Harnessing The Wind

SECTION E
TODAY
INSIDE TODAY
Why the governator’s
environmental efforts have
investors seeing green
IN
BUSINESS
See Page E2
BUSINESS ON SUNDAY
F E A T U R E S
EDITOR: CHARLES FRANK 235-7370 FAX: 235-7358
•
P E O P L E
•
O P I N I O N
WWW.CALGARYHERALD.COM
SUNDAY, NOVEMBER 25, 2007
Credit
gloom
spares
gems
DOUWE MIEDEMA
REUTERS
ZURICH
Alberta companies take a leap onto
the breezy bandwagon
A
Harnessing
the
GEOFFREY
SCOTTON
CALGARY HERALD
A
string of spectacular
diamond sales last
week showed the
world’s richest people are
still willing to spend, offsetting a disappointing art auction that some had seen as
an omen of economic
gloom.
Fears that the super-rich
might not be immune to the
credit crisis rose when a
Vincent van Gogh landscape
went unsold at a Sotheby’s
auction instead of fetching
its expected $28 million to
$35 million US price.
Yet on Thursday,
Christie’s sold a rare red diamond for a record $2.6 million, while Guess Jeans
founder Georges Marciano
bought a huge white diamond for $16 million a day
earlier, the second most expensive stone ever sold at an
auction.
“With the shadow of economic recession looming
over the U.S.A. these mixed
auction results could look
like a correction and set the
tone for the future market,”
auction database
Artprice.com said on its
website.
But the results of the diamond auctions may be the
more significant, given that
art is a more speculative investment than precious
stones, where mined supply
and measurable qualities determine prices.
“Diamonds are closer to
being a homogeneous product. There are average qualities, there is even a kind of
general measure, whereas
art, paintings, are clearly totally unique,” said Gilles
Moec, an economist at Bank
of America.
The disappointment at
Sotheby’s might be a sign of
the next fashion fad, or a
simple price correction, as
impressionist-era paintings
show signs of being less in
demand, experts said.
“Unlike companies where
people invest in stocks or
bonds, in art there is no
shareholder-driven cost
management, no cash flow,
no forecasts,” said UBS art
banking expert Karl
Schweizer. “Any future price
development can only be assessed in a speculative way,”
he said.
WIND
Calgary windpower group hopes
to take advantage of
Alberta’s limited
transmission capacity at a time when interest in socalled renewable energy — and wind
power in particular in this province
— is red hot.
Wind power advocates and government officials believe that as
many as 3,000 megawatts — or
nearly $7 billion in wind power projects could be developed in Alberta
in the near term, with up to 5,500
megawatts, or more than $12 billion
over the longer term.
Privately-owned Greengate
Power Corp. has aggressive plans
to develop up to 950 megawatts of
generation at six sites through
southern and central Alberta. The
only things the sites have in
common is that they are windy
— and there’s available transmission capacity nearby.
“What we think that allows us to do is to significantly accelerate the
ability to connect
those projects,” says Dan Balaban, the
company’s founder, president and
chief executive.
“It doesn’t matter how windy a site
is; if you can’t connect to the grid or
you’re waiting for a transmission
line, that introduces risk and takes
time,” adds Balaban, a former technology management consultant with
Ernst & Young LLP and PricewaterhouseCoopers LLP and a technology
entrepreneur. In fact, there are a raft
of projects throughout southern Alberta that have been delayed or are
awaiting construction because adequate transmission doesn’t exist to
carry the power away.
Greengate is using that challenge as
a strategic advantage to build only
where take-away capacity already exists. Altogether, using an industry
yardstick of $2 million to $2.2 million
per megawatt, Greengate is aiming for
a portfolio worth as high as $2 billion.
“Our plan is to move forward as
quickly as possible on all the projects,” says Balaban, noting interconnection applications have been
filed for all six locations. If the Alberta Electric System Operator
gives the green light, Greengate’s
pace of development is expected to
accelerate.
The firm is not the only one
anxious to take advantage of a very positive climate in this province for
wind power development.
“There’s a tremendous
amount of anticipation that
there will be some major developments in Alberta,” said Energy
Minister Mel Knight earlier this
fall. “What we see in the short term
here is a potential in the neighbourhood of 3,000 megawatts,” Knight
added.
Alberta has about 500 megawatts
of wind power, but it’s becoming increasingly competitive with other
forms of generation, including gasfired, but has no fuel costs and is
viewed largely as environmentally
benign.
The process of building wind generation, like any generation, is not
simple. There’s initial site identification, lengthy wind resource testing, environmental assessment
work, municipal consultation, engineering work, transmission connection applications and a myriad of
other factors that have to be
covered.
SEE WIND, PAGE E3
SEE GEMS, PAGE E4
Photo: Jessica Gergely, for the Calgary Herald.
Illustration, Rachel Niebergal, Calgary Herald
Dan Balaban, right, president and CEO of Greengate Power
Corp., stands with his father, Jack, and his brother
Jordan near a meteorological tower at the Stirling Wind
Project site 20 kilometres southeast of Lethbridge.
Photo, Christie’s International
The 2.26 carat rare red
diamond auctioned at
Christie’s International is
the largest of its type.
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ENERGY
CALGARY HERALD
Sunday, November 25, 2007
E3
B U S I N ESS O N S U N DAY
FROM E1
WIND: ‘It’s relatively
moving tributes
™
recession proof’
when the province and the
AESO lifted a cap imposed
in May 2006 that would
have capped at 900
megawatts the amount of
wind power that could be
produced in Alberta. The
cap was originally placed to
limit the impact of wind
power’s variability on the
overall transmission
system.
“There is tremendous interest in taking advantage of
Alberta’s very, very good
wind resource,” said Canadian Wind Energy Association president Robert Hornung, when the cap was
lifted. “At the end of the day,
we’re looking at significantly enhancing the
amount of wind that’s
coming forward.”
Variability is also a dimension of Greengate’s
strategy and the key consideration in its plans to develop sites across a swath of
Alberta geography.
Although not all of the
company’s planned development sites have been
made public, they have
started the process in at
least three places: Radar
Hill near Red Deer, which
would have up to 100
megawatts; Wintering Hills,
near Drumheller, which
would accommodate 150
megawatts; and Stirling,
near Lethbridge, which is
expected to have 100
megawatts of production.
“Part of our strategy is geographic diversity,” says
Balaban. “It’s not conclusive, but logically speaking
if it’s blowing in place and
you’ve got another place
that’s hundreds of kilometres away, it’ll balance out
the peaks and valleys of the
wind blowing in one place
and not the other, and
vice-versa.”
GSCOTTON@THEHERALD.
memoriams
obituaries
photographs
guest books
stories
Jessica Gergely, for the Calgary Herald
Dan Balaban, president and CEO of Greengate Power Corp. stands next to a meteorological
tower at the Stirling Wind Project site, 20 kilometres southeast of Lethbridge.
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At the same time, with
wind power suddenly attracting interest worldwide,
turbines are in short supply,
creating an absolute minimum timeframe for projects of about two years,
says Balaban.
“I’m setting a corporate
target of three years for us
to get up and running. Anything quicker than that is a
bonus,” says Balaban. “Our
Stirling project is furthest
along, because we’re already four months into our
wind monitoring. It’s looking very positive.”
Greengate is definitely a
family concern. Balaban’s
father, Jack, brings a 35-year
background in oil and gas
and mining to the table,
while brother Jordan contributes business development expertise. Although
the Balabans will be able to
finance the projects
through their speculative
and development phase, the
bulk of the $2 billion investment required will need to
come from outside investors. Balaban doesn’t see
that as an insurmountable
hurdle.
“It’s certainly a challenge
and it’s certainly ambitious,” he says. “Fundamentally, I believe there’s an
abundance of money out
there in the marketplace
and it’s looking for a nice,
secure home to go to,”
Balaban adds.
“I believe that as a longterm investment, there’s
nothing better than owning
a renewable energy facility.
It’s something that’s aligned
with what our society wants
to do and it delivers stable
steady cash flow, so you
know generally speaking
how this thing’s going to
perform before it gets built.
And it’s relatively recession
proof.”
In late September, the industry got a major boost
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Monthly Executive Moves
The following appointments have been announced in the Calgary Herald by companies and organizations during the past month.
GIBBS GAGE ARCHITECTS
GIBBS GAGE ARCHITECTS
Stephen Mahler
B.E.S., M. ARCH
Partner
James Paterson
M.C.S.D., B.A. (HON) I.D.
Manager
TALISMAN ENERGY INC
John. D. Watson
Board of Directors
ALBERTA RESEARCH
COUNCIL
NAIT
PARLEE MCLAWS LLP
PARLEE MCLAWS LLP
Dr. Axel Meisen
Chair of Foresight
Douglas Goss
Chair, NAIT Board of
Governers
Farha Salim
Wills, Estates & Wealth
Management
McCARTHY TETRAULT
GOWLINGS
GOWLINGS
GOWLINGS
GOWLINGS
Cameron G. Belsher
Partner (Vancouver)
John McClure
Partner
Courtenay Mercier
Associate
Alec Silenzi
Associate
Karen O’Keefe
Associate
HUMAN RESOURCES
INSTITUTE OF ALBERTA
SHAW COMMUNICATIONS
W. DONALD GOODFELLOW,
Q.C.
BENNETT JONES LLP
Cathy Miller, CAE
Chief Executive Officer
Dr. Lynda Haverstock
Board of Directors
Alexander M. Kooiman
B.A., LL.B.
Associate
Brent Mescall
Commercial Litigation
Steven R. Sieker
Partner, Tax
To place an appointment notice in the Calgary Herald, please call (403) 235-7138 or visit www.calgaryherald.com.
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