Burchill Wind Farm Benefits All Of New Brunswick

The financial and environmental benefits of the Burchill Wind Project are significant, and go far beyond Saint John – they will flow throughout New Brunswick and help in the global drive to curb climate change.

By John Dalton, President of Power Advisory LLC, November 23, 2021

As an analyst, it's my job to study the changing electrical market and assess the impact of proposed energy developments. Saint John Energy engaged my company, Power Advisory LLC, to provide an independent assessment of the value of the Burchill Wind Project and wind power in New Brunswick generally.

The results of our analysis are clear: the value of constructing new wind power plants in New Brunswick far outweighs the costs. The financial and environmental benefits of the Burchill Wind Project are significant, and go far beyond Saint John – they will flow throughout New Brunswick and help in the global drive to curb climate change.

In today’s context of rising and unpredictable energy costs and the necessity to cut fossil fuel use in the drive to net zero, Burchill will not only provide affordable energy at a locked-in price for a quarter century, but it will curb carbon emissions throughout the province and the necessity for NB Power to rely on fossil fuel plants to generate electricity in times of peak demand.

The COP26 climate conference in Glasgow has underlined that steps need to be taken immediately to slow climate change and transform the global economy through low-carbon, sustainable energy.

Wind is a valuable resource in this transformation. It is worth noting that NB Power’s own 2020 Integrated Resource Plan indicates that onshore wind is the lowest cost new energy source available in New Brunswick.

Clean, affordable power for 25 years

Burchill will make a meaningful contribution to New Brunswick’s Climate Change Action Plan, and it will help the City of Saint John realize its goal of becoming carbon neutral by 2040. As an added bonus, the construction and operation of this new wind farm will bring $32 million in external investment to New Brunswick, generate $11 million in tax revenue for the municipal and provincial governments, and support more than 100 good-paying construction jobs.

“Recently, the cost of natural gas has gone up dramatically, causing the future price of electricity from many of these sources to escalate as well.”

The Burchill Wind Project is a partnership between Saint John Energy and Natural Forces, the Atlantic Canadian company that will build, finance, and operate 10 turbines for the municipal power utility at Lorneville. The Burchill site will generate 42 megawatts of power and supply up to 15 per cent of Saint John’s energy needs.

And it will do so at a set, affordable price that is locked in for 25 years. A number of the power supply options available to New Brunswick are priced based on New England’s competitive electricity market. The price can change as frequently as every five minutes, 24 hours a day, 365 days a year.

Since a large portion of the electricity generated in Atlantic Canada and New England is provided by power plants that burn natural gas, the market price of all electricity tends to follow the cost of natural gas. Recently, the cost of natural gas has gone up dramatically, causing the future price of electricity from many of these sources to escalate as well.

The futures market around-the-clock price of electricity for 2022 is now more than $90 CDN per megawatt-hour (MWh) at the Mass Hub, a major New England trading point. Seasonal electricity prices are being driven even higher by the emergence of a significant winter premium for natural gas supplies. The Mass Hub futures average on-peak price for electricity from December 2021 to February 2022 has risen to about $210 CDN per MWh. At the same time, higher oil prices are boosting the cost of operating NB Power’s generating station at Coleson Cove.

Wind price 40 per cent lower than wholesale

There is an upside to these trends: they significantly increase the savings available to New Brunswick when the Burchill Wind Project becomes operational. While that means Saint John Energy will end up buying less electricity from NB Power, that opens up potentially lucrative opportunities for the provincial utility to sell into the New England market.

“These trends significantly increase the savings available to New Brunswick when the Burchill Wind Project becomes operational.”

My team has calculated the total capital and operating costs of new onshore wind generation in New Brunswick at about $43 to $47 per MWh.

What this means: the price of electricity from the Burchill Wind Project will be locked in for two and a half decades at a rate that is already 40 per cent less than the wholesale price of electricity purchased from NB Power.

Every future increase in the cost of generating electricity by burning natural gas or oil will simply magnify the advantage that Saint John Energy and NB Power are able to obtain through the Burchill Wind Project.

Benefits New Brunswick – and the planet

To fully appreciate the magnitude of these savings, consider what happens on the sort of day when people rely on electricity the most: a cold, windy winter day.

“It’s a win-win-win for Saint John, the people of New Brunswick and our global environment.”

People turn up their thermostats at home, at school and in the office, driving an increase in demand for electricity. Without the Burchill project, the increase in demand on cold, windy days requires Saint John Energy to purchase more electricity from NB Power at a time when it is typically most expensive to produce. Power generators turn on their fossil fuel-fired power plants to satisfy consumer demand. This results in tonnes of climate-changing carbon being emitted each year.

Once Burchill becomes operational, there will be an alternative source of clean energy that can be used to meet the increase in local energy demand on cold, windy winter days. With the output from the Burchill Wind Project, Saint John Energy won't need to buy as much of that additional electricity – and just as importantly, power producers in New Brunswick and New England won't need to burn additional fossil fuels to generate it. It's a win-win-win for Saint John, the people of New Brunswick and our global environment.

No carbon tax on wind

“Wind is a natural resource that is not affected by access to pipelines.”

There is another key cost that wind power projects help consumers avoid, and that is the cost of carbon taxes. The federal government has announced plans to raise the price on carbon by $15 per tonne each year until it reaches $170 per tonne in 2030. At those rates of taxation, the cost of generating electricity at NB Power's Coleson Cove plant will increase by about $7.50 per MWh, while the cost of electricity from NB Power's Belledune generating station will rise by about $18 per MWh.

There's no carbon tax on wind power for producers to pass on to the consumer, and no shortage in potential wind output, either, as long as there are strategically placed turbines there to harness it. Wind is a natural resource that is not affected by access to pipelines. Our analysis has demonstrated that the sooner utilities create the infrastructure to harness wind’s benefits, as Saint John Energy is doing, the sooner the cost savings will be achieved.

Small utility, big impact

“The financial benefits of this project will be felt province-wide.”

This is where a small utility, like Saint John Energy, can make a big difference. According to its recent plan filed with its regulator, NB Power, New Brunswick's largest energy supplier, doesn't plan to bring new wind power online until 2033. Our study shows that delaying the construction of additional wind farms in New Brunswick will delay the realization of the benefits offered, both environmental and economic.

Our research not only bears out this assertion, it suggests that the savings generated for consumers by the Burchill Wind Project will be even greater than anticipated and that the financial benefits of this project will be felt province-wide.