After nearly two years of planning, Teck now officially owns the Kimberley SunMine with the sale having closed on December 30, 2019.
Mayor Don McCormick explained that the sale went through at the end of 2019, with the City signing a contract to continue to complete the maintenance work for the next year.
The Mayor spoke to the history of the SunMine and why the City decided to sell in the first place.
“The idea was brought forward by EcoSmart in 2008. An analysis [at that time] showed that no private sector would want to invest because the return on investment would take too long,” McCormick said, adding that many private sector businesses want a two year return on investment, as opposed to 20 years.
He said that the SunMine have been possible in the first place without outside investment and grants. He pointed to the majority of funding, which came from the City of Kimberley, Teck and the provincial Clean Energy Fund.
“The result was spectacular,” said McCormick. “The SunMine has been a major factor in the rebranding of Kimberley. It has won national awards, and has allowed us to get marketing exposure that we never would have been able to afford.”
If it has been so successful, why sell? McCormick says it’s mostly for financial reasons.
The original business case predicated 2 MWp, McCormick explained. At the eleventh hour, just months before construction was to begin, Western Economic Diversification (WED) retracted their $1.6 million that they had originally committed.
“Council had to decide wether to delay the construction and raise the funding, or move ahead. We decided to go ahead, with the $5.4 million facility at 1MWp. The decision was made but the business case was weak at barely break even,” said McCormick.
The City was able to prove that running the SunMine was viable, but 2MWp would be needed to generate the required cash flow to make it self sustaining.
“Kimberley tax payers were at risk of having to subsidize that second MWp,” said McCormick. “The City didn’t have the money to expand, so we needed a partner who was in a position to invest.”
In addition to finding a partner, the City had to work with BC Hydro in approving or assigning the process for expansion.
“BC Hydro really accommodated the City in the assignment to Teck,” said McCormick. “They were awesome to deal with.”
He adds that the City spoke with around a dozen companies, but Teck came out as the best choice for several reasons.
“First of all, that land, the brownfields that the SunMine is built on, those are Teck lands,” said McCormick. “Secondly, they [Teck] were already substantially invested at $2 million.”
He went on to say that solar energy also fits within Teck’s sustainability strategy.
“The fourth reason is that they have the resources to expand at such a time that makes sense for them to do so,” said McCormick.
In terms of the expansion, McCormick said he couldn’t speculate on a timeline, but the City and Teck will continue to work together on future plans.
Although Teck is now officially the owner, the Mayor says the SunMine still an asset for Kimberley and its legacy will live on.
“This is exciting for us,” he said. “It’s still a community asset but we’ve reduced the risk to taxpayers while increasing the probability of expansion.”