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Mathew Ingram

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Blowing in the wind

Mathew Ingram

  

The best thing about investing in the environment - wind power, solar power, hydro etc. -- is that you know it’s always going to be there, at least for the foreseeable future. It’s unlikely that the sun is going to stop shining (and if it does, we will all have more important things to worry about than our investments), and in some parts of the country the wind never seems to stop blowing. So why not invest in it?

That’s easier said than done, unfortunately. For the most part, wind projects are either small, community-owned ventures or large-scale installations owned by giant power and energy producers. One of the largest producers of wind power in North America, for example - and likely the world - is Florida Light & Power, the giant U.S. utility.

But it also owns nuclear power plants and gas-fired electrical generating stations in addition to running several dozen wind farms.

General Electric, one of the world’s largest companies, is also a major player in the wind power business, since it manufactures a significant number of the giant turbines that are used in wind power installations. But it doesn’t sell shares in its wind subsidiary, so you have to buy all the other things that come along with GE: the automotive financing subsidiary, the NBC television network, and so on.

On the smaller end of things are community projects such as the Scotian Windfields, a network of eight wind-power projects in eight communities in Nova Scotia. Shares in the network are sold in the form of Community Economic Development Investment Fund or CEDIF units, sold under a Nova Scotia tax credit incentive program. They are eligible as an RRSP contribution and a tax refund of up to 30 per cent (if held for 5 years) but only if you are a resident of Nova Scotia.

Also on the community end of the investment spectrum is a venture called WindShare, which co-owns and manages the giant wind turbine at the Canadian National Exhibition in Toronto (along with Toronto Hydro). The co-operative investment program raised funds for the CNE windmill, and since it was financed has been raising money for a second project in Toronto. A proposed turbine at Ashbridge’s Bay was cancelled after the Toronto Port Authority denied approval, but WindShare says it plans to build another project near Lake Huron, in co-operation with the Countryside Energy Co-operative of Middleton.

Investors in WindShare can buy individual shares at $1 each (and must buy a minimum of 25 shares), which entitles them to one vote, or they can buy preference shares for $100 each (and must buy a minimum of five shares), which entitles them to dividends. The fund says that its internal rate of return is “projected at 7.23 per cent per year over the 20-year investment period,” but most investment advisors would warn that such investments are speculative.

WindShare also points out, however, that energy co-operatives have a long history in Europe - particularly in Denmark, where the Middlegrunden co-op owns the worlds largest offshore wind farm near Copenhagen. Wind turbine manufacturing is one of Denmark’s biggest export businesses - the giant turbine maker Vestas is Danish, as is NEG Micon - and co-ops also installed and operate 80 per cent of the wind turbines in Denmark, producing about 10 per cent of the country’s power.

Somewhere in between the General Electrics and Florida Light & Powers of this world and the community co-ops is Alberta-based power producer TransAlta. A major power generator in the province, it bought Vision Quest - a wind power company - in 2002, six years after the company started with a small project in Alberta. By 2002 it had 32 giant turbines operating in the province, and has added more since the acquisition.

TransAlta Wind now has 220 wind turbines in operation, for 152 megawatts of power generation at peak capacity. The company has two more projects on the drawing board for Alberta, four in the planning stages for Ontario, and in January won a contract to supply 75 megawatts of power to New Brunswick Power for the next 25 years.

Among the other ways of investing in wind are to buy units in the Clean Power Income Fund, which recently bought the 66-turbine Erie Shores wind generating facility from AIM PowerGen. Publicly-traded Boralex Inc. also builds wind power projects, and investment analysts have said the company is positioned to benefit from wind investment in Quebec, which plans to build 2,000 megawatts worth of wind.

Another potential investment is Brookfield Asset Management, which is listed in New York and Toronto, and invests in power and other assets. It recently completed the Prince Wind Energy Project near Sault Ste. Marie, the largest wind farm in Canada, with 126 turbines and peak capacity of 189 megawatts. And Canadian Hydro Developers Inc. runs five wind farms in Alberta and Ontario, and recently bought Vector Wind Energy of Ottawa, which has wind power investments in Manitoba.

Mathew Ingram joined The Globe and Mail's online news team in June of 2000, after spending four years as the Western business columnist, based in Calgary.

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