Norwegian solar company delays N.B. plant

Umoe Solar is postponing the construction of a solar project slated for Miramichi, N.B., blaming high capital costs and the uncertainty over renewable energy sales.

The company will continue developing the Miramichi site, which used to be the home of a large UPM mill, and has left open the possibility that the project will continue in the future.

"The postponement is a serious disappointment, but I am still very pleased with the co-operation with the government of New Brunswick and will continue developing our diverse activities in Miramichi and our forestry operations in New Brunswick," said Jens Ulltveit-Moe in a news release.

The company statement said the capital costs have risen 20 per cent because of the rising Canadian dollar. It also said "energy costs are higher in New Brunswick than in other jurisdictions."

The Liberal government's proposed plan to sell parts of NB Power to Hydro-Québec would have given large industrial customers a significant reduction in their electricity rates.

Umoe Solar has already invested more than $10 million in project development costs.

The company statement said it plans to continue the project "at a future point in time should economic conditions improve sufficiently."

When the project was announced last September, Umoe Solar said it would need between 600 and 1,000 workers during construction, which was going to start in spring 2010.

The postponement by Umoe Solar is a further hit to the northern New Brunswick city.

When UPM closed its mill in December 2007, it left more than 500 people out of work in a community that has been dealt several economic blows in recent years.

The addition of Umoe Solar to the northern community was expected to replace many of those jobs.