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Alterra Power sees opportunity in B.C.'s renewable energy sector

Elizabeth Walters Elizabeth Walters, Stockhouse
0 Comments| October 19, 2012

Alterra Power Corp. (TSX: T.AXY, Stock Forum) is positioning itself to capitalize on British Columbia’s future power needs by supplying renewable energy to a number of proposed liquefied natural gas plants that are expected to be built in the near future.

Alterra is a Vancouver-based company with the capacity to supply 567 megawatts of power from operations that include two geothermal facilities in Iceland, a geothermal plant in Nevada, BC’s largest run-of-river hydro facilities, as well as the province’s largest wind farm with a total book value of managed assets being $1.5 billion.

In an interview with Stockhouse, CEO of Alterra Power, John Carson said that if an LNG plant succeeded in B.C. there would be a “…tremendous amount of power associated with the operation of that LNG plant.”

Thus, Alterra is hoping to become a bigger player in the renewable energy field by supplying power to the proposed LNG plants in B.C.

“B.C. as a province, and on the whole, has been very strongly renewable and clean energy focused in getting its power historically,” said Carson, “And therefore we, and a lot of other people, think gas won’t be the only thing that drives the LNG process.”

The LNG process involves cooling liquefied natural gas to -160 degrees Celcius to keep it in liquid form. Once cooled it takes up 600 times less space than convetional gas and can then be shipped overseas,

In keeping with The BC Jobs Plan, B.C. has committed to having the first LNG plant up and running by 2015, with a total of three LNG facilities operating by 2020. The key purpose is to position B.C. to ship liquefied natural gas to markets in Asia.

Alterra plans to meet that demand by supplying energy from its recently acquired wind assets at four sites in coastal British Colombia, as well as its run of river power operations and established wind farm.

The early-stage wind assets have an estimated generation capacity of 1,000 megawatts.

“We recently purchased some coastal wind assets that we intend to develop as time goes on and as the need arises,” Carson said. “…we do want to be poised if the call is for more renewable energy needed there in the Kitimat area.”

“But in the mean time, we’ve got plenty of good things to keep us busy,” said Carson.

Currently, Alterra is working on expanding its presence in B.C. with the Toba Valley projects. Those include the Toba Montrose hydro power plant, which has 35-year energy purchase agreement with B.C. Hydro with a net capacity of 78.4 megawatts and Upper Toba, which is still being planned. Upper Toba has an energy purchase agreement with B.C. Hydro in place, however the details of have yet to be announced

The company also holds projects southwest of Fort St. John in B.C., including the Dokie wind farm, which has a 25-year energy purchase agreement with B.C. Hydro with a net capacity 73.4 megawatts and the Dokie 2, which is set to begin construction in early 2013. The company is already in talks with B.C. Hydro to negotiate a power purchase agreement for Dokie 2.

The Power purchase agreements (PPA) Alterra holds with B.C. Hydro ensure that “every time one of our wind turbines spins and throws off another megawatt hour of energy it’s sold under that contract,” Carson said.

Today, clean hydroelectric power, along with other renewable sources such as wind power and biomass, meets over 93% of British Columbia’s electricity needs.

“We are a B.C. based company, we have some global aspirations and some global operations, but without a doubt, B.C. is home.”

On August 13, the company reported financial results for the quarter that ended June 30, 2012. Alterra's net interest in revenue was $21.1 million and net interest in EBITDA was $9.5 million.

Net interest refers to the effective portion of results that Alterra would have reported if each each project had been reported in accordance with Alterra's actual share of ownership.

Trading at $0.46 on Friday, Alterra has a market cap of $214.2 million, based on 465.7 million shares outstanding. The 52-week high and low was $0.76 and $0.33 respectively.


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