By Tyler Hamilton
I have a
column in today's Toronto Star that's bound to upset a
number of solar and wind developers, and the investors behind them.
I argue that the $7 billion Samsung deal announced last week in
Ontario isn't a bad deal at all, and that Ontario was right to jump
on the opportunity when it presented itself. The deal is controversial because the government
gave Samsung an "economic adder" that amounts to a 4 per cent
premium (on a price per kilowatt-hour basis) to existing
feed-in-tariffs available to other solar and wind developers. The
government also set aside 500 megawatts of transmission capacity
for Samsung, which in addition to building four manufacturing
plants (wind blades, wind towers, solar inverters and solar
modules) also wants to deploy 2,000 megawatts of wind and 500
megawatts of solar in Ontario.
Samsung has said publicly that it
plans to become the largest maker of solar panels by 2015, and
wants to become a major player in wind. The fact that it chose
Ontario as the launchpad is significant. This is a huge deal, and
while not perfect, it has the potential to bring tremendous
long-term benefits to Ontario. Sure, other developers would love
the special treatment Samsung got, but have those developers been
willing to step up, develop a comprehensive supply chain, and sign
a deal that commits them to X amount of renewables and create X
thousand amounts of jobs? My only big criticism of this deal is
that the government may be overlooking some amazing Ontario-made
opportunities - local consortia who have big plans but can't seem
to get the attention and support of the Ontario government. This
apparent lack of confidence in local entrepreneurs and investors
doesn't send a good signal. Premier Dalton McGuinty needs to do a
much better job of nurturing and having confidence in local
ventures, even if they lack the deep pockets and brand appeal of an
anchor tenant like Samsung.
Were smaller developers in Ontario betrayed? I can see why they
think so, but I don't recall anyone in the current government ever
saying the feed-in-tariff program is the only way they will sign up
renewables (or any source of power generation) in the future. What
the feed-in tariff program and Green Energy Act does is let these
developers access the program, equally, without having to go
through an expensive RFP process. The fact is the FIT program, as
it is, is more than generous to these developers. And while
transmission is scarce, there's a solid commitment to build more.
So there is a bigger picture here, one that needs to be put into
perspective.
Okay, let's open this one up to some civil debated…
Tyler Hamilton is senior energy reporter and columnist for
the Toronto Star, Canada's largest daily newspaper. In addition to
this Clean Break blog, Tyler writes a weekly column of the same
name that discusses trends, happenings and innovators in the
cleantech market. This blog is a personal project started in April
2005. It is not an official blog of the newspaper.