Canadian Hydro Developers Acquires Rights for 4,400-Megawatt Offshore Wind Prospect in Ontario

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Researched by Industrial Info Resources (Sugar Land, Texas)--Canadian Hydro Developers Incorporated (TSX:KHD) (CHD) (Calgary, Alberta), Canada's leading independent developer of renewable energy, has announced that it has acquired the rights to the 4,400-megawatt (MW) offshore wind prospect from Wasatch Wind Incorporated (Park City, Utah), a private renewable-energy firm. The agreement with Wasatch is subject to due diligence, and no financial terms were disclosed.

The wind power facility is situated between 5 and 30 kilometers offshore in the Great Lakes, along the border of Ontario. Upon completion, it will have the capacity to supply electricity to more than 2 million homes, potentially making it the world's largest offshore wind power facility.

Before commencing work on the project, CHD first must obtain regulatory environmental permits and approvals, as well as suitable financing. The Ontario Ministry of Natural Resources also must release the site for development. Assuming all conditions are met, CHD will build the wind park in stages, with the first stage anticipated to generate 400 to 500 MW, beginning power generation by the last quarter of 2014. To date, no scheduled project completion dates have been announced.

The site for the project is close to an available connection for power transmission, with net capacity factor estimated to be 40%. In addition, it is eligible to benefit from the Ontario Green Energy Act, with a 20-year feed-in tariff contract at a price of $175 per megawatt-hour (MWh). This is subject to 100% of the Ontario consumer price index (CPI) inflation from the date of the contract signing until the beginning of commercial operations, and 20% of the Ontario CPI each year thereafter until the end of the contract.

Ontario, which is Canada's biggest energy consumer, is widely regarded as being eco-friendly and has determined that it will totally eliminate coal-fired generation of electricity by 2014. In June this year, it announced that it was scrapping plans to build two nuclear-reactor power plants because of financial worries and uncertainty about the future of the federally owned Atomic Energy of Canada Limited (Mississauga, Ontario).

Earlier this month, Ontario announced plans to invest $2.1 billion during the next three years to expand and update its power transmission grid, which is necessary to take advantage of renewable energy sources. It also was revealed this month that the Ontario Ministry of Energy and Natural Resources is in discussions with Samsung Corporation (Seoul, Korea) about plans to build a 200-turbine wind farm on the north shore of Lake Erie.

CHD is the leading developer of EcoLogo-certified renewable energy power sources. It has developed, owns and operates 21 renewable energy power facilities in Alberta, British Columbia, Quebec and Ontario, using wind, solar and biomass technologies. It has a net operational generating capacity of 694 MW, with a further 160 MW of power generation capacity nearing completion and more than 6,000 MW of power projects in various stages of development.

In July this year, CHD received a takeover offer from TransAlta Corporation (NYSE:TAC) (Calgary, Canada). However, the board of CHD recommended that shareholders reject the TransAlta offer, and earlier this month announced that it had received several further offers from different parties, which are currently being reviewed.

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