EDMONTON, ALBERTA – Capital Power Corporation (Capital Power or The Company) (TSX: CPX) has selected Vestas (NASDAQ OMX Copenhagen: VWS) for the supply and maintenance of 517 megawatts (MW) of wind turbines for Capital Power’s proposed wind power projects in Ontario and British Columbia.
Under a contract with Capital Power L.P., the legal entity that directly and indirectly holds Capital Power’s Ontario and British Columbia wind project assets, Vestas will supply and commission seventy nine 1.8 MW wind turbines (44 model V100 and 35 model V90) at Capital Power’s proposed 142 MW Quality Wind Project in British Columbia.
Turbine supply and maintenance agreements have also been signed for fifty eight 1.8 MW wind turbines (V90) for the 105 MW Port Dover and Nanticoke Wind Project in Ontario, and one hundred fifty 1.8 MW turbines (V90) for the proposed 270 MW Kingsbridge II project also located in Ontario. The agreements cover all scheduled and unscheduled maintenance for the towers and turbines for a period of 10 years following commissioning. Capital Power will be responsible for the installation of the turbines and towers.
The projects referred to above are expected to proceed upon provincial environmental and regulatory approvals, and in the case of Kingsbridge II, an award of a Feed-in-Tariff (FIT) power contract with the Ontario Power Authority (OPA). Should all three projects be developed, Vestas would deliver a total of 287 turbines to Capital Power. Vestas has advised that, as of December 31, 2009, it has supplied more than 950 turbines to companies for wind projects across Canada.
“These turbine agreements with Vestas represent a significant milestone as the majority of the capital costs for the projects are now fixed, providing cost certainty and capitalizing on economies of scale,” said Capital Power President and CEO, Brian Vaasjo. “As we advance our contracted generation portfolio, we are looking to build on the success that Capital Power and Vestas have had on the Kingsbridge I wind farm, which has twice been Ontario’s best performing wind farm.”
In March 2010, BC Hydro announced that Capital Power’s Quality Wind Project had been selected for the award of an Electricity Purchase Agreement (EPA). The EPA was signed in April 2010. The 142 MW wind power project will incorporate 79 wind turbines across the site, located in northeastern British Columbia. The project has an expected cost of $455 million and is in the advanced stages of the B.C. Environmental Assessment review process. Based on current timelines, the review process is expected to be completed in the third quarter of 2010.
In April 2010, the OPA announced that Capital Power would be offered a contract through the OPA’s FIT program for the proposed Port Dover and Nanticoke Wind Project. The contract with the OPA has since been signed. The 105 MW project has an expected cost of up to $340 million, and is expected to enter commercial operation in the fourth quarter of 2012. Under the FIT contract terms, a minimum of 50 percent of goods and services for the project must come from Ontario, contributing to local job creation and economic development.
Should Capital Power's proposed Kingsbridge II project also be developed, Vestas will supply and maintain an additional 270 MW of wind turbines for that project. This proposed project has been submitted to the OPA’s FIT program and is on a list of projects that require additional transmission capacity.
Vestas has advised Capital Power that since 1979, it has supplied more than 40,500 wind turbines globally. The Company supplied its first wind turbine to North America in 1981 and has since supplied more than 11,000 turbines across the continent.
Capital Power is a growth-oriented North American independent power producer, building on more than a century of innovation and reliable performance. The Company's vision is to be recognized as one of North America's most respected, reliable and competitive power generators. Headquartered in Edmonton, Alberta, Capital Power has interests in 31 facilities in Canada and the U.S. totaling approximately 3,500 megawatts of generation capacity. Capital Power and its subsidiaries develop, acquire and optimize power generation from a wide range of energy sources.
Certain information in this news release is forward-looking within the meaning of Canadian securities laws as it relates to anticipated financial performance, events or strategies. When used in this context, words such as will, anticipate, believe, plan, intend, target, proposed, and expect or similar words suggest future outcomes.
Forward-looking information in this news release includes, among other things, information relating to the Quality and Port Dover & Nanticoke Wind Projects and the proposed Kingsbridge II Project, including: (i) expected capital costs; ii) expectations with respect to investments by Capital Power of nearly $800 million into wind projects with contracted cash flows of at least 20 years in duration; and iii) expected timing for completion of environmental permitting and commercial operation. and (iv) expectations regarding Capital Power's strategy, including expectations that the contracts support Capital Power’s strategy to include contracted power generation and capitalize on economies of scale; (v) expectations regarding funding of Quality Wind and any other applicable projects; expectations regarding possible sources of funding; (vii) expectations regarding receipt of regulatory approvals and the timing of commercial operations; and (viii) expectations regarding the award of FIT contracts by the OPA.
The statements contained in this news release are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate. The material factors and assumptions used to develop these forward-looking statements include, but are not limited to: (i) the location of the projects and the sites on which it will be developed; (ii) costs of construction and development; (iii) the Company's financial position, credit facilities and sources of funding; (iv) the Company's assessment of commodity and power markets; (v) the Company's assessment of the markets and regulatory environments in which it operates; (vi) the Company's assessment of economic conditions; (vii) weather; (viii) availability and cost of labour and management resources; (ix) performance of contractors and suppliers; (x) availability and cost of financing; (xi) foreign exchange rates; (xii) management's analysis of applicable tax legislation; (xiii) the currently applicable and proposed tax laws will not change and will be implemented; (xiv) currently applicable and proposed environmental regulations will be implemented; (xv) counterparties will perform their obligations; (xvi) ability to successfully integrate and realize benefits of any acquisitions; (xvii) ability to implement strategic initiatives which will yield the expected benefits and results; (xviii) the Company's assessment of capital markets and ability to complete future share offerings; and (xix) the award of FIT contracts.
Whether actual results, performance or achievements will conform to the Company's expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results and experience to differ materially from the Company's expectations. Such risks and uncertainties include, but are not limited to risks relating to: (i) operation of the Company's facilities; (ii) power plant availability and performance; (iii) unanticipated maintenance and other expenditures; (iv) availability and price of energy commodities; (v) electricity load settlement; (vi) regulatory and government decisions including changes to environmental, financial reporting and tax legislation; (vii) weather and economic conditions; (viii) competitive pressures; (ix) construction; (x) availability and cost of financing; (xi) foreign exchange; (xii) availability and cost of labour, equipment and management resources; (xiii) performance of counterparties, partners, contractors and suppliers in fulfilling their obligations to the Company; (xiv) developments in the North American capital markets; (xv) compliance with financial covenants; (xvi) ability to successfully realize the benefits of acquisitions and investments; and (xvii) the tax attributes of and implications of any acquisitions. If any such risks actually occur, they could materially adversely affect the Company's business, financial condition or results of operations. In that case the trading price of the Company's common shares could decline, perhaps materially.
Readers are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Forward-looking statements are provided for the purpose of providing information about management's current expectations, and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.