The PPA was awarded to Northland Power following a successful bid in SaskPower’s Request for Proposals to provide between 80 and 110 MW of peaking power.
The 86MW natural-gas-fired peaking plant will be built near Spy Hill, Saskatchewan, about 200 km east of Regina, Canada. All power produced by the plant will be sold under the PPA to SaskPower. The plant will use two General Electric LM 6000 gas turbines to produce the electricity and will be situated on land leased from SaskPower.
Construction is expected to begin in June 2010, and the plant is scheduled to begin commercial operations no later than December 1, 2011.
John Brace, CEO of Northland Power Income Fund, said: “We are very pleased that SaskPower has shown its confidence in Northland Power to enter into this important contract. We will meet SaskPower’s requirements for a reliable peaking plant that will provide needed support and capacity for the province’s electrical system.
“Saskatchewan’s energy needs are growing rapidly, and we are excited by the opportunity to work with such a respected partner as SaskPower in responding to these needs.”
Under the PPA, the project will receive monthly payments that are designed to cover all fixed costs and investment returns. The PPA also provides protection against changes in the market price of natural gas, as fuel costs are passed through to SaskPower.
Northland Power will be responsible for operating the plant to achieve specified efficiency. The contractual structure of the project is designed to ensure predictable, stable and sustainable cash flows over the entire 25-year term of the PPA, Northland Power said.
