New Brunswick Community Wind Projects: Getting to the Tipping Point

New Brunswick Department of Energy

Year: 2010

Municipalia is a fictitious, but typical, New Brunswick community which has an interest in developing a community wind project to supplement it’s annual cash flow.

The Province of New Brunswick has recently announced a Community Energy Policy that will enable communities to have assured access to the New Brunswick Power electrical system for the sale of renewable energy at a rate that is guaranteed.

It is acknowledged that small community wind projects may be less economic than large utility scaled projects that are the norm in Canada but there are advantages to developing locally owned community wind projects because the significant benefits of the projects – annual profits from electricity sales, flow directly into the community which owns and hosts the wind development. One hope for this early stage project is to help develop a template which subsequent projects can use to develop wind projects in their communities.

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The purpose of this business plan is to outline the activities required to be carried out to complete Stage 2 project work. Stage 2 involves a detailed feasibility study to analyse the data gathered from the wind monitoring tower to determine the wind resource, how the winds flow over the adjacent land and what energy generation will result from a number of potential wind turbines. Once the most economic wind turbine is selected, initial engineering work will be completed to determine the ultimate project configuration and accurate (Class A – +/-5%) cost estimates for the project will be developed. With the project costs and the project energy yields known the financial performance of the project will be evaluated.

To initiate the discussion on the ultimate economic viability of the project an initial financial modeling exercise has been carried out using Class C (+/-20%) estimates for cost and energy production. The results of the financial analysis are evaluated using sensitivity analysis on several key parameters. The results show that a properly designed and constructed wind project can, with the appropriate funding support and financing arrangements provide attractive annual dividends to an equity investment.

Table of Contents

1. Executive Summary
2. Introduction

2.1 Municipalia, New Brunswick
2.2 The Time is Right
2.3 Project Description
2.4 Project Ownership
2.5 Objectives of this Business Plan
3. Wind Energy as a Community Business
3.1 Utility Wind Energy – State of the Art
3.2 Opportunities and Challenges for Community Wind
3.3 The Economics of Community Wind Energy
3.4 Primary Objective of the Business Plan
4. The Project
4.1 Site Description
4.2 Project Baselines and Options
4.3 Wind Resource
4.4 Wind Turbine Options
4.5 Interconnection Alternatives
4.6 Stage Activities
5. Project Cost Estimates
6. Projected Financial Pro Forma with Sensitivities

6.1 Revenue Projections
6.2 Expense Projections
6.3 Cash Flow
6.4 Balance Sheet
6.5 Income Statement
6.6 Financial Returns
6.7 Project Summary
6.8 Project Sensitivities
7. Anticipated Project Timeline
8. Financing Options
9. Project Execution

9.1 Stage 1 Investment Requirements & Objectives
9.2 Stage 2 Investment Requirements & Objectives
9.3 Stage 3 Investment Requirements & Objectives
9.4 Operation and Governance
10. Next Steps
10.1 Resources required moving forward
10.2 Activities and Timelines
11. Conclusion
Appendix A

Municipalia Wind Plant Business Plan Financial Statements August 6, 2010