It’s a gorgeous fall day in the Hecate Strait, and the water is uncharacteristically calm. Gulls hover around a chartered aluminum seiner boat, humpback whales ply the waters nearby, and crab-fishing boats dot the horizon.

But Rick Birch, an oceanographer on the boat, is not so much absorbed by the scenery and wildlife as by the $40,000 instrument he’s dropped over the side. It’s no longer visible, and is probably settling into the sea bed about 20 metres below. It’ll be months before it sees air again.

Most visitors would not know that this relatively shallow area, about 20 kilometres off the northeast tip of Haida Gwaii, is called Dogfish Banks. But the Haida, who include it in their claim of traditional territory, are well aware that it is part of the Haida Energy Field, an area of ocean where robust winds average 36 kilometres per hour, sometimes reaching speeds over 160. This untapped resource ranks among the world’s 10 best wind power locations; its potential power output, according to a company that hopes to develop the resource, is thought to be equivalent to all energy sources in the Peace and Columbia valleys combined.

Thanks to a sturdy 5-ft square aluminum base and total weight of 700 lbs., the instrument appears to have settled properly on the seabed. This pleases Birch. His firm, ASL Environmental Services, has been contracted by NaiKun Wind Development Inc., which in turn has a permit to explore a 550 square kilometre area of the Haida Energy Field.

The instrument Birch has deployed is an acoustic doppler current profiler; for the next six months, it will measure current velocities and wave heights, periods and directions. If all goes well, it will yield critical information that will bring a plan to develop Canada’s first offshore wind farm a step closer to reality.

Progress, yes—but this quiet scene, which took place last Oct. 30, is quite different than what was envisioned as recently as 2002. At that time, Vancouver-based Uniterre Resources Ltd. spoke of its intention to start construction of a 300-turbine offshore wind power project as early as 2004. With an estimated cost of $1.5 billion, the project would provide 1,000 jobs for four years, and “significant economic benefits to the region, including the possible manufacture of parts of the installed facilities,” according to Uniterre.

Here in the Hecate, no wind project construction is happening yet, environmental assessments remain to be completed, and there’s no sign of an agreement from BC Hydro to buy power from Uniterre—which changed its name to NaiKun Wind Energy Group in November. And funds from the expansion of a federal government program offering incentives for wind-power development, approved in the 2005 federal budget, have been frozen by Steven Harper’s Conservative government.

What happened? Has the wind gone out of NaiKun’s sails?

Hot Air?…or Getting There

You’d be forgiven for wondering if the project sounds too good to be true.

As conceived and promoted, the five-phase project will comprise up to 300 turbines. The first phase, with up to 100 turbines, would generate about 350 megawatts annually—enough to power about 120,000 homes.

The complete 1,750 megawatt project would dwarf any wind power project in Canada today—producing enough power for 600,000 homes. To put this figure in perspective, consider that Canada’s entire wind power sector currently generates enough power for 315,000 homes.

The whole works will be connected to the power grid by cables laid six feet deep in the ocean floor and running all the way to Prince Rupert.

Although mounted on 250- to 350-ton concrete foundations and towering some 20 stories above the water, the steel turbines would be barely visible from Haida Gwaii—reducing the likelihood of anyone’s “not in my backyard” reaction.

Turbine-associated noise is estimated by Environment Canada to be quieter, at a distance of 200 metres, than a normal suburban residential area. For humans living several kilometres away, it shouldn’t be an issue.

Concerns that the 45-metre blades will act like big seabird blenders are likely unfounded. Recent international studies suggest that design improvements make turbines far easier on birds than your average house cat, and groups like the David Suzuki Foundation agree that wind power poses far less danger to birds than do consequences of the alternative: carbon-producing power sources.

Wind power projects are typically costly to build, and the NaiKun Wind Farm is no different. The company expects to spend $4 to 5 million for each turbine, or about $900 million to get its first 300-megawatt phase in motion. But once in place, they’re relatively cheap to run. And they don’t have to consider one of the most critical, and most predictably expensive, factors of production: fossil fuels.

“It’s called ‘fuel price risk’,” explains NaiKun President Ray Castelli from his office in Vancouver. “If you have a power source that requires fuel to operate for the next 25 years, you’d better be right about guessing fuel prices during that time. Unfortunately, most people don’t have that crystal ball. With wind, we do. There is no ‘fuel price risk’…[because] the wind is just going to keep on blowing.”

Future expansion could be accomplished relatively easily, in increments, simply by duplicating existing turbines.

With some key details still to be worked out, including an exact location within the Haida Energy Field, the jury’s still out on potential environmental and social impacts of the project. And there remains the big question of transmission capacity: existing lines from Prince Rupert to Prince George could accommodate energy generated from the project’s first two phases, “but beyond that we’d have to figure out with BC Hydro where we would get additional transmission capacity,” says Castelli.

One thing’s for sure: if natural gas-fired electricity were replaced by NaiKun’s carbon-free wind power, Canada’s greenhouse gas emissions would be reduced. According to NaiKun’s website, this reduction would be approximately 800,000 tonnes of carbon dioxide annually.

Powerful signs

Gazing out at the Pacific from the windows of NaiKun’s 17th-floor office, Castelli emanates optimism that the stars are in fact lining up for the company as never before. The project dynamics haven’t really changed much in the past few years, he says, but one critical factor is now in place.

“In the past year, the BC government has decided that it wants the province to be self-sufficient [in power production], and that 50 percent of that will be renewable, clean power,” relates Castelli. “BC Hydro’s most recent energy call, completed in July, made clear that it is finally willing to pay for energy at a level that we consider realistic.”

BC, blessed as it is with hydro-electric power, has lagged behind every other Canadian province in its adoption of wind power. This is changing as government faces up to the cold reality of a looming domestic energy crisis. “This province used to have an electricity surplus that taxpayers benefited from—until 2000,” says Castelli. “Today, BC is importing 13% of its load.”

Castelli refers to a November 2005 report by the BC Progress Board, a Liberal government-created panel which monitors the province’s economic health. “It states that BC will need 30,000 gigawatt-hours more electricity [than it can supply] in next 20 years,” says Castelli. “How are you going to fill that gap?”

Clearly, a mixture of sources will be needed. Possibilities include wind, solar, tidal, geothermal and biomass, combined with more efficient energy use.

Castelli says BC Hydro needed convincing that wind power, more variable than other sources, can be successfully integrated into the power grid to relieve BC’s strained hydro reserves. “It took us a few years to explain … how Denmark has integrated 20% of its load from wind without causing any major issues for power generation.”

In addition, BC Hydro is getting the message that taxpayers want to see it happen. Its own study of public opinion found that 94 per cent of British Columbians see wind as the preferred source of new energy development, while only 51 per cent support additional electricity being produced by natural gas-fuelled power plants.

Also in NaiKun’s favour is the fact that the costs of generating electricity through wind are going down, thanks to design improvements: one industry source reports that the cost per kilowatt-hour is less than 30% of what it was in the early 1990s (6 to 12 cents per kilowatt-hour); U.S. and British government studies predict that it will drop still further, to 3.5 to 5.5 cents per kilowatt hour by 2020.

In 2004, BC Hydro inked its first agreement to purchase wind power, from a 45-turbine, 58.5-megawatt wind farm on Vancouver Island.

The Subsidy Debate

According to Castelli, NaiKun has followed fairly traditional routes to find investors—and faces the same challenges as any new, unproven development. “You simply go out there and beat the bushes…raise enough to do development phase by phase,” he says. “There’s a lot of interest in it right now.”

Ironically, investment by the private sector, and the provinces, is one of the very reasons why some critics, like the CD Howe Institute, believe wind power development should not be subsidized by the government of Canada.

In a May 2006 paper titled Burning Our Money to Warm the Planet, the Institute argued that federal subsidies such as the Liberals’ Wind Power Production Initiative (WPPI), which offered 1 cent per kilowatt-hour produced from wind, is ineffective because investment by private interests and utility companies will make wind power happen anyway. By subsidizing an emergent industry which is experiencing explosive growth (in 2006, Canada’s installed wind power capacity doubled over the previous year’s rate), taxpayers are offering a “free ride,” the report claims.

The Harper government has since frozen funds associated with an expansion of the WPPI, which had been approved in the 2005 budget, while it drafts its new policy on wind energy. The Canadian Wind Energy Association (CanWEA) is pressing the government to restore the initiative, which is a key factor in the viability of projects that have already attracted billions in investment from the private sector.

“The uncertainty around WPPI expansion raises the very real possibilities of stranded investments that put future projects at risk,” warned CanWEA President Robert Hornung in a letter to Prime Minister Harper last August. “The current uncertainty around federal support for wind energy raises the possibility of Provincial Governments revisiting and scaling back their plans for wind energy development.”

In any case, the wind power sector is not the only one criticized for receiving taxpayer support. According to the Pembina Institute, the federal government offers $1.4 billion annually in tax breaks (such as the Accelerated Capital Cost Allowance for oil sands exploitation) to Canada’s highly profitable oil and gas industry. In fall 2005, a coalition of environmental groups formally petitioned Canada’s Auditor General to investigate this.

Federal Liberal Leader and former Liberal environment minister Stéphane Dion also questions subsidies to this industry, which he calls the “single biggest driver” of Canada’s increasing greenhouse gas emissions. His recently penned 53-page energy and climate-change plan notes that the “profit margins associated with these projects no longer justify their current preferential tax treatment.”

NaiKun’s Castelli is reluctant to compare subsidies offered to different energy sectors. But he responds this way to critics of incentives to wind power production: “[Wind power development subsidies] will make it happen faster.”

He speaks about Canada’s goal of reducing its greenhouse-gas emissions. “If you can take a few million tonnes of CO2 out of the environment every year through wind power, we’re that much closer to your goal.”

The federal government’s new wind power policy is expected in early 2007.

Next steps

While ASL Inc.’s wave and current monitor silently records data in the depths of Dogfish Banks, NaiKun is getting its other ducks in a row: detailed measurement of the wind in Hecate Strait, a seabed survey for positioning the turbine foundations, a geotechnical program to determine the underwater cable route.

These are all pieces that will refine NaiKun’s bid in BC Hydro’s next call for proposals, expected in mid-2007. If successful, NaiKun will acquire the holy grail of independent power producers: a power purchase agreement with BC Hydro.

Of course, a thorough environmental review and discussions with all communities and stakeholders will also be required, as well as approvals from all levels of government, including the Haida.

“We have a working relationship with NaiKun, and so far they’re cooperating with our concerns and taking the environmental steps we see as necessary,” says Arnie Bellis from Masset in Haida Gwaii. He is president of the Haida Power Authority (HPA), which is studying the NaiKun proposal with a view to issuing recommendations to the Council of Haida Nations.

Bellis says the Haida are looking at the project from all angles, including possible impacts on crab fishing, birds, and employment. The HPA and NaiKun are discussing what level of ownership the Haida might enjoy in the project’s operating company, and how many long-term service/maintenance jobs might be available to them (unofficial numbers suggest as many as 80).

His nation’s flag hangs in NaiKun’s office—the company’s gesture of acknowledgment and respect, says Bellis.

“I know [Ray Castelli] is [formerly] from Prince Rupert. He’s a professional, he’s pretty up-front, and that’s all we’d ask for.”

According to NaiKun, the wind farm would be built over a two-year period, with energy production to occur as early as 2009.

“Research commissioned from [BC communications firm] Hoggan and Associates shows that people strongly associate images of wind power with sustainability,” relates Castelli. “But public opinion, in and of itself, won’t get projects built. You need proper environmental impact and engineering studies in place. We’re not taking any shortcuts.”

© Larissa Ardis 2007