Canada-based Alterra Power Corp. (TSX: AXY) has several renewable energy projects under development in the U.S., Canada and other locations worldwide, including a 100-MW solar project in Puerto Rico.
Alterra currently operates six power plants totaling 566 MW of capacity, with operations in Canada, Iceland and the U.S. As of March 31, the company’s operating facilities consisted of: a 66.6% net interest in two geothermal power plants in Iceland (Svartsengi and Reykjanes); a 100% interest in one geothermal power plant in Nevada (Soda Lake); a 40% net interest in two run of river hydro power plants in British Columbia (Toba Montrose, owned and operated through Toba Montrose General Partnership (TMGP)); and a 51% net interest in a wind farm in British Columbia (Dokie 1, owned and operated through the Dokie General Partnership (DGP)).
In January 2011, Alterra and GE Energy Financial Services (GE EFS) agreed to acquire a 50-MW solar project, called ABW Solar, located in Ontario, Canada, subject to fulfillment of certain contractual conditions by the seller, First Solar Inc. As of April, the project has entered commercial operations, and the company’s acquisition is expected to close in the second quarter of 2013. The company and GE EFS have formed the ABW Solar General Partnership to acquire and operate ABW Solar. Alterra will serve as the administrative partner. All electricity generated by ABW Solar will be sold to the Ontario Power Authority under 20-year power purchase agreements (PPAs). The company together with GE EFS and First Solar are currently in late-stage negotiations with lenders for project debt financing which is also expected to close in the second quarter of 2013.
During and subsequent to the first quarter, Alterra and Energy Development Corp. (EDC) continued to document a joint venture agreement that will specify the terms under which EDC will invest C$58.3m for a 70% interest in Alterra’s Mariposa geothermal project in Chile and C$8m for a 70% interest in a number of the company’s Peruvian geothermal assets. Alterra expects any arrangements to be completed in the second quarter of 2013.
In April, Alterra entered into a partnership with Greenbriar Capital Corp. in AG Solar One, which intends to develop 100 MW of solar capacity in Puerto Rico under a Master Renewable Power Purchase and Operating Agreement with the Puerto Rico Electric Power Authority. The partnership, which is owned 50/50 by Alterra and Greenbriar, acquired rights to the master agreement in April.
Alterra’s Soda Lake facility consists of two binary geothermal power production plants currently operating at 15 MW gross capacity and is expected to generate a long-term average of 71,000 MWh. The Soda Lake facility sells its net electrical output to NV Energy under two 30-year power purchase agreements (PPAs) that terminate in 2017 and 2021.
The company holds a 40% economic interest and 51% voting interest in TMGP, a joint venture which owns and operates the Toba Montrose run of river hydroelectric facility. The remaining 60% economic interest in TMGP is held by Fiera Axium Infrastructure. TMGP sells electricity to BC Hydro under a PPA that expires in May 2045. The Toba Montrose hydroelectric facility is expected to generate a long-term average of 727,000 MWh of electricity annually.
Alterra holds a 51% interest in DGP, a joint venture, which owns the Dokie 1 wind farm in northern British Columbia. The remaining 49% interest in DGP is held by Fiera Axium Infrastructure. The Dokie 1 wind farm consists of 48 Vestas V-90 wind turbines, and is expected to generate a combined long-term average of 330,000 MWh of electricity annually. DGP sells electricity to BC Hydro under a PPA that expires in February 2036. DGP operates the Dokie 1 wind farm in cooperation with the Halfway River, West Moberly and Saulteau First Nations and the McLeod Lake Indian Band.
British Columbia hydro project a focus for development
In 2010, Alterra and GE EFS signed a 40-year PPA with BC Hydro for the Upper Toba project that includes two run of river power plants (Jimmie Creek and Upper Toba River) in close proximity to the Toba Montrose facility, with a combined expected annual average generation of up to 345,000 MWh of electricity. The company holds a BC Provincial Environmental Assessment Certificate for the Upper Toba project. The company entered into a development phase agreement with a contractor to perform project optimization and design work and is planning to commence construction as early as the summer of 2013. Other project advancements included completion of drilling and seismic testing for the powerhouse and intake locations, further hydrology work and continued work with project contractors and consultants and initial discussions with lenders regarding project financing.
Alterra is currently focused on design and preparation for the initial 62-MW portion of the project (Jimmie Creek). Alterra has reached an agreement in principle to purchase the 49% share of the project currently owned by GE EFS. Alterra has the right to use the excess and unused capacity of TMGP’s transmission line for the Upper Toba project, subject to a priority use agreement with TMGP. The TMGP transmission line was built to interconnect the Toba Montrose hydro facility to the BC Hydro substation at Saltery Bay. In April 2012, TMGP and Upper Toba General Partnership signed an agreement with BC Hydro allowing the Upper Toba project to interconnect to the Saltery Bay substation.
Alterra holds a 51% interest in a currently planned expansion of the Dokie 1 wind farm (called the Dokie 2 wind farm) with a projected capacity of up to 156 MW. GE EFS holds the remaining 49% interest. The company and GE EFS installed four new meteorological towers at the site in late 2011 to complement the previously installed towers (13 in total).
Included in the category of early-stage projects are:
- Alterra’s development assets in the U.S. include McCoy, Desert Queen, certain properties adjacent to the current Soda Lake facility and other early stage properties in Nevada. The company said it has not planned any material expenditure on these properties in 2013.
- The company has rights to 37 run of river hydroelectric power projects in British Columbia, primarily in the southwestern region of the province. In 2008, the company had submitted its Bute Inlet project proposal to the BC Environmental Assessment Office, the Canadian Environmental Assessment Agency and the Major Projects Management Office. The proposal organized 17 run of river projects into three interconnected groups with an estimated potential annual generation of 2.8 million MWh. The company subsequently decided to place this application on hold to allow for further analysis and data collection. The company also holds a Crown Land Tenure, an accepted water license application and an investigative use permit for the Fir Point 1,000-MW pumped storage development project.
- In July 2011, the company was awarded two geothermal exploration concessions in the Upper Lillooet area of British Columbia covering 4,942 hectares. The area is a known geothermal resource area and hosts hot springs and other geothermal manifestations including volcanic activity. The company undertook data compilation and synthesis in the first half of 2012 and a modest field program in August 2012. Analysis of the results is nearing completion.