1. Clean Wind Power

2. Political Fundamentals Cost of wind is decreasingCost of wind is decreasing KyotoKyoto Ozone annex of Clean Air TreatyOzone annex of Clean Air Treaty Cost stabilizationCost stabilization Rural economic development – lease income not agriculture subsidiesRural economic development – lease income not agriculture subsidies Cost of wind is decreasingCost of wind is decreasing

3. Cost Drivers Swept areasSwept areas Tower Heights (faster winds)Tower Heights (faster winds) Economies of scaleEconomies of scale Improved sitingImproved siting

4. Technology 35 25 15 30 20 10 40 5 Radius of rotor (metres ) 500 kW 1300 kW 750 kW 500 kW 250 kW 50 kW 1800 kW Source : AWEA Cost Reductions

5. Technology Tower Sizes Taller towers capture faster winds 40M50M65M80M

6. Technology: Cost Reductions Cost driver for larger blades, is stronger light weight blade materialsCost driver for larger blades, is stronger light weight blade materials Cost driver for taller towers is, improved tower and foundation designsCost driver for taller towers is, improved tower and foundation designs

7. Worldwide Wind Capacity Compound 5-Year Growth 32% Source:BTM Consult and EWEA MW

8. Wind Economics No fuel costNo fuel cost Stable fuel costStable fuel cost Strong correlation to load requirementStrong correlation to load requirement –More production in winter –More production on windy days –More production during the day

9. Correlation between Supply & Demand Gaspé/Québec 0 2 4 6 8 10 12 14 JanFebMarAprMayJunJulyAugSeptOctNovDec Months % of annual total Demand Supply Source: GP CO Inc.

10. Wind Economics What about calm days? –Wind complimentary to water based storage –When wind is blowing, store the water behind the dam –When calm, run water through turbine Canada is > 60% water power

11. Gaspé

12. Wind Investment Fundamentals More capital intensive than fossil fuelMore capital intensive than fossil fuel Stable cost has public policy benefit by eliminating fuel cost riskStable cost has public policy benefit by eliminating fuel cost risk Will never have to buy carbon creditsWill never have to buy carbon credits Will never have to buy Nox or Sox creditsWill never have to buy Nox or Sox credits Distributed benefits – can decrease line losses if well locatedDistributed benefits – can decrease line losses if well located Jobs in rural areasJobs in rural areas

13. Impact of Capital Intensity Property tax – 20X coal plant in OntarioProperty tax – 20X coal plant in Ontario The capital crunch in EPG makes this more challengingThe capital crunch in EPG makes this more challenging Capital tax distorts investment to low capital, high operating cost investment – fossil fuelCapital tax distorts investment to low capital, high operating cost investment – fossil fuel Capital will tend to be provided for the least capital intensive projectCapital will tend to be provided for the least capital intensive project

14. Kyoto Process Kyoto 2 nd round starts 2005Kyoto 2 nd round starts 2005 Evidence of human caused climate change will become strongerEvidence of human caused climate change will become stronger What if 25% reductions are needed?What if 25% reductions are needed? What if 50%?What if 50%?

15. Result? Wind is THE low risk investment (and water)Wind is THE low risk investment (and water) Fossil plants will become more costly to operate (carbon credits)Fossil plants will become more costly to operate (carbon credits) Your regulator may not accept the argument that this was not forseeableYour regulator may not accept the argument that this was not forseeable

16. Federal Incentive 1.2 ¢/KWH 2003 1.0 ¢/KWH 2004 1.0 ¢/KWH 2005 1.0 ¢/KWH 2006.8 ¢/KWH 2007.8 ¢/KWH 2007 Payable for 10 years Taxable Limited to 1000 MW

17. Provincial Options RPS– renewable portfolio standard - require retailers to buy a percentage from renewables Green Power Procurement Match Federal incentive Systems Benefit Charge

18. Other Provincial Issues Rules on interconnection and transmissionRules on interconnection and transmission Property taxes, sales tax, capital taxProperty taxes, sales tax, capital tax Can the power be sold? Price paid?Can the power be sold? Price paid? Emissions – are there caps?Emissions – are there caps? Crown land policiesCrown land policies

19. Other Support Resource assessment, wind atlasResource assessment, wind atlas Net meteringNet metering Streamlined approvalsStreamlined approvals Electricity labelingElectricity labeling

20. Gaspé

21. Wind Energy Truly Sustainable Energy for the 21st Century