Winds of change blowing on Wolfe Island

In 2007, Kingston’s island paradise will become the site of a wind farm. In the first of a two-part series, the Journal talks to the Queen’s grads behind the innovative $410 million project

Ian Baines, Sci ’74 and a driving force behind the upcoming Wolfe Island wind farm, stands in front of a wind turbine on display at the Canadian National Exhibition. Those scheduled to be erected on Wolfe Island in 2007 would be similar, but smaller.
Ian Baines, Sci ’74 and a driving force behind the upcoming Wolfe Island wind farm, stands in front of a wind turbine on display at the Canadian National Exhibition. Those scheduled to be erected on Wolfe Island in 2007 would be similar, but smaller.
Photo courtesy of Ian Baines
The “flat” and “exposed” terrain of Wolfe Island was deemed perfect for a wind farm.
The “flat” and “exposed” terrain of Wolfe Island was deemed perfect for a wind farm.

During the many years Ian Baines, Sci ’74, spent knocking on doors seeking financial and political support for his renewable energy initiatives, he got used to a particular reaction from government and business staff.

“Over the course of 16 years I have many, many, many memories where people just looked at me pityingly and said, ‘You’re one of those tree hugger idiots,’” he said.

Not so on Nov. 21 of last year, when the Ontario government announced that a firm Baines started in the early 1990s was part of a winning bid to build a wind farm on Wolfe Island.

That company, the Canadian Renewable Energy Corporation (CREC), was purchased last January by the Alberta-based Canadian Hydro Developers. Canadian Hydro, in turn, partnered last year with Hearthmakers Energy Cooperative and the Kingston-based Gaia Power Inc.—which was founded by former Saskatchewan Power plant engineer Samit Sharma, MBA ’01—to develop the project.

Baines said the project was made possible not only by the participating companies’ technical work, but also by a convergence of market forces and political will that has recently made alternative energy projects more viable.

“This project was leading the government,” Baines said. “Wolfe Island was in the works long before the government was looking to buy power.”

During the 1990s, he said, the Ontario government was convinced that an Ontario Hydro monopoly was the best option for provincial energy. He said the government was actively working against his efforts and those of a handful of other renewable energy lobbyists who were also sitting on government energy advisory boards.

“We knew the idea was good, but the politics of the day couldn’t see beyond nuclear and coal,” he said.

Things changed when the most recent Liberal government took office, he said, thanks to Premier Dalton McGuinty’s “personal fixation” on phasing out coal plants.

“It took the premier to come in and say, ‘I want the end of coal in Ontario,’ ” Baines said.

“Also, Ontario ran out of electricity. ... We’re importing it heavily from the States, we’ve had a big blackout and we could have other ones.”

The resulting need to diversify energy sources has proven a major boost to small-scale energy producers, said Gaia Power’s Sharma.

According to Sharma, who said he became interested in renewable energy through his academic projects at Queen’s, it was nearly impossible until recently to attract financing for such initiatives because there was no market for their product.

Ontario Power Generation controlled—and still controls—about 80 per cent of the province’s electricity producers. Many of these are Crown assets whose fixed costs have been paid off, which lowers their production costs, Sharma said.

In 2002, following Alberta’s lead, the Ontario government deregulated the electricity market, only to cap rates several months later. In doing so, it put many small electricity producers—whose costs were above the capped rate—out of business, Sharma said.

But in 2004, the Liberal government passed Bill 100, the Electricity Restructuring Act, which committed the government to buying a proportion of the province’s power from cleaner energy sources.

That same year, the government sent out a request for proposals for renewable energy projects, pledging to buy a total of 300 megawatts of power, with no more than 100 coming from any single project, Sharma said. In 2005, the government raised the bid ceiling to a total of 1,000 megawatts, with a 200-megawatt ceiling on each project.

After the implementation of the new ceilings, Canadian Hydro approached Gaia about submitting a joint bid, which would keep their fixed costs down and allow them to sell wind energy at a competitive price. The resulting project comes in just under the 200-megawatt ceiling.

“We thought that it would be prudent if we made a joint submission,” Sharma said, noting that stand-alone bids by both companies the previous year had not been successful. “One thing we realized was that on Wolfe Island, because of its remote nature, you had to have a certain size of the project to make it viable.”

The current government purchasing policy is likely to encourage more renewable energy production by providing a 20-year guarantee that there will be a market for small-scale electricity, Sharma said. That commitment will make it easier for energy entrepreneurs to attract project financing.

The average price of bids in this year’s round of electricity purchases was just over eight cents per kilowatt hour, Sharma said, a rate likely to remain stable because of the nature of wind energy.

“[The government’s promise] basically provides you with long-term price stability,” Sharma said. “That is the power that the Ontario government is purchasing for the next 20 years, whereas natural gas could be 10 cents today and 12 cents tomorrow, you don’t know.”

Sharma said similar bidding systems are in use in other Canadian provinces, including Quebec, Nova Scotia, New Brunswick and Newfoundland. He added he thinks the model and the political climate surrounding energy use are changing the way energy is created in Ontario.

“I think public pressure will lead to more power generation from renewable sources,” Sharma said, pointing to mounting public concern over recent climate patterns. “Something is happening in the environment in terms of the carbon, in terms of the economy that we have ... I think the public is saying enough is enough, we have too many smoggy days.”

Baines said a similar line of reasoning prompted him to begin working in renewable energy. Soon after leaving Queen’s with a degree in electrical engineering, he began a 14-year career in the steel and mining industry.

“I was horrified at the pollution I saw, and I decided that I was going to do something to reduce pollution,” he said. “It’s your classic environmentalist story.” Baines then struck out on his own, investing thousands of hours and dollars of his own money on renewable energy prospects. Despite his inexperience in business management, he formed a successful corporation building co-generation plants, where the warmth produced by an electricity generator is used to heat buildings.

That company, Marsh Energy, hired 25 people off employment insurance rolls to staff a plant in downtown Cornwall, Ont., Baines said. That location in the city’s centre allowed the company to slash the power transport costs for major public buildings, he added.

“[The plant] is right in the middle of a downtown neighbourhood, within 100 feet of a kitchen table, and it’s absolutely dead quiet,” Baines said.

Baines—who said entrepreneurial ventures can’t last long before they either go under or are purchased by a larger entity—has since sold Marsh Energy. Before then, though, he had already moved on to a new idea.

“I very vividly remember going through a renewable energy trade show [in 1993] and seeing a large commercial wind turbine,” Baines said. “And my first thought was, wow, is that ever a brilliant idea.

“And the second thought was, where could such a thing work in Ontario?”

The answer to his question wasn’t long in coming. On his way back to Toronto from the Cornwall plant, Baines stopped in Kingston and strolled along the waterfront, thinking about how to make a wind power project happen. He said it wasn’t long before Kingston jumped into his head as a prime possibility.

“Two things came to mind,” he said. “One was, I knew the town and it was always windy, and the second thing was that like all students, I’d cycled across Wolfe Island. It’s flat, it’s exposed, and [I figured] the farmers probably wouldn’t mind having the turbines in their fields.”

Baines formed the Canadian Renewable Energy Corporation and raised $10 million in financing for wind power projects. Over the past 12 years, he said, he has used the funds to lay the groundwork for a wind energy project, monitoring wind levels on the island, doing geotechnical drilling studies, securing land for turbines and investigating ways to connect the project to the provincial power grid.

He said his technical education was part of what made the project possible.

“You have to have the professional qualifications so [people] take you seriously,” he said, adding that one of the project’s major challenges was the concrete research required to demonstrate its feasibility.

Baines said he hired and trained other engineers for the project and even took advantage of the Queen’s internship program, hiring an undergraduate engineering student to spend 16 months monitoring the wind on the island.

During those years, Baines said, he also submitted repeated proposals to Ontario Hydro to find a way to sell the energy. In 1996, he led a class-action lawsuit against Ontario Hydro on behalf of all renewable energy providers in the province to try to force the utility to buy energy. The suit was eventually defeated.

He was still also investing his own time and money while raising two children on his wife’s salary, he added, which continually prompted him to question what he was doing.

“Nobody, including me, could have known how long it would have taken to get to this point,” he said.

Throughout the process, Baines held bi-annual public meetings on Wolfe Island, and as he predicted, he said, some of his strongest backing has come from Island residents.

“The farmers, right off the bat, saw the logic,” he said. “They may have thought I was crazy, but they never said it. The bankers told me I was crazy.”

Baines said wind power has been used for years in the United States and Europe, but has been slower to set sail in Canada. Even though the Wolfe Island project has been approved, the turbines won’t be installed until 2007 because of the assessment and approval it must undergo at all three levels of government.

“There are environmental screening processes at both the federal and provincial levels,” said Geoff Carnegie, manager of Ontario projects for Canadian Hydro. “And there’s the municipal process on top of that, which includes Official Plan amendments, re-zoning applications and site plans.

“We’re working ourselves through that process right now,” he said.

The final sites for the 86 turbines have not yet been finalized, Carnegie added.

Still, Baines said he’s optimistic these days that renewable energy will soon have a much stronger presence in Ontario now that the political will exists to make it happen is there.

“You just have to keep going back to them and saying there is a better way ... and eventually, somebody listens,” said Baines, now the chairman of the Ontario Waterpower Association. “It’s an endless prodding and pushing and showing the government that it’s possible.”

—With files from Brendan Kennedy

Wolfe Island wind farm

When was the project approved?
Nov. 21, 2005

How many wind turbines will be installed on Wolfe Island?

How much will the project cost?
$410 million.

How much electricity will the wind plant produce?
The turbines are 2.3 megawatt turbines, which will generate about 537,000 megawatt hours per year of renewable electricity. This amounts to enough electricity to power 75,000 average Ontario homes, which is about half the electricity used by the Kingston area. Over the next 20 years, the plant’s total output will amount to approximately $1 billion worth of electricity.

Who is the developer?
Canadian Hydro Developers, a private company, will build, own and operate the wind plant. The group recently purchased the Canadian Renewable Energy Corporation (CREC), and partnered with Gaia Power Inc. and Hearthmakers Energy Cooperative to make a single bid for the project.

Where will the power go?
The power will be purchased by Ontario Hydro and injected into the provincial grid.

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