A wind energy industry perspective

By Tim Kalinowski, Staff Writer

 

Alberta farmers and landowners may in some instances have concerns about having windpower generating sites on their land, but Robert Hornung, president of the Canadian Wind Energy Association, says in the vast majority of cases companies and landowners have enjoyed a mutually beneficial relationship.

“First off it is important to remember is that we have very positive relationships with landowners,” says Hornung. “Wind turbines cover a large area but the land that is actually utilized is relatively small amount within that area. There are ample examples of successful co-existence with producers… And clearly, there is a significant opportunity for landowners in terms of the economics.”

According to Hornung, Alberta is a very attractive prospect for his members, many of whom have international interests and holdings.

“Canada is now the seventh largest wind energy market in the world so it has attracted attention from many different corners,” explains Hornung. “And Alberta has always been a very attractive market in terms of its wind resources. And it also has a fairly, I think, positive history with wind energy in terms of the relationship with landowners and farmers.”

However, overall, Alberta continues to lag behind other jurisdictions in terms of development of its wind resources, he says.

“There is a recognition within the industry relative to other jurisdictions, globally and in the United States, Alberta has significantly under-utilized its wind energy potential at this point and time,” explains Hornung. “It represents about five per cent of electricity in Alberta. South of the border you have a number of U.S. states that have 10, 15 or even 20 per cent of their energy coming from wind energy.”

Pricing has also traditionally been a problem in Alberta, says Hornung. It is one of the only jurisdictions in Canada which does not offer guaranteed, long-term contracts at a fixed rate for wind companies building turbines. To this point, wind companies have been expected to compete in the open energy generating market at whatever the going price happens to be at the moment. That price in Alberta has been very low in recent years, so the economics just haven’t made sense for windpower developers.

However, says Hornung, that is all changing as the NDP government is looking to bring in some form of guaranteed, long-term commitment to renewable energy companies to encourage them to build in the province.

“That question of revenue certainty has been the biggest challenge for the Alberta wind energy market,” confirms Hornung. “The commitments the government of Alberta has made, and the targets it has set, have certainly caught the interest of the wind energy industry.”

According to Hornung, from a landowner’s perspective, this is an exciting time as well.

“There is a lot of interest right now in the Alberta market. I think landowners can expect there will be more people from our industry coming and knocking on doors. And in some cases they might have multiple companies coming in.

“That, I would argue, actually gives the landowners some leverage in terms of those discussions and negotiations. It’s  a good news story for the landowner if you got more than one person coming to the door.”

Hornung acknowledges, though, to alleviate concerns his industry has to be out front in addressing things such as long-term leases, site abandonment and the environmental impact of building turbines and generating sites.

“I think, at the end of the day, if you don’t have a broad base of support within the community it is very hard to have any sort of successful or sustainable project. I think that puts an onus on the wind developer to engage in meaningful and positive community engagement.”

A strong commitment to transparency and is also key to fostering those meaningful partnerships.

“That needs to continue throughout the life of the project,” says Hornung. “Once a project is up and operating there are still going to be issues and concerns that emerge. You can see more and more developers doing things like having standing committees within the community that exist throughout the life of the project where they can provide updates and address concerns.”

As for getting a good lease agreement which benefits both sides, it is important to be proactive.

“When a landowner is approached by a developer, and is given a land lease agreement to consider, it is important for that landowner to review that with a lawyer to make sure any concerns they have are brought forward and addressed to their satisfaction before signing any document,” states Hornung.

“From the perspective of the wind developer when they are developing a project, which today are sort of for the next 20 or 30 years, when that stops and they want to decommission that project there are two things the developer could do. A developer could take the project down and restore the land to the previous quality as best as possible; every developer is required to develop these sorts of decommissioning plans. Developers also have an incentive, because the wind resources are still there, to consider continuing, with the agreement of the landowner, by, for example, having newer turbines erected at the site.”

Hornung acknowledges that the windpower industry of the past did not always have the most sustainable of business models, but feels that situation has improved by leaps and bounds over the past decade. Companies going bankrupt and selling off their leases has become far less of an issue in recent years, and certainly far from the norm when it does still, rarely, occur.

“I think as the industry is growing and maturing this sort of thing is becoming less of an issue because the industry has gone through a lot of consolidation,” states Hornung. “You now have a smaller of larger players who are sort of the key players at this point who have clearly signaled we’re in this for the long-term. And that is different from ten years ago.

“I also think the competitive process that Alberta is moving forward with should provide some comfort for people in that respect because the companies that are most likely to be successful in that process are companies which are bring a lot of experience and a lot of knowledge to the table. It is increasingly challenging, I would say, for start-up or somebody who might potentially be perceived as a fly-by-night type of operation to actually succeed in securing these contracts that will allow them to build.”

The industry has also been doing more to address ecological concerns, says Hornung, and has made greater commitments to work with farmers when necessary to protect sensitive areas on their lands on a case by case basis.

“The industry works with the environmental guidelines that are set out by it by the government. Alberta has a set of wildlife directives for wind energy projects that essentially indicate areas where you and can’t develop these wind resources. And even in the areas where you can develop, we need to do ongoing monitoring and assessment and be reporting to (the government). And if there are concerns (companies) need to adapt their behaviour to address that.”

At the end of the day, says Hornung, if the landowner does not like what is being proposed by a generating company he or she can always say no to the project.

“To gain access to that land you need to build a relationship of trust,” states Hornung. “You need to provide an agreement that’s fair. And clearly, it needs to be something the farmer or landowner feels they are benefiting from adequately. A landowner can say no, and it certainly happens.

“But I think farmers really do have the opportunity to benefit from this, and certainly we have heard lots of times historically that I have been able to stay on my farm because I have this additional stream of income now. There are real positive and potential benefits. A farmer does have to realize it’s a partnership and it’s a negotiation though; and you do need to look out for your interest.”

Hornung acknowledges, though, to alleviate lingering concerns his industry has to be out front in addressing things such as long-term leases, site abandonment and the environmental impact of building turbines and generating sites.

“I think, at the end of the day, if you don’t have a broad base of support within the community it is very hard to have any sort of successful or sustainable project. I think that puts an onus on the wind developer to engage in meaningful and positive community engagement.”

A strong commitment to transparency and is also key to fostering those meaningful partnerships.

“That needs to continue throughout the life of the project,” says Hornung. “Once a project is up and operating there are still going to be issues and concerns that emerge. You can see more and more developers doing things like having standing committees within the community that exist throughout the life of the project where they can provide updates and address concerns.”

As for getting a good lease agreement which benefits both sides, it is important to be proactive.

“When a landowner is approached by a developer, and is given a land lease agreement to consider, it is important for that landowner to review that with a lawyer to make sure any concerns they have are brought forward and addressed to their satisfaction before signing any document,” states Hornung.

“From the perspective of the wind developer when they are developing a project, which today are sort of for the next 20 or 30 years; when that stops and they want to decommission that project there are two things the developer could do. A developer could take the project down and restore the land to the previous quality as best as possible; every developer is required to develop these sorts of decommissioning plans. Developers also have an incentive, because the wind resources are still there, to consider continuing, with the agreement of the landowner, by, for example, having newer turbines erected at the site.”

Hornung acknowledges that the windpower industry of the past did not always have the most sustainable of business models, but feels that situation has improved by leaps and bounds over the past decade. Companies going bankrupt and selling off their leases has become far less of an issue in recent years, and certainly far from the norm when it does still, rarely, occur.

“I think as the industry is growing and maturing this sort of thing is becoming less of an issue because the industry has gone through a lot of consolidation,” states Hornung. “You now have a smaller of larger players who are sort of the key players at this point who have clearly signaled we’re in this for the long-term. And that is different from ten years ago.”

He continues, “I also think the competitive process that Alberta is moving forward with should provide some comfort for people in that respect because the companies that are most likely to be successful in that process are companies which are bring a lot of experience and a lot of knowledge to the table.

“It is increasingly challenging, I would say, for start-up or somebody who might potentially be perceived as a fly-by-night type of operation to actually succeed in securing these contracts that will allow them to build.”

The industry has also been doing more to address ecological concerns, says Hornung, and has made greater commitments to work with farmers when necessary to protect sensitive areas on their lands, often on a case by case basis.

“The industry works with the environmental guidelines that are set out by it by the government. Alberta has a set of wildlife directives for wind energy projects that essentially indicate areas where you and can’t develop these wind resources.

“And even in the areas where you can develop, we need to do ongoing monitoring and assessment and be reporting to (the government). And if there are concerns (companies) need to adapt their behaviour to address that.”

The bottom line is, says Hornung, if the landowner does not like what is being proposed by the generating company he or she can always say no to the project.

“To gain access to that land you need to build a relationship of trust.You need to provide an agreement that’s fair. And clearly, it needs to be something the farmer or landowner feels they are benefiting from adequately. A landowner can say no, and it certainly happens.

“But I think farmers really do have the opportunity to benefit from this, and certainly we have heard lots of times historically that I have been able to stay on my farm because I have this additional stream of income now. A farmer does also have to realize it’s a partnership and it’s a negotiation; and you do need to look out for your interest.”