Plutonic plans to go big with hydro

Vancouver, British Columbia-based Plutonic Power (TSX: PCC), a developer of run of river hydro power projects, has put together 21 of its potential power sites into a giant 1,000 megawatt bid in response to a request for cleantech power proposals from the government-owned British Columbia Hydro and Power Authority.

Canada's Plutonic isn't going it alone in the bidding process, teaming up with GE Energy Financial Services on the Cdn$4 billion project. GE Energy Financial Services is part of Fairfield, Conn.-based General Electric (NYSE: GE).

British Columbia Hydro and Power Authority, known as BC Hydro, is looking for up to 5,000 gigawatts per year of renewable energy. A number of renewable energy developers are likely to make a play for a piece of that pie, but Plutonic could have a lead in run of river proposals.

"Plutonic by far and away has the largest amount of run of river capacity that will be bid into the call for tender," said Donald McInnes, vice-chairman and CEO of Plutonic, in a conference call today.

He said that by megawatts, the company's largest competition will come from wind farms which he expects will be located in the Peace River and Queen Charlotte Island areas — both more than a thousand miles from Vancouver, the province's center of electrical load demand.

"We think, given our proximity to Vancouver, that we will be extremely competitive in the call for tender."

Run of river projects do not use dams, instead diverting some of the water from a river into a pipe which sends the water downhill to a generating station. Gravity creates the energy needed to spin the turbines that in turn generate electricity. Plutonic said the water is then returned to the river without altering the existing flow or water levels.

This isn't the first time Plutonic and GE Energy Financial Services have gotten together on hydro power. Last year, Plutonic partnered with the GE unit on a run of river project at the headwaters of the Toba Inlet on the East Toba River and Montrose Creek (see Plutonic signs $500M hydro construction contract). That project is still under construction.

Plutonic's latest deal with GE's financial group covers the Upper Toba Valley Project, a series of three sites with a capacity of approximately 120 MW, and the Bute Inlet Project, 18 sites with an approximate capacity of 900 MW. The projects are in the permitting and review stages of a government environmental assessment process.

If BC Hydro accepts their joint bid, GE Energy Financial Services will invest Cdn$70 million for a 50 percent interest in the Upper Toba Valley Project. Another Cdn$650 million will go toward the Bute Inlet Project for a 60 percent interest, with the GE group potentially taking on other partners for that stake.

Although the projects are estimated to have a total pricetag of Cdn$4 billion, Plutonic said it's prepared for the possibility of rising costs.

"If capital costs go to a certain point, the project at this point is capable of absorbing a lot more debt than we currently feel that will be there or required to be put in the place to make the project work," said McInnes.

If the project goes beyond that undisclosed certain point, McInnes said Plutonic could end up making a further equity contribution or lowering its stake.

The GE investment only kicks in once the bid is accepted by BC Hydro. Plutonic is responsible for all of the costs of permitting, public consultation and environmental assessment certification.

BC Hydro is expected to announce its final decisions on the clean power contracts in mid-April through June of next year.

Plutonic is developing a total of 40 run of river facilities in British Columbia.

Cleantech developments making news in the past 24 hours

• Qteros claims 15-fold improvements in cellulosic ethanol yield
• Solairedirect raises €20M to move into commercial solar
• Intel, Numonyx open $20M water treatment plant in Israel
• Booming data-center business creates troubles for India

View the last week of cleantech developments here | Subscribe to full feed