Potential for Wind Power Development in Prince Edward Island, Canada

“Onshore Wind Farm development with 20 MW installing capacity”

Submitted to Liselotte Aldén

as part of Introduction to Wind Energy course

 

Uppsala University Dept. of Earth Sciences, Campus Gotland

Orkhan Baghirli

September 16, 2014

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Project Summary

Key words: Wind Power, Project Development, Site Assesment, Infrastructure, Wind Power Development in Canada, Prince Edward Island, Wind Tubines, Wind Energy This report will handle the Potential Wind Power Development in Prince Edward Island, which is located in northeast of Canada. The area is chosen based on its strong wind energy records. Afterwards, other critical aspects of wind farm development are concisely stated for the consideration of potential developers. Since there is no any ongoing planning or development processes in proposed site, this report has real value for developers and investors. The topics of discussion include: wind potential assessment, availability of infrastructure such as transportation and utility networks, planning and permitting processes including public consultation, financial support system and margin for profit. Proposed wind farm project will be evaluated based on criteria mentioned above and conclusions will be presented together with its pros and cons.

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TABLE OF CONTENTS Summary ....................................................................................................................... ii List of Tables ................................................................................................................ iv List of Figures ............................................................................................................... v Chapter 1. Introduction ..................................................................................................1

1.1 Wind Energy and Canada……………………………………………........1 1.2 Prince Edward Island (PEI) …………………………………………....... 1 1.3 Conclusion ………………………………………..................................... 1

Chapter 2. Wind Potential Assessment ......................................................................... 2 Chapter 3. Infrastructure ............................................................................................... 3 3.1 Harbors ....................................................................................................... 3 3.2 Confederation Bridge ……………………………..................................... 3

3.3 Road Network ............................................................................................ 3 3.4 Utility Network .......................................................................................... 4 Chapter 4. Planning and permission process including public reception ...................... 5 4.1 Wind Farm Design ……………………………………………..…….….. 5 4.2 Local Partnership ........................................................................................ 6 4.3 Land Acquisition .........................................................................................6 4.4 Permitting Process ………………………………………….......................7 4.5 Public Consultation ……………………………………………………….7 4.6 Tourism ………………………………………............................................7 4.7 Environmental Impact Assessment ………….............................................7 4.7.1 Carbon Footprint …………........................................................ 8 4.7.2 Auto Transportation …………................................................... 8 4.8 Agriculture …………............................…………..................................... 8 Chapter 5. Economic and Financial Analysis ................................................................ 9 5.1 Financial Support System ……............................…………........................9 5.2 Potential for Profit ……............................………….................................. 9 Chapter 6. Conclusion ................................................................................................. 10 Literature ...................................................................................................................... 11 Appendices ................................................................................................................... 13 Appendix A ……............................…………................................................. 13 Appendix B ……............................…………................................................. 15 Appendix C ……............................…………................................................. 16 Appendix D ……............................…………................................................. 16

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LIST OF TABLES Table 1: Electricity generation and consumption breakdown. 5 Table 2: Design Paramenets of New Wind Farm based on existing wind farms in island. 6 Table 3: Annual Mean Wind Speed. 13

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LIST OF FIGURES Figure 1: Map of Canada and Prince Edward Island 1 Figure 2: Annual mean wind speed of Prince Edward Island 2 Figure 3: Location of the Proposed Site 2 Figure 4: Confederation Bridge 3 Figure 5: Road Network of PEI 3 Figure 6: PEI utility system owned by Maritime Electric Company 4 Figure 7: Wind Rose 13 Figure 8: Wind Speed Histogram 14 Figure 9: Energy Usage of PEI 15 Figure 10: Technical Specifications of chosen Wind Turbine 16 Figure 11: Minimum Required Area Calculations 16

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CHAPTER 1. INTRODUCTION 1.1 Canada and Wind Energy Canada has been utilizing wind energy for many decades. At the end of 2011, wind power generating capacity was 5,265 MW, providing some 2.3% of Canada's electricity demand (Blackwell, 2012). The Canadian Wind Energy Association has set a future goal for wind energy capacity of 55,000 MW by 2025, meeting 20% of the country’s energy needs (canWEA,Wind Vision 2025). Canada is geographycally well suited makes to harvest large amounts of wind energy. Development of wind power farms in Canada results in grid-wide energy savings and reductions in greenhouse gas emissions. Canada has huge wind potential on its remote areas which are strategicly located to capture wind power and also export it. Prince Edward Island is one these places where site proposal is made to develop a new wind farm project. 1.2 Prince Edward Island (PEI) Prince Edward Island (PEI) is a Canadian island and province which consists of the mainland and nearby small islands (Figure 1). Prince Edward Island’s wind energy resource is one of our province’s strongest and most valuable natural assets (PEI Energy Corporation, 2008). The economy of province is largely dominated by farming, as it produces 25% of Canada's potatoes (Weihs, 1995). According to the 2011 census, the province of Prince Edward Island has 145,855 residents. The entire province has a land area of 5,685.73 km2.

Figure 1: Map of Canada and Prince Edward Island Source: Center For Energy, 2002-2014

Almost all local electricity generation of island comes from wind energy. For times of peak load, fossil fuel is used to satisfy power demand; however, more than 66 percent of its electricity is obtained from New Brunswick via cables under Northumberland Strait (Center For Energy, 2002-2014). 1.3 Conclusion Aim of this report is to identify the potential for wind power development on a specific site chosen in Prince Edward Island. The scope of this project includes wind potential assessment, availability of existing infrastructure followed by planning and permission process including public reception and brief analysis of financial support systems and potential for profit.

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CHAPTER 2. Wind Potential Assessment Prince Edward Island's primary energy resource is wind. Therefore, use of natural gas and coal for power generation is not a necessity. PEI has descent amount of wind blowing across the island. According to Canadian Wind Energy Atlas, annual mean wind speed is slightly over then 8 m/s measured at the height of 80m, which makes wind farm developments feasible in the chosen site (see Figure 2 and Figure 3). (see Appendix A- Table 3, Figure 7,8 for more detailed Wind Data)

Figure 2: Annual mean wind speed of Prince Edward Island Source: Environment Canada, 2008

Figure 3: Location of the Proposed Site Source: Google Maps, 2014

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CHAPTER 3. Infrastructure For the successful development of Proposed Wind Farm, developers must carefully analyze existing infrastructure and their availability. In this chapter, different infrastructure types will be evaluated in terms of their support for the Proposed Wind Farm Development. 3.1 Harbors Historically, harbors such as Charlottetown, Summerside, Borden have played crucial role in transportation network of Island. Borden is the closest one to the mainland. Furthermore, due to its manevuerability and area size, Port Borden exhibits true potential for transportation of turbine parts to the island. 3.2 Confederation Bridge The Confederation Bridge (Figure 4) links Prince Edward Island with mainland New Brunswick, Canada. The bridge is 11 m wide and 12.9 km long. This bridge plays an importamt role in every aspect of islanders` lives. Therefore, risk assessment must be done if the bridge is used for transportation. Nevertheless, use of bridge is quite unlikely, hence tranportaion units weigh around 70 tonnes (see Appendix C- Figure 10).

Figure 4: Confederation Bridge. Source: Wikipedia, 2014

3.3 Road Network The Island has the highest concentration of roadways in Canada (Figure 5). The provincially-managed portion of the network consists of 3,824 km of paved roadways and 1,558 km of non-paved or clay roads (Government of PEI, 2014).

Figure 5: Road Network of PEI. Source: Government of PEI, 2014

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3.4 Utility Network Prince Edward Island currently has two 100-megawatt cables across the Northumberland Strait which are owned by the Province and managed by Maritime Electric Company Limited (Maritime Energy Assoc., 2014).

Figure 6: PEI utility system owned by Maritime Electric Company Source: Maritime Energy Assoc., 2014

Utility line is in a good shape, however, in the future as wind developments increase in the area, necessity to upgrade the capacity of grid may arise. For proposed wind farm, the only challenge seems to be the 18 km distance between the site and the transmission lines (Figure 6). This indeed would add extra cost to the system. Furthermore, developers must construct new transmission line with minimal damage to nearby areas where intensive agricultural activities take place.

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CHAPTER 4. Planning and Permission process including Public Reception In this chapter, critical stages of Proposed Wind Farm Development will be discussed. These include Wind Farm Design Process, decision on Power Capacity, Turbine type, Number of Turbines, Estimated Cost of Wind Farm, Land Acquisition, Permitting and Public Consultation followed by possible effects of this project on Tourism, Environment and Agriculture. 4.1 Wind Farm Design PEI has a total peak electrical load of over 240 MW and the Island's seven wind facilities have a combined generating capacity of 173 MW. Currently, 34 percent of generated wind power is used for local demand, while rest being exported off-island based on existing purchase agreement between grid owner and another jurisdiction (see Appendix B- Figure 9). Around 66% of its electricity is obtained from New Brunswick via cables under Northumberland Strait. Island doesn’t use its fossil fuel plants until there is an interruption of supply from off Island (Government of PEI, 2014). For an island, which has significant wind potential and wind farm development experience, 66% of grid dependency is too much. Therefore, addition of new wind farm with 20 MW to electricity network of this island is a promising opportunity. After installment of this new wind farm, both wind power used in local consumption and wind power exports of Prince Edward Island will increase by 10 MW. As a result, this project will decrease grid dependency by 8% while increasing the exports by 24%. Table 1 below shows how the current electricity generation and consumption breakdown will be affected after the installation of New Wind Farm with the capacity of 20 MW. Table 1: Electricity generation and consumption breakdown. Current Situation After installation of 20MW

New Wind Farm Total Electricity Consumption

121 MW * 121 MW *

Total Wind Power Generated

83.5 MW will increase to 103.5 MW

Total Wind Power Consumed

41MW will increase to 51MW

Wind Power Exported 42.5 MW will increase to 52.5 MW Wind power in total electricity consumption

~34% will increase to ~42%

*This is the nominal power consumption in island. Value is subject to +/- 1.6% change.

Source: Government of PEI, 2014

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Island already has several operating wind farms (Maritime Energy Assoc., 2014). Therefore, to estimate new design parameters for proposed wind farm, data from existing wind farms are used (Table 2). Table 2: Design Paramenets of New Wind Farm based on existing wind farms in island. Wind Farms

Owner Company

Turbine Type

Quantity Capacity Commissioned

Cost

Aeolus Wind Farm (existing)

Aeolus Wind PEI

Vestas V90 – 3 MW

1 3MW 2002 ~$30 million

Eastern Point Wind Farm Project (existing)

PEI Energy Corporation

Vestas V90 – 3 MW

10 30MW 2007 ~$47 million.

North Cape Wind Farm (existing)

PEI Energy Corporation

Vestas V-47 - 660 KW

16 10.56 MW

2003 ~$21 million

Norway Wind Farm (existing)

Suez Renewable Energy NA

Vestas V90 – 3 MW

3 9MW 2007 ~$30 million

Summerside Wind Farm (existing)

City of Summerside

Vestas V90 – 3 MW

4 12MW 2009 ~$24 million

New Wind Farm (Proposed)

PEI Energy Corporation

Vestas V90- 2 MW

10 20MW Planning September 14, 2014

~$40 million *

* Estimated cost for the new wind farm based on the cost of existing wind farms

Source: Maritime Energy Assoc., 2014 4.2 Local Partnership The wind farms owned and operated by the PEI Energy Corporation have a capacity factor in the 40% range.In many other jurisdictions, capacity factors are in 30% range. This difference results in $10 million more annual revenue taken from the operation of wind farms (PEI Energy Corporation, 2008). Therefore, partnership with PEI Energy Corporation is essential. 4.3 Land Acquisition Typical turbine spacing in wind farms is placing the towers 5 to 10 turbine diameters apart, depending on local conditions (National Renewable Energy Laboratory, 2014). Due to the lack of current knowledge on local conditions, spacing between turbines is chosen to be 5 turbine diameters apart to find the minimum area required for the wind farm. Based on calculations (see Appendix D – Figure 11) minimum required land area is 0.77 km2. Although site proposed for a new wind farm is not located in any private property, agricultural fields surround it. Therefore, concerns regarding land leases and revenue sharing will be prioritized in the evaluation of wind development projects. Developers needs to be stimulated to come together with local partners to discuss payment systems that benefit both the landowners and others who may be affected by the project itself (PEI Energy Corporation, 2008).

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4.4 Permitting Process Since Prince Edward Island introduced its Island Wind Energy strategy in 2008, the province has become a world leader in wind power development (Government of PEI, 2014). Regulations under the Renewable Energy Act designate certain areas where wind development projects may occur. The regulations also allow for development outside the designated areas if the wind regime is strong and other requirements are met. In addition to meeting the requirements of the Acts, prospective developers will be encouraged to minimize the impact of development on the landscape. Evaluation criteria will favor large scale developments over smaller scattered projects (PEI Energy Corporation, 2008). Proposed site for new wind farm development falls under the second category where additional permitting required since the site is not located in designated area. 4.5 Public Consultation “Government recognizes that while wind is a shared resource across our Island community, wind farms can have a disproportionate impact on the local area. The turbines themselves and the transmission infrastructure needed to move the energy from the wind farm to the electrical grid change the landscape. Therefore developers are responsible to engage the community in discussion and secure support for their proposal. Government also recognizes that local communities must share in the benefits from wind energy. Proceeds from wind farms will be invested in a Community Trust Fund for use by community groups in the region where wind farms are located. This Trust will support local community groups in areas such as youth, senior recreation, arts & culture. Through the Community Trust Fund, wind energy development will help make local communities more vibrant” (PEI Energy Corporation, 2008). Furthermore, islanders can also benefit from new job opportunities and dividends paid by developers. There hasn’t been any major social objection toward wind farms in this area. If all the steps followed as they are mentioned above, scenario will be the same for the wind farm proposed in this paper. 4.6 Tourism Prince Edward Island attracts tourists from all around the world. Development of infrastructure such as bridge connecting island with mainland, and dense transportation network of island facilitated development of tourism in this area. Therefore, wind farm developers must be cautious about touristic acitivities in island. On the contrary to traditional practicies, in this island wind farms are marketed to attract more tourists. Not only does the wind farm serve as a source of electricity, but also attracts over 60,000 tourists per year. The nearby restaurant and gift shop generates approximately $260,000 in annual sales (Department of Environment, Energy and Forestry, 2008). Therefore, proposed wind farm project is benign toward tourism in this area as it is located well beyond major cities close to coastline. 4.7 Environmental Impact Assessment Replacing fossil fuels with renewable energy sources is indeed an effective way to deal with climate change issues in several countries. Prince Edward Island is particularly vulnerable to the impacts of climate change, including rising sea levels, storm surges and coastal erosion. For these reasons, Government of Prince Edward Island will significantly increase the renewable portfolio standard (RPS) for electricity. Proposed Wind Farm Project will be subject to the provincial environmental impact assessment process that will include assessment of changes to local habitat and impacts on wildlife, particularly plant and animal species at risk (PEI Energy Corporation, 2008).

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4.7.1 Carbon Footprint Using wind energy reduces the environmental impact of generating electricity because it requires no fuel and does not produce pollution or greenhouse gases. For example, a single installation of six 65 kW wind turbines in Newfoundland is expected to produce approximately 1 million kWh of electricity a year and reduce CO2 emissions by approximately 750 tonnes (Department of Environment, Energy and Forestry, 2008). Reducing greenhouse gas emissions is of one the top priorities of the Government. New Wind Farm with 20 MW capacity is expected to result in a reduction of CO2 emissions by 133,170 tones annually (U.S. Environment Protection Agency, 2014). 4.7.2 Auto Transportation Wind energy can be used to reduce reliance on fossil fuels. Energy harvested from wind may also be converted to hydrogen gas and used as a form of fuel for transportation or stored for future power generation. Therefore, territories like PEI that don’t have fossil fuel reserves or don’t extract them may benefit from the use of green electricity or stored hydrogen gas as a main source of fuel for vehicles when importing fossil fuel is more costly. In general, proposed wind farm will play important role to address concerns of Government of PEI regarding the negative impacts from increasing amount of cars in island in recent years. 4.8 Agriculture Agriculture is an important contributor to economy of Prince Edward Island (PEI Potato). However, more than 20% of CO2 emissions of Prince Edward Island come from agricultural activities. In order to mitigate emissions, government has taken initiatives and started a re-forestation program. Due to Program regulations empty lands are subject to re-forestation (Department of Environment, Energy and Forestry, 2008). This endeavor of government may conflict with interests of developer on this specific site proposed for potential wind farm. Overall, wind energy is compatible with agriculture and creates alternate revenues for farmers who lease their land.

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CHAPTER 5. ECONOMIC AND FINANCIAL ANALYSIS Dominance of Prince Edward Island is growing in the marketplace—and they will maximize the payments Islanders receive from wind energy developments. Wind energy is essential to supply reliable source of electricity that will help to stabilize sale prices for Islanders and contribute to a greener environment. And wind energy export strategy will be established in a way that will provide the greatest benefits to landowners, businesses and communities. The more wind energy Prince Edward Island is able to integrate in the provincial electricity mix, the less vulnerable ratepayers will be to the volatility in the world oil market and rising costs of other fuel sources (PEI Energy Corporation, 2008). Therefore, one can conclude that there is a fertile layout for new wind farm developments. 5.1 Financial Support Systems Prolific financial footing and strong development experiences are required for wind farm development throughout its life cycle. Potential wind power developers are interested in to locate their projects in Prince Edward Island. Government investment is envisioned in securing a new cable transmission infrastructure. Therefore, provincial sales tax exemptions will not be offered on wind energy equipment and significant government subsidies should not be expected. According to Maritime Electric, evaluation criteria will favor development proposals that demonstrate a proponent’s financial strength as well as previous proven wind generation development and operational experience (PEI Energy Corporation, 2008). Therefore, referring to private investors is the key to successful implementation of proposed wind farm projects. Because of the estimated cost being approximately $40 millions for Proposed Wind Farm, fundraising with no government subsidies seems very challenging. 5.2 Potential for Profit Due to low construction and transmission costs, there is a close partnership between Government of Prince Edward Island and New England States where there is a growing demand for clean energy resources. By 2025, the New England states will require an additional 9,000 MW of renewable energy (PEI Energy Corporation, 2008). This must be considered as a real business venture with sound potential for profit.

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CHAPTER 6. CONCLUSION This project is proposed for a very specific site in Prince Edward Island. Through the document, different stages of wind farm development have been discussed. This proposal may have a real value from developer`s perspective since it covers most critical issues such as identification of perspective site for wind farm development, wind farm design parameters, assessment of available infrastructure, permitting processes and social acceptance issues followed by concerns about environmental impact and financial support. Therefore, this proposal document may function as a first screening for a developer very well. As a result of discussions made throughout the whole report, one may conclude that site has very promising features to facilitate wind farm development. Proposed site has strong wind energy records. Furthermore, site is chosen very close to transportation network to ease the construction and installment phases. Area is surrounded by agricultural fields and forests, hence, developers must be ready to share their revenue with farm owners plus minimize potential damage to environment during any stage of development. Permission phase seems to be very challenging since there are conflicting interest between Government of Prince Edward Island and developers. Hence, Government plans re-forestation processes in this area along with rest of the island to decrease the CO2 emissions from agricultural activities. Other than that, legislative framework is up and running in the favor of wind power developments. Another factor that may cause unexpected challenge is financial support system. Back in the time, Government has given significant subsidies to finance the wind farm projects, however, in recent years Government reserved its budget to upgrade the utility system. Therefore, developers should refer to private investors for financial support. Tourism benefits from wind farms attracting more tourists annually. That also would be noteworthy to mention that development will not suffer from social opposition if they are fully involved in and benefit from shared revenues. However, sound emissions and shadow effect may have negative results on natural habitats and cause severe consequences for islanders since agriculture is the backbone of economy. In the end, after conducting more detailed analysis about the whole situation in the island, developing new wind farm seems very feasible in this area.

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LITERATURE Canadian Wind Energy Assocciation (CanWEA).Wind Vision 2025.[Online] Availabe from: http://www.canwea.ca/images/uploads/file/windvision_summary_e.pdf [Accessed: September 14, 2014] Richard Blackwell (Feb 8, 2012). "Wind power sails on despite local buffeting". Globe and Mail. http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/wind-power-sails-on-despite-local-buffeting/article2330974/?%20Resources [Accessed: September 14, 2014] PEI Potato.PEI Potato.[Online] Available from: http://www.peipotato.org/potato-industry [Accessed: September 14, 2014] Environment Canada (July 29, 2008). Canadian Wind Energy Atlas. [Online] Available from: http://www.windatlas.ca/en/nav.php?field=EU&height=80&season=ANU&lignes=1&roads=1&lat=46.465944&lon=-63.490167&postal=&no=12 [Accessed: September 14, 2014] Center for Energy (2002-2014). Energy Facts&Statistics.[Online] Available from: http://www.centreforenergy.com/FactsStats/MapsCanada/PE-EnergyMap.asp [Accessed: Septerber 14, 2014] Weihs, Jean (1995). Facts about Canada, its provinces and territories. New York: H.W. Wilson Co. p. 159. Government of Prince Edward Island (2014).Department of Finance, Energy and Municipal Affairs.[Online] Availabe from: http://www.gov.pe.ca/energy/js/chart.php. [Accessed: September 14, 2014] Government of Prince Edward Island (2014).Department of Transportation and Infrastructure Renewal.[Online] Available from: http://511.gov.pe.ca/en/map_report.html [Accessed: September 14, 2014] Maritime Energy Assicciation (2014).Prince Edward Island.[Online] Available from: https://www.maritimesenergy.com/page.asp?ID=61 [Accessed: September 14, 2014] PEI Energy Corporation. “ Island Wind Energy: Securing our Future: The 10 Point Plan”, 2008. http://www.gov.pe.ca/photos/original/wind_energy.pdf. [Accessed: September 14, 2014] Vestas (2014).Productions&Services. [Online] Available from: http://www.vestas.com/en/products_and_services/turbines/v90-2_0_mw#!technical-specifications [Accessed: September 14, 2014] U.S. Environmental Protection Agency (2014).Greenhouse Gas Equivalencies Calculator.[Online] Available from: http://www.epa.gov/cleanenergy/energy-resources/calculator.html#results [Accessed: September 14, 2014]

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National Renewable Energy Laboratory (2014). Wind Farm Area Calculator. [Online] Available: http://www.energybc.ca/cache/wind2/www.nrel.gov/analysis/power_databook/calc_wind.html [Accessed: September 14, 2014] Department of Environment, Energy and Forestry. “Prince Edward Island and Climate Change: A Strategy for Reducing the Impacts of Global Warming” Government of Prince Edward Island, 2008. http://www.gov.pe.ca/photos/original/env_globalstr.pdf, accessed September 14, 2014 Wikipedia (2014). Pano Confederation Bridge. [Online] Availabe from: http://en.wikipedia.org/wiki/Confederation_Bridge#mediaviewer/File:Pano_Confederation_Bridge.jpg [Accessed: September 14, 2014]

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APPENDICES APPENDIX A. Numerical Values of Wind Energy Measurements for

Proposed Site in Prince Edward Island @ 80 meters 1.Mean Wind Speed Table 3: Annual Mean Wind Speed

Source: Environment Canada, 2008

2.Wind Rose

Figure 7: Wind Rose Source: Environment Canada, 2008

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3.Wind Speed Histogram

Figure 8: Wind Speed Histogram Source: Environment Canada, 2008

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APPENDIX B. Energy Usage of PEI

Figure 9: Energy Usage of PEI

Source: Government of PEI, 2014

*48.2% of Wind Generated accounts for only 34% of Total Electricity Consumption of Island

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APPENDIX C. Vestas V90 – 2 MW Turbine Technical Specifications

Figure 10: Technical Specifications of chosen Wind Turbine

Source: Vestas, 2014

APPENDIX D. Minimum Area Calculations for Proposed Wind Farm. Due to the lack of current knowledge on local conditions, spacing between turbines is chosen to be 5 turbine diameters apart to find the minimum area required for the wind farm. Furthermore, to simplify the calculations it is assumed that wind turbines will lie on a simple square.

Figure 11: Minimum Required Area Calculations

1) Blade Length = 44m; 2) Blade Diameter = 88 m; 3) 5 x Blade Diameter = 440 m; 4) Area of Land = 440m x 1760m = 0.7744 km2 ;