Energy Manager

News
Ontario government makes controversial green power deal with Samsung

The Ontario government has signed an agreement that will bring more green energy and new jobs to Ontario. A consortium led by Samsung C&T Corporation and the Korea Electric Power Corporation (KEPCO) will invest $7 billion to generate 2,500 megawatts of wind and solar power. These projects will triple Ontario's output from renewable wind and solar sources and provide clean electricity to more than 580,000 households.


January 22, 2010
January 22, 2010
By EM Staff

The government also believes it will lead to more than 16,000 new green energy jobs to build, install and operate the renewable generation projects.

“Thanks to today’s announcement, we will be delivering more green energy for Ontarians to use — and more green energy products for North America to buy. With this step, Ontario is becoming the place to be for green energy manufacturing in North America,” says Premier Dalton McGuinty.

The deal has been receiving mixed reviews all around. While the renewable energy additions are welcome, the price tag it comes with — and the fact it allows Samsung’s consortium to jump the line for access to the grid before homegrown power producers — are the sticking points.

The Ontario Electricity Coalition (OEC), for instance, fully supports windmills and green jobs. But the OEC released a statement noting that it “is not in favour of private power deals which will hurt the people of Ontario for decades.”

Advertisement

“The Samsung deal is not just about manufacturing wind turbines. It is a private scheme to generate electricity at outrageous (and therefore secret) rates – for years to come,” said OEC spokesperson, Paul Kahnert. “Every penny of Samsung’s mega profits will come out of the pocket of Ontario’s electricity consumers and business owners. Ontario’s public electrical utilities can buy, install and maintain made-in-Ontario windmills — without the likes of Samsung — at a much lower cost.”

The Korean consortium will work with major partners to attract four manufacturing plants. This aims to create 1,440 manufacturing and related jobs building wind and solar technology for use in Ontario and export across North America.

Renewable energy provided by the Consortium would qualify for Feed-In Tariff prices available to all eligible projects.

In addition to the standard rates for electricity generation, the Consortium will be eligible for more money based on certain production targets — a total of $437 million, if the manufacturing facilities are built according to the schedule set out in the agreement.

The agreement calls for the following:

* Towers – in full operation by March 31, 2013
* Solar Inverters – in full operation by March 31, 2013
* Solar Module Assembly – in full operation by December 31, 2013
* Blades – in full operation by December 31, 2015

These manufacturing facilities will produce wind turbine towers, wind blades, solar inverters and solar assembly in Ontario, creating ostensibly more than 1,440 manufacturing and related jobs in the renewable energy industry. The local availability of these manufactured components are considered by the government as a boon to other renewable energy developers looking to meet the Feed-In Tariff’s (FIT) domestic content requirements. An additional 700 manufacturing jobs are also anticipated to supply components not manufactured by the Consortium.

The $437 million cash infusion by the Ontario government is expected to add on average $1.60 annually to a residential bill over the lifetime of the generation contracts — an increase of about 0.1 per cent on a typical residential electricity bill.

The Consortium is aiming for the construction of 2,500 megawatts (MW) of renewable energy generation, 2,000 MW of wind power and 500 MW of solar.  Construction is expected to occur in five phases, commencing in 2012. The first phase of the project is scheduled to be completed in 38 months. It will be a 500MW cluster (400MW of wind and 100MW of solar) that will be built in the Chatham-Kent and Haldimand County regions of Southern Ontario.

The consortium fully intends to use Ontario-made steel in its renewable energy projects, such as constructing its wind turbine towers.

This is the single-largest investment in renewable energy in provincial history.