A bright future for green and clean energy

In Canada, each province manages its electricity sector, including pricing, assessing future requirements and setting and enforcing environmental standards.

National electricity consumption varies with economic activity but is expected to grow strongly.

Several provinces have opened their generation, transmission and distribution services to competition in recent years. Most allow independent producers to bid on new electricity generation requirements.

While Northland pursues project opportunities across Canada, we are currently focused on several provinces where the need for power is particularly robust and where major developments are planned or under way.

Ontario: Home to several Northland projects, Ontario opened its electricity market in 2002. One entity, Ontario Power Generation, operates the former Ontario Hydro generating assets. A second, the Ontario Power Authority (OPA), is responsible for ensuring an adequate long-term supply of electricity in the province.

Both the Ontario government and the OPA have taken steps favourable to Northland’s business. The OPA wants to phase out coal-fired plants by 2014 and it has requested bids on a number of gas-fired peaking plants to address high-demand periods and bottlenecks. The government passed the Green Energy Act (GEA), which creates a feed-in tariff program (FIT) and a streamlined approval process and priority right to connect for green energy projects. Prices under the FIT are intended to encourage new green energy sources.

Quebec: Northland is also active in Quebec, where Hydro-Québec has broad powers to generate and distribute electricity. The Régie de l’énergie (“Régie”) is the provincial electricity sector regulator and is responsible for approving Hydro-Québec’s supply plan. Under the current plan, Hydro-Québec must meet its future supply growth by calling for tenders among interested independent power suppliers. Under regulations issued in 2008, Hydro-Québec is requesting proposals for wind projects in two categories: community projects and aboriginal projects.

Saskatchewan: This province is another Northland market. SaskPower, a vertically integrated utility, opened its transmission grid to third-party producers in 2001. Currently, Saskatchewan generates most of its power from aging coal-fired plants, which will need replacement starting in 2013. Because of strong economic activity, SaskPower estimates growing need for electricity and has invited independent producers to bid on baseload and peaking needs using gas-fired technology. The province has recently completed a wind power strategy review and is acquiring new wind power capacity.

Federal regulatory initiatives: The Government of Canada has committed to reducing greenhouse gas (GHG) emissions by 20% from 2006 levels by 2020. The plan includes 18% reductions at existing electricity generating facilities.

Options for achieving these targets include market-based cap-and-trade programs and various forms of carbon taxes. Some of these measures will be enacted in the coming years and will benefit our business.

U.S. and abroad: The United States and some EU countries, notably Germany, are also pursuing clean and green energy policies favourable to Northland’s business.