Ontario Premier McGuinty is expected to announce a huge renewable power deal with Koren industrial giant Samsung tomorrow. The deal would see Samsung make substantial investments in the renewable power manufacturing facilities and projects and could create up to 15,000 direct and indirect green collar jobs in the province. Worth an estimated $7 billion, the deal will nevertheless continue to evoke mixed reaction in the province. It is also the latest volley in a battle between Ontario and B.C. to become the go-to jurisdiction for clean energy investment.
While the official announcement will come tomorrow, the existence of the negotiations has been one of the government's worst kept secrets (we first reported on it last November on our climate change law blog). According to the Toronto Star, Samsung will agree to build significant renewable equipment manufacturing capacity and to construct 600 MW of wind and solar farms in the province (perhaps making Samsung its own best customer). That scale of project development estimate aligns closely with the 500 MW of grid capacity that former Minister Smitherman ordered the Ontario Power Authority to hold in reserve at the end of last September. In the same directive, he specifically ordered that 100 MW of the 500 MW limit on utility-scale solar development be held in reserve as well. These special directives, combined with generous subsidies and access to the province's new feed-in tariff rates for power, would appear to make for a very sweet deal for Samsung.
However, not everyone in the province is enamoured with the deal. Other project developers in the sector do not understand why Samsung is receiving preferential treatment. David Butters, president of the Association of Power Producers of Ontario, told the Star that his organization feels the deal is "just fundamentally wrong at every level of public policy we can think of. The industry feels they've been thrown under the bus here. I think there's a feeling of betrayal." In a letter to the Premier, the Canadian Wind Energy Association and Canadian Solar Industries Association added "[b]esides the financial and political uncertainty this creates, it puts one company in a vastly better position than all others: this is manifestly unfair."
Nevertheless, the deal is no doubt very attractive to the government. Generally, it could help revive a manufacturing sector that has been decimated by the recent financial crisis and the struggles of the auto sector. More specifically, it could move the government 15,000 jobs closer to its commitment of creating 50,000 green collar jobs through the reforms of the Green Energy Act.
This latter achievement would be a very significant one for Ontario. As discussed in today's Globe and Mail, Ontario is competing with British Columbia to become the renewable energy hub of Canada. Even before the Samsung deal, at least one prominent renewable developer told the Globe that "Ontario is probably the hottest market in Canada." Blair Lekstrom, B.C.'s Energy Minister, believes that his province may reclaim the lead: "I look at the clean energy sector as the oil and gas sector of the future," he told the Globe. "We are going to take British Columbia and become a green-energy powerhouse, not just in Canada, but in North America." Regardless of the who wins, the competition will no doubt produce big wins, both for both provinces and for the renewable power industry.