Stelco plans wind farm near Nanticoke

TORONTO, ONTARIO - Stelco Inc. isn't out of bankruptcy protection just yet, but the steel giant appears to have the wind back in its sails.

Canada's largest steel producer, which is at the centre of a $350 million lawsuit after backing out of a major wind development project in April, has decided to go it alone with plans for a 40-turbine wind farm around its Lake Erie steel plant in Nanticoke.

If completed, the project would produce enough electricity to power more than 12,000 homes in a region known for its coal-fired Nanticoke plant, the province's worst polluter.

"This facility would generate up to approximately 60 megawatts of electricity to be dispatched to the province of Ontario grid via an existing interconnection agreement with the Hydro One system," states one advertisement the company recently placed in a Haldimand County newspaper.

Haldimand mayor Marie Trainer was notified in an Aug. 19 letter, obtained by the Toronto Star, that the Hamilton-based company has commenced an environmental assessment of the planned wind farm location, as required by the Ministry of Environment.

Dean Comand, who is leading the project for Stelco, said the company is committed to green energy and is trying to determine whether the wind farm will be economically viable. He would not say whether the project is part of a longer-term strategy of luring a wind manufacturer to the area.

"We're just doing all the detail engineering now," said Comand. "We're looking at quotes on equipment, and interconnection agreements."

Stelco, which is legally insolvent and expected to emerge from creditors' protection on Sept. 9, has a reason to warm up to wind power. The wind industry is the second-largest buyer of steel, behind the automotive industry, in countries such as Germany — good news in a sector suffering from overcapacity.

Stelco entered a partnership in the summer of 2004 with a small consulting firm called Georgian Windpower. The two companies had a 20-year plan to install 2,200 megawatts of wind power in the area, beginning with an initial 80-megawatt wind farm at Stelco's Nanticoke Industrial Park.

The idea was to attract a wind turbine manufacturer to the region, create thousands of local jobs and secure Stelco a major next-door customer for its steel. But Stelco pulled out of the project on April 15, two days before Georgian Windpower was to secure $150 million in funding for the development.

Georgian Windpower responded by filing a $350 million breach-of-contract lawsuit, alleging that Stelco planned to use confidential information from the partnership, including wind assessments and a detailed economic analysis of the project, for its own purposes.

The allegations have not be proven in court, but Justice James Farley, who is presiding over Stelco's court-supervised restructuring, has given Georgian Windpower the go-ahead to proceed with its case once the steel giant emerges from court protection.

Michael Monette, president of Georgian Windpower, said he's surprised that Stelco is moving forward on its own while seeming to completely ignore the major lawsuit over its head.

"It's nice to see they understand the value of this project.... But this is just another indication that they're paying no respect whatsoever for the agreement we have in place," said Monette.

He said Georgian Windpower has a binding 75-year land agreement with Stelco for wind energy development. Stelco has argued in court documents that it had the right to terminate the agreement on 60 days notice.

Stelco official Helen Reeves said there's no relationship between the two projects.