Harvesting the wind

Darlene Leader sits on a deck at her family farm near Shelburne, north of Orangeville in Dufferin County. She watches as the huge blades of four giant wind turbines slowly turn. Critics say they are noisy, but on this day, the sound, if there's any, is negligible.

The four white towers on the 500-acre Leader property are part of a 45-tower operation in Melancthon and Amaranth townships that represents the first large-scale wind farm in Ontario.

Supporters say it's an indication that wind energy is finally being taken seriously in the province. Some, in fact, see it as the best bet to revive Ontario's struggling rural economies.

Darlene and Arley Leader expect to collect as much as $30,000 a year from Calgary-based Canadian Hydro Developers Inc., the firm behind the venture. Already they believe harvesting the wind is apt to be more profitable in future than raising crops or cattle.

Battered by two years of concern over mad cow disease and by U.S. farm subsidies that are leaving many Canadian farmers unable to compete, they say any new income source is welcome.

The Leaders run a cow-calf operation and rent part of their land to a potato farmer. Both drive school buses to help pay the bills.

"It's a lot of land and a lot of work and at the end of year you are doing it for nothing," Darlene Leader says.

"We have really low debt, but still can't make enough money to live off the farm. We are getting 1979 prices for our crops and you know what fuel and fertilizer and machinery cost.

"There's no way you can keep up. We're just riding a wave now. We drive a 10-year-old truck and we can't see any sense in putting $50,000 into a new one or buying new machinery. It's really sad."

Wind, on the other hand, is the fastest growing energy source in Canada. At least six major wind farms are either built or are about to be built in Ontario and the fledgling industry shows the potential of becoming a significant force – both as a business opportunity and a means of generating clean electricity.

Look at the economic impact that one project – the 45-tower Melancthon One project – is having, according to a study done by Canadian Hydro:

An initial investment of $126 million was required, about $16.2 million of which was spent locally.
Each wind tower will generate payments of between $5,500 and $7,500 per year in royalty payments to property owners.

The project is expected to generate enough power to provide electricity for 25,000 homes.
24 kilometres of roads were built on farms to provide access to the turbines and two kilometres of existing roads were upgraded.

Canadian Hydro expects to spend $3.2 million a year on operating costs (not including royalties) of which $1.16 million is expected to be spent locally.

About 45 person-years of employment were generated in Melancthon Township and surrounding areas during construction.

Canadian Hydro will pay $196,955 in property taxes. Of that, $41,720 goes to Melancthon and the rest goes to nearby Amaranth Township, Dufferin County and county school boards.

Canadian Hydro built 55 kilometres of power lines.

Melancthon Township Mayor Gerry Mathews says the wind farm is the biggest economic boon the township has experienced.

"A couple trucking and construction companies told me they would have gone under if it weren't for this. We have gravel pits in the area and they had trucks on the road like you wouldn't believe. They hauled gravel from June to September.

"They (Canadian Hydro) used local companies to put the lines up and there were big contracts for concrete.

Mathews says the projects have also helped area farm people by providing a new source of income.
"A lot of my neighbours have lost their farms and a lot more are just hanging on. There used to be a lot of beef farms and now I'm the only one in my area."

Mathews didn't take part in the debate when the wind farm was discussed by township councillors. He had a conflicting interest because he has a turbine on his own farm.

The mayor knows that not everybody is happy with the township's newest business. He fields complaints about noise, and about lights at night. He also hears concerns that Canadian Hydro doesn't pay enough municipal taxes.

And the critics do have a point about taxes, Mathews says.

For tax purposes, he notes, the towers are assessed at a value of $40,000 each – even though they cost $2 million to put up.

"We (the township) get about $600 (for each tower), but they have improved a lot of roads. They helped the township that way."

For Canadian Hydro, the wind farm represents a huge investment, but one that should generate profits.

And for the Ontario government, the Melancthon One project is one piece in a puzzle it must solve in order to shut down the province's dirty coal- burning power plants.

The province has made a big commitment to wind power and is hoping it will pay off with years of clean power at a stable price.

Melancthon Township farmer John Parr fears the day will come when the township regrets approving the wind farm project – as well as others yet to come.

"It is a massive project for the township and there are too many concerns that no one seems able to answer," Parr says.

He says he scrutinized plans for the wind farm before it was built and read extensively about impact such projects have had in other places. Now he doesn't like the picture he sees unfolding.

Studies in other areas have determined that communities with wind farms have seen property values slip and have reported a higher incidence of problems, including vibration caused by low-frequency sounds and mental health problems associated with depression, anxiety and suicide.

Parr said he also thinks the township negotiated a poor deal with the Canadian Hydro.

"In the beginning, there was an understanding that we were going to get a massive amount of tax dollars. And then the province set the assessment for the turbines. That was a real kick in the ass for the community."

Parr says many people feel the community is being taken advantage of, but agrees they aren't apt to show up at township council meetings.

"The people who are pissed off don't show up council meetings. Our community had a 24-per-cent voter turnout in the last municipal election. Most of the people are so grossed out by what goes on all the time that they don't participate."

Parr also anticipates rifts developing between residents who are for and against the wind farm.
"At the end of the day, these big monsters will be up, their lights will be flashing and Canadian Hydro will have gone back to Alberta or wherever they go and we'll be left with neighbours hating neighbours."

Parr thinks the township should have taken more time to assess the experience after Melancthon One before plowing ahead with the second phase.

Instead, he says, the first phase was no sooner up than approvals were being sought for the second phase.

Had there been time, community members would have been able to determine if this is really what they want.

Tom Adams, executive director of Energy Probe, a Toronto-based consulting company interested in energy issues, says he's a big fan of wind farms and other forms of renewable energy, but that the province's Liberal government is going about it all wrong.

Adams says that by the province ensuring a rate of 11 cents per kilowatt for wind energy, the province has eliminated any need for companies to compete – or any ability for consumers to enjoy lower prices.

His primary complaint, Adams says, is that the price is higher than what has been available on the open market. Instead, the goal should be to deliver energy at the lowest possible cost.
"If renewable energy always comes at a premium, the market becomes kind of a ghetto.
"If wind power is always an exotic, costly and unreliable source of electricity preferred by wonks, counter-culture people and enthusiasts, it will never really go anywhere and it risks a rebellion from consumers."

Moreover, says Adams, neither nuclear or wind energy will fill the void caused by shutting down coal-burning plants. Coal has the advantage of being ramped up or down to meet variable demand – something neither nuclear or wind projects can do.

"When the minister (Ontario Energy Minister Donna Cansfield) talks about wind-power procurement and the standard offer program to replace coal, its just nonsense.

"It is either a reflection of profound ignorance on the part of the minister about how the power system works or it is the special kind of truth we call politics."

Adams says Ontario power users have higher costs and blackouts to look forward to in the future as a result of choices the government is making.

He favours wind and other forms of renewable energy, but is opposed to subsidies or price guarantees and doesn't believe that co-ops or small operators can ever be truly competitive with big producers.

Capturing energy from the wind isn't a new technology. The Germans and Danes have been doing it for years. In Germany, the use of steel for manufacturing of wind turbines is second only to use for auto manufacturing. And Denmark gets 20 per cent of its energy from the wind.

But in Canada, the old technology is gaining new popularity. But even so, it has far to go to be in the same league as many European nations.

Today, wind energy accounts for only one half of one per cent of all of electricity produced in the country, according to statistics from the Canadian Wind Energy Association.

And among provinces, Ontario lags behind Quebec and some western provinces.

That's changing fast, however. Ontario wants to have 15 per cent of its power coming from the wind by 2025.

To encourage this, it has given wind power a premium price of 11 cents per kilowatt hour. That's considerably more than the rates that Ontario Power Generation gets from the province for the electricity it produces. That agency gets 4.95 cents per kilowatt hour for nuclear power, 3.3 cents for hydro (water-driven turbines) power and 4.7 for power creating by burning fossil fuels such as coal.

Proponents of renewable energy argue the numbers aren't a fair comparison because they don't take into account subsidies and the environmental costs of traditional sources of energy.

Neil Freeman, director of planning policy with the Ontario Power Authority, says there are limits on how much wind power can be incorporated into the Ontario energy mix.

The Ontario Power Authority is a provincial agency with the responsibility to ensure the province has an adequate supply of electricity.

"Wind is good energy because it is a free source, but it doesn't always blow. So you need other sources you can fire up when the wind doesn't blow or when it blows too hard."

Freeman said the authority is looking for ways to get wind power above the 15 per cent goal, but in doing so must ensure that reliability isn't compromised.

Robert Hornung, president of the Canadian Wind Energy Association, says that the amount of windpower that Canada can generate is expected to increase 10-fold over the next couple years. But even then, wind will only provide three per cent of the electricity Canada needs.

That compares with six per cent in Germany, eight per cent in Spain and almost 20 per cent in Denmark.

"So even with phenomenal growth it is not going to make us world leaders or anything, but if you look at what's projected in the next 10 years, wind will account for 15 to 20 per cent coming from new facilities."

And considering what's installed and what's planned, Ontario will surpass other provinces and be a leader in Canada, at least for a number of years.

Hornung notes wind is the fastest growing energy source in the world.

"There really has been a mind shift away from thinking of wind as this environmentally friendly
source that will be able to marginally contribute to Canada's electricity. Now it is a major industrial opportunity."

Hornung also said he sees the potential for the manufacturing of parts for wind turbines to become an important industry in Canada.

In a small way, that started when companies began making blades and assembling nacelles (the structures that house the generator and mechanical works at the top of the towers) in Quebec and another firm has announced plans to build towers at Fort Erie in the Niagara Peninsula.

That's only part of what's required, but the decisions indicate a growing level of interest, Hornung says. The Fort Erie plant alone will employ 100 when it opens, he notes.

More than 100,000 people work in the wind industry in Germany, Spain and Denmark, he said.
Ironically, the increasing popularity of wind as an energy source could delay the start of projects because of the backlog of orders for wind turbines.

Most of the parts for turbines being built in Canada now come from Europe or the United States. But the existing firms can't keep up with the exploding global market and are being pressed to expand. When they do build new plants, the firms will weigh Canada against a number of other countries in deciding where to invest in plants.

"In terms off sheer market size, Canada will have trouble competing against China, but Canada has an advantage because of its educated and skilled workforce," Hornung says.

Across Ontario, several wind farms are in various stages of construction.

In addition to the Melancthon One project, they include:

Erie Shores Wind Farm at Port Burwell, south of Tillsonburg.
Prince Wind Farm, near Sault Ste. Marie.
Blue Highlands Wind Farm at Blue Mountains, near Collingwood.
Kingsbridge Wind Power Project, near Goderich on Lake Huron.

So far, large players are dominating the field, but they aren't alone. Co-ops interested in developing wind farms are springing up.

In Perth County, Countryside Energy Co-operative Inc. is a Milverton- based organization with plans to harness wind power, reduce pollution and pump money into rural communities.

General Manager Doug Fyfe said he hopes construction starts by the spring of 2008 on the first of two 10-megawatt wind farms, each of which will require an investment of $20 million.

Fyfe says there is much investor interest in both projects, one to go at Goderich and a second near Milverton.

In some areas, co-ops are competing for sites with large companies such as Canadian Hydro.
The difference between the two isn't lost on Fyfe.

"We are going to have local investors and the vast majority of the money will go to local investors and that money circulates eight times within the community."

Fyfe doesn't see a problem attracting investors. Countryside Energy now has more than 57 members and a lot of people were interested even before the campaign to raise funds started.

"People see it as the way forward. They are tired of getting smogged out and oil prices are making people think. We can offer energy at stable prices and no pollution," he says.

Closer to home in Waterloo Region, a Baden-based co-op called LIFE (Local Initiative for Future Energy) plans to build a $20-million, 10-megawatt wind farm on Erb Street west of Waterloo. It's selling memberships for $175 and shares for $50.

LIFE president Linda Laepple said her group hopes to raise half of the money it needs through investors and get the rest at banks or credit unions. She said she figures that with prices set by the province, the venture should pay for itself in seven to 11 years.

Unfortunately, says Laepple, local opportunities are limited. There aren't that many prime sites for wind in this area and there is already competition for what sites there are.
Laepple's group is now testing its proposed site to make sure it has the potential to produce power. It's important, she says, for wind farms to be close to where the power will be used because as much as 20 per cent of the power can be lost in transmission over long distances.

Laepple said she figures the LIFE project will produce enough power from five 10-megawatt turbines to provide electricity for 4,000 homes.

Hans Ohlmann hopes wind power will help him to get back on his feet financially.
Until recently, his Ayr-based company, Ventax Robot Inc., manufactured robotic equipment for the automotive industry. But the downturn in the auto industry has left Ohlmann saddled with a huge debt and no business.

He now believes his future rests in wind energy and has invented a wind turbine that's dramatically different from those used on wind farms now.

Ohlmann holds an U.S. patent on what he calls a vertical axis wind turbine, a system he says is more efficient and avoids many of the disadvantages of the more traditional turbines.

Ohlmann says he needs to attract an investor or investors before going into production, but anticipates a day when he has a plant producing turbines and a workforce of up to 150 people.
Phil Schiedel, a longtime renewable-energy enthusiast, was so impressed with Ohlmann's design he contracted with him to erect a prototype on his property, not far from Ayr.

Schiedel hopes to have his turbine operating by the end of July and his timing appears to be good following the Ontario government's decision to pay independent producers 11 cents per kilowatt for wind power energy that is directed back to the provincial power grid.

"We knew there would be things in the works and felt it (wind) is an up and coming thing," Schiedel said.

"Environmentally, it makes sense to use renewable resources. The wind is always there and it will be there and your not using fossil fuels."

Schiedel says he also hopes to install solar panels.

"That would give me a complete package."

In addition to guaranteeing the price for wind power, the Ontario government is offering 42 cents for each kilowatt generated from solar energy.

Wind and solar energy systems complement each other. That's because when one system isn't working, the other likely is.

WIND FACTS
About 23 per cent of Ontario's power came from renewable energy sources in 2005, most of that from hydro (water-driven) power plants. Use of power from renewable sources is expected to grow to 40 per cent by 2015.

Wind power today accounts for about one half of one per cent of Ontario's electricity. The Ontario Power Authority hopes that grows to 15 per cent by 2025.

Nuclear energy accounted for 51 per cent of Ontario electricity in 2005. That's expected to remain about the same through 2025.

Ontario has 15 megawatts of installed wind-power capacity now and expects to have over 1,300 megawatts by the end of 2008.

The Canadian Wind Energy Association estimates Northern Quebec alone has wind capacity to produce 40 per cent of Canada's electricity needs, but experts believe the most that could be incorporated into the grid would be 20 per cent.

At the beginning of 2004, Canada had about 327 megawatts of installed wind power, enough to supply electricity to 100,000 homes. Producing that much power from conventional coal-fired plants would put 850,000 tonnes of carbon dioxide into the earth's atmosphere.

The Sierra Club of Canada estimates energy conservation efforts saved the average California family $1,000 on electricity bills in 2004 and prevented more than 16 million tonnes of carbon dioxide from being pumped into the atmosphere – equal to taking 12 million cars off the road.