Chasing green energy boasting rights

 

Ontario surges past British Columbia with C$7 billion wind, solar power plan

 

BY GARY PARK FOR GREENING OF OIL 

Message to Gordon Campbell, premier of British Columbia, self-proclaimed Canadian leader of the fight against greenhouse gas emissions: Don’t look now, but you have just been overtaken.

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The province of Ontario has seized the front-runner position as the go-to jurisdiction in Canada for green energy investment, locking up a C$7 billion deal with a Korean consortium to develop wind and solar power over 20 years.

“Ontario is probably the hottest market in Canada,” said Michel Letellier, chief executive officer of Innergex Renewable Energy, a Quebec-based firm with operations in British Columbia and Ontario.

“I think Ontario and B.C. are definitely going at it—it’s a good fight,” he said.

British Columbia rises to challenge

B.C. Energy Minister Blair Lekstrom is rising to the challenge, telling the Globe and Mail that the “clean energy sector is the oil and gas sector of the future. We’re going to take British Columbia and become a green energy powerhouse, not just in Canada, but in North America.”

The Ontario deal is with the giant Samsung industrial group and Korea Electric Power (54 percent owned by the South Korean government), with the goal of tripling the province’s capacity for generating renewable energy.

The target—2,000 megawatts of wind power from as many as 1,000 turbines and a 500 megawatt solar farm—could meet the needs of 580,000 households.

In addition, the pact provides for the construction of four plants to build

components such as towers, modular assemblies, turbine blades and solar inverters.

Sixteen thousand new jobs

The total undertaking is forecast to create 16,000 new jobs, about one-third of the way to the province’s target of creating more than 50,000 green energy jobs that will replace a fraction of the hundreds of thousands of manufacturing jobs lost in recent years.

Ontario Premier Dalton McGuinty said the venture will add a mere C$1.60 a year to the bills of electricity consumers over 25 years.

The plan also sets the stage for Samsung to anchor a cluster of companies outside Ontario to export clean electricity to the North American market.

McGuinty, who rated the plan as the biggest bet yet made on green energy in Canada, said Samsung can “do something rather extraordinary here, which is put in place almost immediately a critical mass of manufacturing capacity.”

He said Ontario is trying to “lay the foundation for new economic growth” in the province.

Relinquishing sovereignty?

But energy developers and opposition members of the Ontario legislature were less than thrilled.

The energy industry said Samsung could block access to the market by other

companies because Ontario has limited capacity to transmit electricity to residential users.

They said the McGuinty government is circumventing its own program for attracting green energy investment, under a new feed-in tariff program, which pays premium prices for renewable power.

“They’re threatening to kill the feed-in tariff program before it’s even learned to walk,” said Dave Butters, president of the Association of Power Producers of Ontario.

Samsung will also be paid the feed-in rate of 13.5 cents a kilowatt hour for the wind power it produces and 44.3 cents for the solar power.

Tim Hudak, leader of the Ontario Progressive Conservative Party, said there are no guarantees in the deal covering job guarantees, while Peter Tabuns, a New Democratic member of the provincial legislature, said McGuinty is relinquishing sovereignty over a portion of Ontario’s electricity generation to a foreign government.

Campbell distracted by upcoming Olympics

Campbell, distracted by the upcoming Winter Olympic Games, seems to have lost sight of his 2007 promise to

make British Columbia self-sufficient in electrical generation and ensure that all new capacity comes with zero GHG emissions.

There has been little evident progress toward either goal, although the province has indicated it will unveil policies in the next few weeks which Lekstrom insisted will put British Columbia “back front in a month or two.”

Ontario’s sudden surge to the forefront gives investors the option of deciding which jurisdiction offers the best return on green energy investment.

Michael Willemse, a clean-energy analyst with CIBC World Markets, said the interprovincial competition is no different from what “we look for in any company—an adequate return on capital investment and if they have a good tailwind to move them along.”

Harvie Campbell, executive vice president of Calgary-based Pristine Power, which has projects in four Canadian provinces, gave Ontario and British Columbia high marks for their green policies and is certain British Columbia will regain its lead position through calls for clean energy proposals that are expected to attract C$3.5 billion in investment.

 

Contact Gary Park through Kay Cashman at publisher@greeningofoil.com