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Business Risks
The risks identified below are specific to the Green Power segment. General risks that affect the Fund as a whole are described under Risk Factors.
Variable Wind Resource
The generation of electricity associated with the Fund’s interest in its wind power projects is dependent on the wind resource at each location. The wind resource fluctuates daily and seasonally. The Fund reduces its exposure to these wind resource fluctuations through PPAs, which provide fixed prices for the electricity produced. The actual long-term wind resource attained at each of the wind power projects has generally met or exceeded the expected wind resource, forecast by extensive long-term wind studies. However, there is no assurance the wind resource and thus electricity generation at each location will continue to meet expectations.
Dependence
The NRGreen waste heat recovery facilities generate electricity from the waste heat emitted from Alliance Canada’s compressor stations. As a result, any shutdowns for maintenance or reduction in activity at these compressor stations will have a negative impact on the level of production for NRGreen.
Counterparty Risk
The primary source of fixed price revenue for each wind project and for NRGreen is a single counterparty. The stability of the Fund’s revenue and cash flows from this segment is dependent upon the ability of these counterparties to pay their monthly charges. If these counterparties are unable to fulfill their obligations under their purchase agreements and an alternate counterparty is not available, Wind Power would be exposed to variable power prices. This risk is mitigated by investment grade requirements of the counterparties involved.