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| April 19, 2010 |
| NaiKun Wind Quarterly Shareholder Update |
VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 19, 2010) - NaiKun Wind Energy Group Inc. (TSX VENTURE:NKW) distributed a quarterly project update to shareholders yesterday. The content of the update appears below.
NaiKun Wind Quarterly Shareholder Update
Welcome to the NaiKun Wind Quarterly Shareholder Update.
At the end of March, NaiKun Wind was advised by BC Hydro that our 396MW offshore wind project was no longer under consideration for a contract award in the Clean Power Call. This result is extremely disappointing, but it has not changed our view that the project can play a role in the Government of British Columbia fulfilling its clean energy and electricity self-sufficiency goals.
The wind resource in Hecate Strait is one of the strongest and most consistent in the world and we will continue to work on developing a facility that harnesses its power. While BC Hydro's decision means that our timeline to begin construction in 2012 is delayed, our development work will carry on. With this in mind, I want to provide our shareholders with an update on our activities and strategy going forward.
Before going any further, however, I would like to assure everyone that the team you have supported through the process to this point remains unified. Working with ENMAX, First Nations and key suppliers such as Siemens Canada, NaiKun Wind looks forward to near-term discussions with BC Hydro and the Provincial Government on how the 396MW project and the Haida Energy Field can fit into the Province's clean energy procurement plans. We continue to believe that the Hecate Strait wind energy resource can play a very important role in the Province's electricity portfolio.
Looking at things from a broader perspective for just a moment, development of an offshore wind industry is an opportunity that British Columbia should embrace, just as so many other jurisdictions around the world have done. There is a world-class renewable resource off the shores of this province that can bring unique benefits to its people.
There are a number of things on the horizon that will be of interest to our shareholders. In the next few months, I would expect to be reporting on the following items:
- The final steps in securing environmental certificates from the Federal
Government and the Haida Nation
- The results of our de-brief with BC Hydro on why our project was not
selected
- The tabling of the Clean Energy Act in the Provincial Legislature
- The results of deliberations by the Haida Nation on their becoming an
equity partner in the generation project, and their efforts to secure
support from the Federal Government for their participation
- Updates on our acquisition strategy
Environmental Approvals
As you know, the Province of British Columbia has issued an Environmental Assessment (EA) Certificate for the 396MW project and related transmission infrastructure. Still outstanding is the environmental go-ahead from the Federal Government and issuance of an EA Certificate from the Haida Nation. Neither of these processes has identified significant adverse effects and we expect them to be finalized by mid-year.
On the federal front, all agencies have made their contributions to a draft assessment report. The report now awaits a decision from Fisheries and Oceans Canada regarding NaiKun Wind's proposed Habitat Compensation Plan. We have put forth what we believe to be a proposal which meets the required feasibility test and expect their decision on this document in the coming weeks. Once finalized, the federal report will be issued to participating First Nations for their final review. Following that step, the Federal Government will review the feedback and issue its approvals.
As for the Haida Nation, they have concluded their environmental review and the next step is the issuing of an EA Certificate which specifies the conditions of the approval and the commitments that NaiKun Wind has made to ensure local benefits are maximized and any negative influence on the environment is minimized.
Clean Power Call Follow-up with BC Hydro
Our communication with BC Hydro regarding their March 31 decision on our Clean Power Call proposal has thus far been very limited. Given the significant effort put into the proposal and our plan to continue advancing the project through future power procurement processes, we believe it is important to work with BC Hydro to more fully understand its decision and the evaluation process that was followed.
We also believe it is important for BC Hydro to understand the perspective of developers who have invested significant time and resources in developing proposals, no matter the result of a given contract award process. We further believe that it is important for BC Hydro and the Province to encourage the development of a provincial offshore wind industry. As such, we have approached BC Hydro regarding a de-briefing session and been assured of a meeting in the near future. This step will help to shape our approach to obtaining a contract going forward.
Clean Energy Act and a New Approach to Procurement
With the pending conclusion of the Clean Power Call, the focus for clean energy opportunities in British Columbia shifts to the Clean Energy Act, which is expected to be introduced and passed in the current sitting of the BC Legislature. The Clean Energy Act was announced in the Throne Speech earlier this year and comes in response to the limited progress realised in advancing the BC Energy Plan, which was introduced early in 2007. The Clean Power Call and its ability to deliver near-term generation from clean energy projects have been cited by the government as a specific concern.
The Clean Energy Act will play a central role in fulfilling the government's announced "commitment to fair, predictable, clean power calls that will feature simplified procurement protocols and new measures to encourage investment ..." British Columbia Energy Minister Blair Lekstrom recently highlighted the important role to be played by the Clean Energy Act in developing a strong, sustainable energy industry. The Haida Energy Field and the NaiKun Wind project can be prominent in future procurement initiatives, given the need to source electricity from utility-scale energy solutions.
The legislation will likely be introduced in late April or early May and passed no later than June 3rd. Among its expected contents are significant improvements to the contract procurement process as well as measures to encourage new investment in the renewable energy sector. Once the Act has been introduced, NaiKun Wind intends to engage the government and BC Hydro to discuss how best to advance the offshore wind project and the development of an offshore wind industry.
We also expect the Clean Energy Act will deal with an export policy that builds on British Columbia's tradition of using power sales to drive economic development and pay for government services. This is the legacy of late Premier W.A.C. Bennett that has served the Province and economy so well. As a complement to the export policy, we could see commitments to major transmission upgrades and plans to go to the Environmental Assessment phase of the Site C hydroelectric dam in northeast BC. While this would be an important step forward for BC Hydro's Site C project and the development of new transmission infrastructure, we should not underestimate the time required and the hurdles that must be overcome to finish these initiatives.
This speaks to the important role that the NaiKun Wind project can play in addressing BC's future energy needs, since our environmental approvals are largely in place, there is strong community and First Nations support and there is significant transmission capacity available where our project would connect to the main grid.
Dealing with these changes in direction will be new leadership at BC Hydro and BC Transmission Corporation. Both companies are currently conducting executive searches to fill their vacant Chief Executive Officer positions. Leadership searches by their nature create a degree of uncertainty within organizations and we look forward to this matter being settled soon. Strong leadership at these Crown corporations will be crucial to implementing the policy objectives and energy procurement framework laid out in the Clean Energy Act.
Haida Equity Investment
The Haida Nation continues to view our project as a potential cornerstone of their economic independence and is determined to ensure that the opportunity is maintained as they work through their process regarding participation as a direct equity owner in the 396MW project.
Since September of last year, the Haida Nation, supported by NaiKun Wind, has held a series of discussions with the Federal Government aimed at procuring a loan guarantee so that they can secure the funds necessary to make the investment. This effort is reaching important milestones on two fronts.
First, the Haida Nation held the final two information sessions for their people last week, on April 15 and 16. We anticipate the Haida will soon conduct a vote regarding the decision to take the direct ownership position, which could be up to 40% of the project. This is a major decision for the Haida, and NaiKun Wind respects and supports their decision-making process.
The status of the discussions with the Federal Government is quite advanced. Ministries with direct authority over files pertinent to the Haida Nation's request have expressed support for the idea. In the next few weeks, representatives from the Haida Nation and NaiKun Wind will be holding additional meetings with key government officials to ensure this option is available to the Haida Nation should they decide to exercise it.
Investigative Use Permit
NaiKun Wind is authorized to develop its wind project through the issuance of Investigative Use Permits by the Province of British Columbia and the Haida Nation. We recently renewed the Haida Nation permit and will be renewing the provincial permit in May 2010. These two important steps allow us to continue to advance the project.
Potential Acquisitions
As mentioned in recent news releases, NaiKun Wind has since last year been assessing potential acquisition opportunities in the renewable energy sector. We have identified several projects of interest that share the characteristic of being significantly advanced (some operating or contracted and ready to build) and are in varying stages of analysis on them. For assets, or portfolios of assets, of a certain size, we have identified entities that are interested in joining NaiKun Wind as a direct equity owner. Discussions with the developers/owners of several projects are ongoing.
Conclusion
In summary, NaiKun Wind continues to advance its offshore wind project in anticipation of opportunity to be presented shortly by the Clean Energy Act. While its content has yet to be made public, we believe the Act will be an important part of a new framework that will result in significant opportunities for renewable energy companies like NaiKun Wind. We will keep shareholders updated on developments as they occur.
Thank you for your ongoing support.
Paul Taylor, President and CEO
NaiKun Wind Energy Group Inc.
www.naikun.ca
Caution Regarding Forward-Looking Statements - This news release contains certain forward-looking statements, including statements regarding the business and anticipated financial performance of the Company. These statements are subject to a number of risks and uncertainties. Actual results may differ materially from results contemplated by the forward-looking statements. When relying on forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and should not place undue reliance on such forward-looking statements. The Company does not undertake to update any forward-looking statements, oral or written, made by itself or on its behalf.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. | |
| CONTACT INFORMATION:
NaiKun Wind Energy Group Inc. - Investor Relations Enquiries
Peter Murray
Manager, Investor Relations
604-631-4494
pmurray@naikun.ca
or
NaiKun Wind Energy Group Inc. - Media Enquiries
Doug McClelland
Director, Communications
604-631-4487
dmcclelland@naikun.ca
www.naikun.ca
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| INDUSTRY: Energy and Utilities - Alternative Energy, Energy and Utilities - Utilities, Environment - Air Pollution Control, Environment - Natural Resource Management, Environment - Regulations and Law | |
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