In June 2008, Suncor announced plans to spend $500 million on renewable energy projects over the next five years — in addition to the $250 million it had already committed to the sector this decade. Our investments to date include four operating wind power projects — one in Saskatchewan, two in Alberta and one in Ontario — and our ethanol production facility in Mooretown, Ontario, located in the township of St. Clair.
However, the global economic crisis that emerged in the fall of 2008, concurrent with a significant drop in commodity prices, forced the company to review and reassess its spending priorities. Some difficult decisions had to be made. For example, we decided to delay construction of a proposed $120 million expansion of our ethanol production plant pending sustained economic recovery. We also opted not to proceed at this time with a proposed joint venture with Lignol Innovation to construct an $80 million USD cellulosic ethanol plant in Colorado.
Suncor remains committed to pursuing a “parallel path” for energy development — building today's oil sands industry while also helping to bring along new sources of energy for tomorrow such as wind power and biofuels at a pace and scale that reflects our financial capacity.
As Gord Lambert, vice president, sustainable development, explains, “The industry-leading investments we've already made in wind power and biofuels were only possible because of the success of our core business in the oil sands. We're now acting prudently to protect the economic viability of that core business — and thereby ensure we have the financial flexibility to continue investing in renewable energy and environmental technologies. So that five year investment timeframe may have to be stretched over a longer period. But our overall vision and objectives have not changed.”
Suncor welcomes emerging efforts in Canada and the United States to develop more comprehensive energy and climate change policies.
Challenges for Renewable Energy
Suncor has been blending ethanol in our retail fuels since 1992. In late 2006, Suncor opened the St. Clair Ethanol Plant in Mooretown, Ontario. The St. Clair plant currently produces 200 million litres of corn-based ethanol annually, making it one of the largest such facilities in Canada. If economic conditions become more favourable, Suncor may expand ethanol production to 400 million litres per year.
As Suncor discussed in its 2008 Report on Climate Change, some observers say creating ethanol-blended gasoline using corn feedstock actually produces more greenhouse gas (GHG) emissions than conventional gasoline production.
While we acknowledge those views, Suncor believes it's appropriate to look at the full life cycle of ethanol production when discussing environmental benefits. In the case of Suncor's ethanol plant, we asked the Pembina Institute to conduct two Life Cycle Assessments (LCA), which look at all of the energy inputs from the corn field to the gas pump.
From their assessment, which was peer reviewed by the U.S. government's Argonne National Laboratory, Pembina determined the ethanol from the plant would offset the equivalent of 300,000 tonnes of CO2 per year.
Suncor believes the St. Clair plant's ethanol production is best-in-class. This is based on the feedstock, technology and energy used to manufacture ethanol, and the fact that we produce an environmentally friendly by-product (i.e. material left over in the production process is used as animal feedstock).
Life cycle value assessments continue to evolve and we monitor that evolution closely. Suncor believes that analysis needs to consider site-specifics. For the potential future expansion at the St. Clair plant, we are conducting our own calculations, and are also working to understand how the assumptions used in regulatory calculations would be applied for our specific site.
Suncor is at the leading edge of the biofuels industry in Canada. We recognize it is an evolving field, with technological advances being made every day. We remain committed to our renewable energy business and believe that the biofuels industry is here to stay.
Stakeholder Concerns at Ripley Wind Power Project
Suncor, with partner ACCIONA Energy, commissioned the Ripley Wind Power Project near Kincardine, Ontario, in late 2007. This 76-megawatt wind farm, Suncor's largest, is expected to offset approximately 66,000 tonnes of CO2 annually.
The Ripley wind farm began generating power on November 24, 2007, sending electricity to Ontario's Independent Electricity System Operator. The wind farm consists of 38 two-megawatt turbines, two electrical substations and a 27-kilometre transmission line.
In 2008, a small group of community members expressed concerns about the Ripley project, including wind turbine noise and setback distances and their potential health effects. Representatives from ACCIONA and Suncor spoke extensively with community members to understand the concerns better and to answer questions.
In addition to a variety of work done at the site in 2008, ACCIONA and Suncor conducted studies with the help of third-party expert companies to determine if the wind farm was producing noise above regulated guidelines, and if electromagnetic fields (EMF) or power quality might be linked to the issues residents reported.
To mitigate any potential links not detected through the studies, a portion of the wind farm's 34.5 kilovolt collector line was buried to help address the neighbor's concerns. Some neighbors reported improvements.
Meanwhile, an acoustics study determined that outdoor audible acoustic sound levels measured at the affected residences were above the Ministry of Environment (MOE) guidelines by three to five decibels during certain periods. ACCIONA and Suncor, along with turbine supplier Enercon, corrected the problem immediately by adjusting the nearby turbines to produce lower sound emissions.
ACCIONA and Suncor conducted a second acoustics study in spring 2009 to determine if the wind farm is operating within MOE guidelines. The power quality study showed that the 120-volt power at the residences met the applicable standards. Total harmonic distortion of the power measured at the residences was 2.5 percent, below the Institute of Electrical and Electronics Engineers standard of 5 percent.
The EMF study measured electromagnetic field strength within four residences and at the power lines in front of each residence. Measurements collected inside the residences were below 0.6 milliGauss (mG) and maximum measurements collected at the power lines were 2 mG, all well below international standards.
ACCIONA and Suncor will ensure our stakeholders' concerns continue to be heard and will work to keep the lines of communication open. The partners have enlisted the help of the Grey Bruce Health Unit to better understand possible health issues, and are supportive of a province-wide multi-stakeholder health study. We consider our relationship with the Ripley community to be for the long term and one that should be mutually beneficial.
The Ripley Wind Power Project will continue to produce clean energy for 24,000 Ontario homes, with the clear goal of maintaining regulated guidelines and a good neighbor policy that minimizes our impact on the community.