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 Wind power may be
alternative energy in North America but in Europe it is entirely mainstream
� Denmark relies on wind for some 20% of its electricity, Spain for around
10% and Germany for 6%. Naysayers are behind the times; the wind
industry is real and growing, relying on highly proven technology (there
are tens of thousands of wind turbines operating worldwide) and strong
public support.
NaiKun Wind Energy Group Inc. (NKW) is well on its way to developing
Canada�s first offshore wind farm. Its facility will stand in about
10 metres of water some 8 kilometres off the eastern shore of Haida Gwaii
(the Queen Charlotte Islands) in northwestern B.C. The project is ambitious
but the team behind it is blue-chip to the core and the wind they plan to
harness is amongst the best on the planet.
How good? NaiKun�s wind is Class 7, the highest rating on the
global wind measurement scale. This is why wind energy developers are
increasingly going offshore, where the wind (it�s called planar wind) is
far stronger and more consistent than that onshore, which suffers
power-draining turbulence from trees, mountains and other obstructions.
In November 2008, NaiKun submitted its 396MW (enough for 130,000 homes)
Phase 1 proposal into BC Hydro�s Clean Power Call, a process designed to
award contracts to the best green energy projects in the province.
Contracts will be announced in June of this year and NaiKun is highly
confident of being amongst the recipients�with good reason.
On the BC Hydro wish list:
- Large, scalable
projects: a perfect description for NaiKun,
- Counter-seasonality:
NaiKun�s peak generation occurs in fall/winter when B.C.�s power needs
are highest; hydro-based assets, on the other hand, peak in summer
when power needs are lowest,
- First Nations
benefits: the Haida and Tsimshian First Nations are directly
involved through subsidiary ownership and other roles,
- Geographic
diversity: NaiKun is in a different region than all other B.C.
wind and will not compete with any other projects for access to local
transmission capacity,
- Credibility:
NaiKun management comes from the energy and construction industries
(BC Hydro, TransAlta, Constellation, SNC-Lavalin); German industrial
powerhouse Siemens is expected to supply and install the turbines and
transmission system; NaiKun�s strategic partner for Phase 1 is ENMAX
Corp., the highly respected company that supplies most of Alberta�s
electricity.
In 2009, NaiKun enters a home stretch of sorts. It applies for
environmental approval in February, contract awards occur between April and
June, environmental approval should arrive in Q4, and initial construction
begins in 2011. Importantly, the corporate structure averts dilution
to the NaiKun share base, as all project financing goes into the Generation
Company subsidiary that will own and operate the wind farm.
NaiKun trades in the $0.45-$0.55 range, and as per-share
cash stands well above that level, the market is assigning negative value
to the company�s virtually incomparable development pipeline. For an
investor who believes in the project and the rock-solid
management/directors team behind it (a team, by the way, that has purchased
well over a million shares in the open market since October), NaiKun would
seem to offer excellent value.
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