Apr 19, 2011
OTTAWA/VANCOUVER (Reuters) - Canada's green energy-friendly province of Ontario is putting up millions of dollars to tempt First Nations groups into the renewable power sector, and deep-pocketed investors are joining their development deals.
Faced with aging power plants and a desire to move away from dirty energy like coal, Canada's most populous province, is increasingly turning to the sun, wind and biomass to help it meet future electricity needs.
The province offers developers of green energy projects the richest set of guaranteed prices for their power in North America. First Nations groups get a premium if they own at least a 10 percent stake in a project, and they can also tap an aboriginal loan guarantee program.
"This is not a small sector for Aboriginal interests," said Chris Henderson, president of Lumos Energy, a First Nations clean energy advisor, and coordinator of the Aboriginal Clean Energy Network, an information exchange.
"About 40 percent of Canadian electrical generating capacity has to be replaced in the next 20 years... Aboriginal communities will be in the game."
The push into green energy has given Ontario a fresh avenue to try to create jobs and boost development on often economically depressed and remote aboriginal reserves.
13 PERCENT GREEN TARGET
Ontario targets 13 percent of its energy supply from wind, the sun and bioenergy by 2018, up from three percent now.
Other provinces, notably British Columbia and Quebec, are also trying to encourage aboriginal green energy involvement.
The Ontario Power Authority has offered long-term power purchase contracts to at least 17 aboriginal-led or partnered projects under a green energy program launched in 2009.
"I think there are going to be many more of these types of deals," said John Brace, Chief Executive of Northland Power Inc, which recently joint ventured with aboriginal company Mnidoo Mnising Power on a 60 megawatt wind farm on Ontario's Manitoulin Island, enough to power 17,500 homes.
Aboriginals access to land represents a draw for developers facing a not-in-my-backyard attitude from urban property owners who fear land values will drop if fields of wind turbines or solar panels are erected nearby, said SkyPower Ltd's Chief Executive Kerry Adler.
"(Aboriginal groups) control access to more land than all companies in Canada combined... Renewable energy, be it wind or sun, is about land," Adler said.
SkyPower, a privately-owned solar power company, recently leased land in Thunder Bay in northern Ontario from the Fort William First Nation to develop a 10 MW, 45,000-solar panel power project.
Treaties and court decisions have given Canada's aboriginal people a powerful say in development of large tracts of land they lived on before Canada was colonized.
Developers, aware of a history that includes dark chapters, such as the displacement of Aboriginals for big Quebec hydro projects, are trying to involve communities from the start, said Tim Weis, director of renewable energy and efficiency at the Pembina Institute environmental think tank.
NEED FOR PARTNERS
But it is still tough for typically small Aboriginal groups to access capital at favorable rates and find home-grown expertise to help develop clean power projects.
"It just makes sense for them to partner with experienced groups. It's a lot more cost effective if you're ordering 100 turbines versus ordering 10," said NCP Northland Capital Partners clean energy analyst Tania Maciver.
Nigig Power Corp, set up by the Henvey Inlet First Nation of Georgian Bay is weeks away from announcing a multinational partner for a C$1 billion ($1 billion), 300 MW wind project in northern Ontario, company president Ken Noble said.
Noble said the project would never have been competitive without 1.5 Canadian cents per kilowatt "price adder" for Aboriginal participation projects on top of the 11.5 Canadian cents per kilowatt Ontario pays for on-shore wind energy.
Nigig may also tap Ontario's C$250 million loan guarantee program to help finance the project, which Noble said will transform the small community of 500.
"It is more than we ever dreamed possible... There will be more employment than we have people. Our welfare department will be shut down. We will be creating an economy from scratch," he said.