British Columbia-based renewable energy developer Sea Breeze Power Corp. has announced that its wholly owned subsidiary Sea Breeze Energy Inc. has received C$7 million from International Power Canada Inc. (IPC) as part of an agreement for IPC to purchase Phase 1 of the 99 MW Cape Scott Wind Farm (formerly named the Knob Hill Wind Farm).
The company also announced that construction has begun on the project, which is situated 35 km west of Port Hardy on northern Vancouver Island, within the traditional territories of the Quatsino, Tlatlasikwala and Kwakiutl First Nations.
In addition to payments related to the original asset purchase transaction and to subsequent milestone achievements of the project, Sea Breeze expects to receive an ongoing royalty based on a percentage of gross revenue earned by the project through a 20-year power purchase agreement with BC Hydro. Sea Breeze also holds an option to acquire a 10% equity interest in the project.
Last November, the British Columbia Environmental Assessment Office completed the requested amendment to the environmental assessment certificate for the project, splitting the original certificate into two – Phase 1 for 99 MW by Cape Scott Wind, and Phase 2 for future Sea Breeze projects) – and accepting the updated project design to include the addition of the 40 km 138 kV Georgie Lake Transmission Line, which will interconnect the project with BC Hydro's substation in Port Hardy.
In March, Fisheries and Oceans Canada delivered its positive decision on the screening of the project under the Canadian Environmental Assessment Act.
Phase 1 of the Cape Scott Wind Farm is expected to generate enough electricity to power approximately 100,000 households. Commercial operation is scheduled to begin in 2013.