The world’s wind power capacity has grown rapidly since the beginning of the century with the US and China driving it representing almost two thirds of the global growth of wind power. In addition, the cost of wind energy has dropped nearly 70% in the last decade, and technological advancements in the sector continue to make wind a fierce competitor in the energy mix.
In Canada, wind power is the fastest growing energy source – growing by over 20% per year for the past 10 years and becoming the lowest-cost source of renewable energy in 2018 with a total installed capacity of 12,817 MW. In 2019 alone, over $1 billion of capital financed five new wind energy projects in the country. And even some of Canada’s largest fossil fuel companies have approved investments in this sector with Suncor committing to build a $300 million wind farm and Enbridge funding an offshore wind farm with a capital cost over $2.2 billion.
Deekten Impact has recently made its first wind energy investment, through RE Royalties a publicly traded renewable energy financing company, in Scotian Windfields, a locally owned renewable energy company based in Halifax with a 20% ownership interest in a portfolio of 12 wind energy projects across the province of Nova Scotia. The projects have a generating capacity of 39.6 MW and a 20-year power purchase agreement with fixed rates of revenues from Nova Scotia Power.
The Nova Scotian Wind projects generate approximately 131,000 MWh of clean energy per year, which is equivalent to a reduction of 105,000 tonnes of CO2 emissions. The National Renewable Energy Laboratory considers wind energy to be one of the most environmentally-sustainable forms of energy generation – even when considering the life-cycle basis. The development of these 12 wind energy projects is pivotal to the success of Nova Scotia achieving its goal of 40% renewable energy sources by 2022 and we are excited to help them reach their target.
Along with the positive environmental benefits of these projects, Deetken Impact is equally interested in the associated social benefits of developing the Scotian Windfields projects. The portfolio of 12 wind energy projects is a joint venture of WEB Wind Energy, Scotian Windfields and Scotian Wind (SWFI). SWFI is a community owned corporation encompassing eight Nova Scotian community-owned wind energy companies formed under the Community Economic Development Investment Fund (CEDIF) program. The program is supported by the provincial Department of Economic Development with the main purpose of developing investment opportunities in renewable energy for locally raised funds, thus allowing local residents to contribute to their community development while enjoying financial returns. Nova Scotia further supports the CEDIF program through the Equity Tax Credit that provides investor participants with a personal tax credit of 35%. More than 800 Nova Scotian families are part owners.
The development of the community fund strengthens the local economy while increasing local engagement. The Government of Nova Scotia estimates that only 2% of CAD $600M Registered Retirement Savings Plan (RRSPs) contributions are reinvested in the province, which is a huge, missed opportunity since “each investment dollar spent in a community circulates through the economy creating a beneficial ripple effect.” The power to create a positive change through investing locally is an inspiring concept. The participation of locals also demonstrates communal endorsement– a social authentication of the legitimacy of the project. A Community Liaison Committee (CLC) was set up where local community members volunteered as representatives to the community views, concerns and ideas on project plans and activities. The two-way flow of communication between the joint venture and the community ensures Nova Scotians have a say in the success of the projects. Throughout the development phase, Scotian Wind hosted several open houses to share findings of the Environmental Assessment and promote public feedback. Continuing local engagement, each year, Scotian Winds donates 1% (>CA$50k) of the gross revenue as a Community Dividend to local communities including school programs, scholarships, and community recreation programs. The CLC continually plays an important role by administering the Community Dividend donation.
Thanks in part to these projects, Nova Scotia is not only better positioned to meet its goal of 40% renewable energy by 2022 but also have access to affordable and locally produced clean energy. Wind energy is projected to generate over 27% of the electricity demand that Canada will require between now and 2040. While globally, the International Renewable Energy Agency (IRENA) predicts that wind energy will account for 35% of global energy needs and deliver one-quarter of the annual CO2 emission reductions needed by 2050. Deetken Impact will continue to look for opportunities to advance the transition to renewable energy both in Canada and in the other regions where we work.
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