Transmission - Alberta refunds prompt withdrawals

NORTH AMERICA: Many less-viable or less-developed wind projects have quit a connection queue in Alberta after the system operator allowed them to back out without losing their application fee.

by Diane Bailey 1 April 2010

Alberta's connection queue has seen a significant fall in wind energy projects since the last quarter of 2009, when the Alberta Electric System Operator (AESO) offered companies a chance to drop off and receive back what had been a non-refundable C$50,000 application fee.

Thirty-seven projects totalling 5.7GW cancelled their applications, leaving 52 wind energy projects with a combined capacity of 7.5GW in line for connection.

Most of the cancellations came from developers who had filed applications for multiple projects they'd hoped to bring on over time, says Kelly Gunsch, AESO's vice-president of market services.

"In the interim, they've compiled wind resource data and have chosen to focus on specific projects," she says. "So they were actually removing projects from the queue that perhaps did not have as strong economics as others."

Jana Mosley, programme director for customer interconnections at AESO, says transmission constraints in wind-rich parts of the province helped prompt developers to stake out a spot in the queue for projects that were still at an early stage of development.

"We saw a rush for people to apply without real project plans," she explains.

Recession effect

But the economic climate has changed since the current interconnection process was implemented in 2006. "When customers applied back in 2006, things were really fired up, especially in regard to wind," says Mosley. "Investors were chomping at the bit to invest in wind projects and then we saw, obviously, a sudden shift late in 2008."

The queue clean-up will provide AESO with a far more accurate and realistic picture of the number of projects and megawatts looking to gain access to the grid. "A clearer queue helps us with planning. There's no question," says Gunsch.

A concern some wind developers have had is whether the project cancellations will affect planned transmission upgrades in southern and central Alberta, but Mosley says nothing has changed. "Right now, any of the active phases of those projects are still very much needed," she says.