Wind turbines: 1.7 million hectares of Crown land up for auction in NL
Newfoundland and Labrador Industry, Energy and Technology Minister Andrew Parsons issued a tender on Wednesday for 1.7 million hectares of Crown land .
The Government of Newfoundland and Labrador is inviting tenders for 1.7 million hectares of Crown land. The territory, the equivalent of three times the area of Prince Edward Island, will be offered to companies hoping to build wind projects.
So far, 31 companies have signaled to the government that they want to build wind farms on the island of Newfoundland, where a moratorium on wind turbines was lifted last April.
The majority aims to use wind energy to power plants producing hydrogen and ammonia for export.
In October, companies proposed 73 projects and requested the use of 3.8 million hectares of Crown land. The government has since excluded approximately 55% of the requested lands from the process because they include parks, vulnerable ecosystems, agricultural lands, sensitive waterways, mines or possible mining sites.
In green, the Crown lands auctioned by the Newfoundland and Labrador government on Wednesday.
The bidding, which will span 12 weeks, is being launched even though the government has yet to publicly detail the rules around Crown land leasing.
A draft of this financial framework has been sent to companies, but everything will not be finalized until the beginning of January. Companies don't know the exact fees they will have to pay or the rules to follow.
No one is going to make an offer without this information, acknowledges Andrew Parsons, Minister of Industry, Energy and Technology. If they want to use our resources, there will be a cost to pay. We are looking into that at the moment. You have to see the fees to be paid, the cost related to the use of land, water, but also what our objectives are.
Minister Parsons says he wants to take a different approach to the offshore oil industry, where parcels of land are awarded to the highest bidders and companies can avoid starting work for years.
We want viable projects that will move forward. We want to avoid people who have a lot of money coming in, buying a lot of land, but doing nothing, he explains.
Andrew Parsons says that in some cases , more than one company is applying for the same land.
A competitive process is expected, he says.
When the tender closes in March, a first review tenders will be launched. The government will assess projects on a few financial and security criteria only. About a month later, a more in-depth assessment will begin.
A criterion that could exclude several projects: the amount of electricity that will have to be purchased from Hydro Newfoundland and Labrador, whose Muskrat Falls hydroelectric project is not yet operational. The winds do not blow all the time and hydrogen plants need an additional source of energy, otherwise production risks becoming too expensive. But during the winter, the Hydro network has very little surplus electricity.
The ministry estimates that the successful bidders will be known by the end of 2023. Before starting work, companies will first need to obtain environmental approval.
If 73 projects are proposed, only one company has made its plan public.
The World Energy GH2 consortium, whose first phase includes 164 wind turbines on the Port-au-Port peninsula and a hydrogen and ammonia production plant in Stephenville, had to make their project public because it is already the subject of an environmental assessment.
World Energy estimates that its environmental studies will last at least until next fall. Its leaders want to start production in 2025, although experts and Minister Parsons describe the timetable as very ambitious.
Andrew Parsons would not say whether the construction of the first projects wind turbines will start in 2023.