Sellout or sweet deal?

Samsung will brand Ontario as North America’s wind and solar leader, as long as Grits don’t blow the grid on nuclear.


Holy Samsung. The green energy dream is not just waking up, it’s moving in. Who knew it would have a brand name and be an immigrant from Korea? Has the provincial government sold our renewable soul to some foreign demon?[rssbreak]

Ontario announced a $7 billion breakthrough deal for green energy last week that fans say puts the province in the forefront of the North American renewable energy industry. It’s supposed to generate 16,000 jobs in the building, installing and operating of new energy projects and 1,440 more in the manufacture of wind and solar tech in four plants that will export products across North America.

The agreement will also add 2,500 megawatts of wind and solar energy to the grid, and two of the plants will be ready to go as soon as 2013.

But all this didn’t happen without some sweetening from Queen’s Park: priority access to the grid and subsidies estimated at about $400 million over 20 years, as job guarantees get fulfilled. Most contentious is the fact that the deal pole-?vaults the Samsung partnership over the heads of much smaller local contenders.

You can see why some green industry players say their interests are being sold down the river. They claim the deal privileges the Korean corp over long-?suffering locals who have been queuing up for their space on the grid, in some cases, for years.

And the NDP is also less than lukewarm. According to NDP enviro critic Peter Tabuns, “We would go further and faster with an Ontario-?controlled and mobilized public sector.”

He says that “given the access to the grid and the subsidies offered, Ontario could have gotten a better deal.” His view is that Ontario is a laggard in the development of renewable power, and he cites European and Asian jurisdictions as examples. “We have come to the party very late,” he contends.

But in a North American context, the Green Energy Act, with its feed-?in tariff, put the province far out in front of the rest of the continent and allowed it to snag Samsung.

In fact, outside the circle of industry and political competitors, the agreement is getting major kudos. In particular, Ontario’s most stalwart alt energy advocates are ready to get excited.

Of course, there’s a caveat. They say the deal will fulfill its potential only if the government follows up with more green space on the grid for everyone.

But, hey, let’s look at the sunny (and windy) side before we get to the clouds. According to long-?time renewable energy advocate and York prof José Etcheverry, “A lot of people don’t understand that the wind industry is very much like a bike or car manufacturer. You put together a product made by different manufacturers and then put your brand on it,” he says.

“We have acquired an international conglomerate that will make some of the parts for the wind industry right here in Ontario. We have beat out all the other jurisdictions in North America.”

He cites Michigan, North Carolina, Vermont, California and Quebec as just a few of the green-job-?hungry spots vying for this type of investment. “The premier was astute. The Americans want what we just got. We won against tough competitors.”

This isn’t the first or the last deal, says Etcheverry. But we shouldn’t be arguing over whether this particular one will take over the grid. “If the transmission capacity for renewables remains constrained,” as the province’s current energy plan implies, “then we are fighting for crumbs.”

“We don’t want just 2,500 megawatts in renewable energy.

“We need to expand the capacity for everyone. We could have a province that is 100 per cent green-?powered.”

World Wildlife Fund climate expert Keith Stewart agrees. He wants Canadians to understand the green example set by the Korean government. He notes that “their national stimulus spending was at about the same level as ours only 80 per cent was directed toward green initiatives, with transit as a huge focus.

“Where Canada is going down the petro route, Korea is planning to create 960,000 jobs in green energy.” Yes, 960,000 jobs.

“Part of this issue is about our overall industrial strategy,” he says. “I can see why other developers might be upset, but I see no problem with pursuing an industrial strategy. Ontario is clearly trying to get the early-mover advantage.”

He concedes that Samsung got a big head start with its access to transmission space, but for him, the real test as far as fairness and future development goes is how fast the province expands the grid for renewables.

For both Stewart and Etcheverry, the dark cloud hanging behind that unknown can be summed up in a word: “nuclear.”

Of course, Greenpeace nuclear researcher Shawn Patrick Stensil concurs. The Samsung deal is a “great announcement that shows the connection between the growth of green jobs and the growth of green industry,” he says. The industry lobby groups have “their guns aimed at the wrong enemy – each other.

“They should be talking about their common enemy, which is the current plan of reserving 50 per cent of the grid for nuclear power.”

The problem, he says, is that the government has placed a de facto cap on the development of green energy by its 2006 decision to set aside the majority of the space for nukes.

“The next and best step for Ontario is to replace the Pickering B nuclear station – just 10 per cent of Ontario’s generation – with green energy when it comes offline in 2016,” he says. “The potential is obvious, and it’s way cheaper than building a new nuke.”

Stensil has an intriguing idea about why at least one major industry group quite critical of the deal hasn’t raised the idea of expanding the grid and letting other producers have the same terms as Samsung.

The Association of Power Producers of Ontario includes nuclear operators among its wide membership base. “They have a vested interested in not asking that green energy have a bigger piece of the grid pie,” he says.

But that shouldn’t be a problem for a government that now seems to understand that the economic well-?being of the province rests in its newly won green energy advantage.

Hey, Dalton. Thanks. Now that you have nailed this amazing head start, the rest should be quick and easy. Don’t let the word “nuclear” cloud us over, and get on with the great job of making way for Ontario’s breezy and bright energy future.

alice@nowtoronto.com

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