Nova Scotia to House Daewoo's Wind Turbine Towers and Blades Production Facility

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Researched by Industrial Info Resources (Sugar Land, Texas)--The province of Nova Scotia, Canada, has been selected by leading shipbuilding and offshore contracting company Daewoo Shipbuilding & Marine Engineering (SEO:042660) (DSME) (Seoul, South Korea) as the site for the firm's North American production center for wind turbine towers and blades.

Nova Scotia and DSME have signed a shareholder agreement that spells out each party's equity investments. While DSME will hold the 51% majority stake and invest $20.4 million, the province will hold a 49% stake and invest $19.6 million. The project's board of directors will include a representative of the province and will provide the project with the necessary startup funds, a working capital, and a loan to purchase equipment and acquire the necessary land and buildings.

The facility will be set up in Trenton in Pictou County, and is expected to create up to 500 direct employment opportunities. The facility is expected to begin operations by the fall of 2010.

The partnership is indicative of the province's efforts to expand sources of foreign direct investment by focusing on emerging markets, such as those of Asia. According to Nam Sang-Tae, the chief executive officer and president of DSME, Nova Scotia was selected because it presented the right mix of efficient transportation systems, a skilled workforce, competitive costs, and a variety of energy sources such as tidal and offshore wind. Most importantly, the support from the government of Nova Scotia was a major factor that affected the company's decision. DSME also signed a deal with the province under which it will explore the possibility of setting up tidal and offshore wind energy projects.

The Canadian government has announced plans to invest $10 million in the $90 million project. The funds will be extended through the federal government's Atlantic Canada Opportunities Agency (ACOA) (Moncton, New Brunswick) and will include a repayable loan of $5 million and a contribution of $5 million for improving the adjacent lands.

Reports published in February indicated that DSME might house the production center in the closed TrentonWorks railcar plant. The 7-hectare factory was earlier owned and operated by Greenbrier Rail Services (GRS) (Lake Oswego, Oregon). The factory was closed in 2007 for financial reasons.

The province of Nova Scotia has a high potential for generating energy from renewable resources. However, most of its tidal, wind, bio and hydropower potential remain untapped. As per the province's mandatory Renewable Energy Standards (RES) that came into effect from February 2007, Nova Scotia intends to meet 18.5% of energy needs from renewable resources by 2013. A major part of that energy is expected to be contributed by wind power. The province currently operates 41 wind turbines, with a combined installed capacity of 60 MW. The province plans to have more than 300 such installations by 2013.

The lack of a major river system and the geographical terrain has limited Nova Scotia's ability to tap hydropower. Other than the 230-MW plant at Wreck Cove in Victoria County, most of the operating hydropower plants are small-sized. The province currently obtains 400 MW of energy from its hydropower facilities, which include two privately operated plants.

Research indicates that the Bay of Fundy in Nova Scotia is perhaps the most promising site for generating tidal energy. According to estimates, the new in-stream tidal technology that involves the positioning of tidal devices in the flowing tidal stream to harness kinetic energy may be capable of generating 300 MW of clean energy from just two locations in the bay. The technology still requires some fine-tuning before it can be implemented on the ground.

Nova Scotia is currently assessing the bioenergy potential of the province. A proposed federal biofuel regulation requires that by 2010, gasoline must have a 5% renewable content and by 2012, diesel/home-heating fuels must have a 2% renewable content. The feasibility of setting up a biorefinery industry in the province is also being evaluated.

The province currently meets 3% of its energy needs from mine-water based heat pump systems. Nova Scotia does not have the potential to generate geothermal energy from conventional hot springs.

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