FAQ
Q: What is management's experience in the wind energy industry?
A: Western Wind's management team includes pioneers of the modern wind energy industry that have been involved in the operation and ownership of utility scale wind energy operations in California since 1981. The team is experienced in many aspects of the wind energy business, including site evaluation and acquisition, energy analysis, transmission, permitting and zoning, turbine selection, construction, environmental, operations and sales and marketing.
Q: Where does revenue come from for wind parks?
A: Revenue from wind parks located in the US comes from three sources: current energy prices, green credits and Federal Production Tax Credit (PTC).
Rates for wind energy can differ significantly throughout the US. Presently, Hawaii, California, and the North Eastern US pay the highest rates for energy, which in turn results in higher revenues for wind energy producers. Some Midwest locations receive $0.06 per kilowatt hour, whereas in Californian wind farms can receive more than $0.09 per kilowatt hour. The total revenue per kilowatt hour is a combination of $0.03 to $0.075 in sales, $0.01 to $0.03 in green credits and $0.019 from PTC (adjusted for inflation).
Q: What are the company's immediate plans?
A: Western Wind has developed a pipeline of planned wind projects, including the expansion of its two operating facilities in California -- Windridge and Mesa. The company is also in process of developing its 120 megawatt project in California, Windstar I. The company has received a construction permit number and Western Wind has completed all archeological, biological, soil analysis and visual impact studies with a conclusion of 'no significant impact.'
To keep the pipeline of projects flowing, the company has implemented the California Initiative. The goal of the initiative is to expand the company's property portfolio in California and develop more than a 1,300 megawatt capacity for wind energy. To that end, Western Wind has acquired wind resource information on 66 prime sites throughout the state and has already secured a 100 megawatt project site near Barstow, California.
Q: Why should I invest in a wind energy company operating in the US?
A: There are many factors that make a wind energy company operating in the US a socially responsible, safe and potentially profitable investment.
With concerns of global warming, soaring fossil fuel prices, eastern blackouts and constant brownouts, the pressure on politicians to find solutions and alternatives is increasing. Government bodies in the US have started to implement legislation and incentives that support renewable energy producers and the use of renewable energy.
Although there is a great demand for renewable energy, the wind energy industry is still very under-developed. The industry is made up of many small operations and very few large to mid-sized companies. Because of the lack of competition, the market potential for a mid-sized wind energy producer such as Western Wind is huge.
Unlike natural gas and oil, wind is an infinitely renewable resource and there is no risk of running out of it. As the technology is constantly being developed and new legislations being introduced the industry will only grow.
Q: Is there much opportunity for growth?
A: The wind energy industry is fragmented and significantly under-developed. There are very few large to mid-sized wind energy producers and many small companies. This opens up a huge market potential for a mid-sized company such as Western Wind. With concerns of global warming and soaring fossil fuel prices the need for renewable energy sources is ever increasing. In California, the government has implemented legislation that requires utilities to generate a minimum of 20 percent of electricity from renewable sources by 2010. As the demand increases for clean, green sources of energy, the opportunity for growth as a wind energy producer is huge.
Q: What is Western Wind's strategy for developing new projects?
A: Western Wind uses its management's expertise in site evaluation, energy analysis, permitting and zoning, environmental and operations in order to acquire and develop new wind energy sites. Because of the team's history within the industry, they are able to quickly assess possible projects based on seven criteria:
- access to grid for transmission
- an average capacity factor between 30 and 40 percent
- a zoning policy that allows for wind park development
- will not have cultural or environmental impact
- regulatory support for renewable energy generation
- local political support of development
- incentives at the regional or federal level
Q: Why is Western Wind focused on California?
A: California has one of the most attractive markets for renewable energy projects. There are many incentives for renewable energy producers operating in California. Not only has government introduced mandates and tax incentives favourable to renewable energy producers, but California also pays one of the highest rates for energy in the US.
The California Public Utilities Commission (CPUC) and the California Energy Commission have jointly implemented the 2010 Renewable Portfolio Standard. This legislation requires California utilities to generate 20 percent of electricity from renewable sources by 2010, presently only 13 percent is required. California is now considering an even higher goal of 33 percent renewable energy by 2020.
Based on published market price referents by the CPUC, Western Wind expects that over the next few years 20 year power contracts will be set at an average long-term price of $105 per megawatt hour. Comparatively, between $73 and $75 per megawatt hour is currently being offered for long-term power contracts in Alberta, British Columbia and some US states.
As California pays one of the highest rates for energy in the US, producers receive higher revenue for wind energy. California wind farms can receive more than $0.09 per kilowatt hour -- $0.03 to $0.075 in sales, $0.01 to $0.03 in green credits and $0.019 for PTC (adjusted for inflation).
|
