Algonquin Power & Utilities (APUC) has started commercial operation of the phase I Red Lily wind facility (Red Lily I), located in south-eastern Saskatchewan, pursuant to the power purchase agreement with SaskPower.

The 26.4MW power project, which consists of 16 units of Vestas V82 wind turbine, was completed ahead of schedule and is now successfully generating renewable power.

Algonquin Power, APUC’s electrical generation subsidiary, provided development and construction services to the facility and will also provide ongoing operation and supervision services to the facility.

APUC said the total capital cost of the wind energy facility was $69m.

The power purchase agreement with SaskPower is for a 25-year term, with an annual inflation adjustment applied throughout the term.

APUC said that its commitment in Red Lily I has been structured initially as a debt investment with total returns to APUC being a combination of interest payments and fees, and it retains an option to formally exchange its debt investment for a 75% equity interest in the entity which owns the facility in 2016.

In addition to Red Lily I, additional land rights have been secured for a second phase of the project.