The following statement was issued today by Lloyd Matthews, Minister of Mines and Energy. It was also read in the House of Assembly:

Wind Demonstration Project

I wish to provide the House of Assembly with an update on the Newfoundland and Labrador Hydro Wind Energy Demonstration Project. 

First of all, I am pleased to announce that Hydro has selected the NeWind Group to undertake a Wind Energy Demonstration Project in the province. 

NeWind is a consortium of firms including CHI Hydroelectric Company Inc., fga Consulting Engineers Limited and Quadratec Inc. The latter two are locally established Newfoundland companies. CHI is a subsidiary of ERGA which is a renewable energy company fully owned by the ENEL Group of Italy. This group has extensive experience in wind project assessment and development. 

This project is designed to determine if the wind potential in Newfoundland and Labrador may be used to our advantage through the generation of electricity.

This green, environmentally friendly energy source is used extensively throughout the world and has the potential to be very successful in our coastal climate. We hope that wind generation will be added to our list of future energy sources.

This selection of NeWind is the result of a Request for Proposals which was issued in December 2000 by Hydro. This project will be carried out in two stages:

• The work in stage 1 is comprised of a Feasibility Study which will be funded by the NeWind Group. The focus will be on site assessment and system optimization to determine if wind generation is feasible here. 
• The second stage will only proceed if wind generation is determined to be feasible and if a power purchase agreement is negotiated between Hydro and the NeWind Group. The project size, in the five to 25 Megawatt (MW) range, will be determined to balance the total cost and the cost per kilowatt-hour of electricity. When the Power Purchase Agreement is signed, work will begin to construct the demonstration project. The NeWind Group will be responsible for the ongoing operation of the project as well as data collection.

It should be noted that Hydro is not putting any capital into the project. NeWind will recover its cost through energy sales as the demonstration project proceeds. Nor will Hydro be guaranteeing any payments to NeWind; the company is accepting all the risk should the project fail to live up to expectations.

Utilizing this form of electricity generation in Newfoundland and Labrador has been made possible by new technologies which have lowered costs. Wind generation is now considered to be a proven source of renewable energy and is in widespread and rapidly growing use throughout North America and elsewhere. 

In addition to establishing whether wind is a potential future generation source, it is also possible that, depending on future oil prices, wind power could be used to offset fuel consumption at the Holyrood generating station on an economic basis. 

The project will provide information and experience which will assist Hydro in evaluating the potential of wind power for our remote communities.

Government will continue to evaluate future energy alternatives based on technology, economics, environmental concerns and demand forecasts.

In summary, this project is considered to be a prudent approach for evaluation of an alternate future energy source. The project will enhance the provincial capability to meet future electricity requirements in a timely and cost effective manner.

2001 04 11                                   2:40 p.m.