NEXT year, farmers in the St. Leon region will be looking forward to a larger yield of one of their favourite specialty crops -- wind.
Algonquin Power & Utilities Corp. will spend close to $30 million increasing the 103-megawatt wind farm in the region south of Treherne -- about 130 kilometres southwest of Winnipeg -- by 10 turbines, producing an additional 16.6 megawatts of power.
The company said it had concluded a 25-year power-purchase agreement with Manitoba Hydro for the additional generation.
Officials from Algonquin and Manitoba Hydro said the timing of the expansion made sense to both sides.
Jeff Norman, Algonquin's vice-president of project development, said, "Manitoba Hydro and Algonquin benefit from the strong wind resource, which makes it more economic to build here."
When the original St. Leon project was built in 2004-05, it was the largest project of its kind in Canada. It has since been eclipsed by several others, including the St. Joseph wind farm east of St. Leon.
But a downturn in the U.S. economy has created a lessening of demand for wind turbines, so Algonquin was able to acquire new turbines "at a reasonable price," Norman said.
As well, Algonquin overbuilt the original substation at St. Leon, making expansion less costly than the original development.
Norman said even after this 16.5-megawatt expansion, there is still room for growth.
Manitoba Hydro CEO Bob Brennan said the key to the project was negotiating long-term prices both sides would be happy with.
"They make sure it's a price they can make money with and Manitoba Hydro looks at it such that unless it meets our price, we can't put it in the system," Brennan said. "It has to be win-win or we can't do it."
Probably making the negotiations that much more difficult was the fact electricity export prices have come down.
It's likely Manitoba Hydro is paying less for the 16.5 megawatts for the next 25 years than it agreed to pay Algonquin for the initial 103 megawatts.
Local landowners will benefit regardless of how much the generated power is selling for.
Paul Grenier, a local farmer and chairman of the board of CDEM (Conseil de développement économique des municipalités bilingues du Manitoba) said depending on where the turbines are placed, up to 10 more farmers will end up with more money in their pockets.
Although there have been various environmental concerns elsewhere about wind turbines, that's not the case in St. Leon.
"When we get the cheques, there's no problem," Grenier said. "The turbines in St. Leon are so quiet, you can sleep outside very well," he said.
Farmers generate fees from leasing to allow wind turbines on their land.
The original St. Leon wind farm injected $1 million a year in land payments and municipal and education taxes.
That's one of the reasons why CDEM has worked closely on the St. Leon project from the beginning.
"We always hope for more investment in Manitoba," Grenier said.
ALGONQUIN POWER & UTILITIES CORP.
45 renewable-energy facilities
242-megawatt installed capacity
Average power purchase agreement life of 12 years
Based in Oakville, Ont.