and municipal agencies.

"Social acceptibility is one of the essential conditions in the development of all the wind projects," Charest told a news conference. "Social acceptability does not mean unanimity. This will not be unanimous but it's still a very important criteria which must take into account those who make their assessments."

Environmental groups seemed pleased with the announcement of the projects.

Steven Guilbeault, a spokesman for Equiterre, said wind power is a popular energy option.

"This is good news," he said. "These projects should thrive if they are developed in a responsible manner."

Philippe Bourque, a spokesman for the provincial coalition on regional environment councils, said it's essential that area residents understand the projects and suggested there be public hearings.

"Developers and municipalities that have been selected (must) open a dialogue with their citizens," he said. "Otherwise we will end up putting up barriers that are not necessary. If people are aware and don't think things are being done behind their backs they will accept the projects because it is positive for everybody."

Bernard Genereux, president of the Quebec federation of municipalities, said the projects are a good way for regions to diversify their economy and their revenues.

"The wind-turbine network offers a unique opportunity to provide the municipalities with the development tools that will assure their future," he said, adding he hopes the government will ensure municipalities get their share of the benefits from the project.

Wind turbine manufacturer AAER Inc. (TSXV: AAE.V) said in a release Monday its proposal was not selected by Hydro-Quebec.

The company's shares were halted Monday morning, and last traded down 11 cents or 5.7 per cent at $1.81 on the TSX Venture Exchange.