Ontario signs $7 billion deal with Samsung for wind and solar power generation
Thursday, January 21, 2010 at 12:43PM The Ontario government has signed a deal worth $7 billion with a consortium led by Korea's Samsung Group and Korea Electric Power Corp. to develop 2,500 megawatts of wind and solar energy. The project will triple Ontario's wind and solar generating capacity and provide enough power for 580,000 homes. Construction is to begin in 2012 on the first 500 megawatts and will take three years to complete. Ontario Premier Dalton McGuinty says the project will be the world's largest.
The premier says the project will create 16,000 jobs in the province over five years, including 1,440 manufacturing jobs at four new manufacturing plants. An additional 700 manufacturing jobs are anticipated to supply components not manufactured by the consortium. The consortium is also committed to using Ontario-made steel in the construction of the projects.
Samsung will build wind turbines that will generate 2,000 megawatts and solar power facilities to generate 500 megawatts, to replace the energy produced by coal-fired power plants that are being phased out. The agreement includes a promise to buy electricity produced by the projects.
The first solar-wind project is slated to be built in Chatham-Kent and Haldimand County in southern Ontario.
Critics of the deal, such as Ontario's Electricity Coalition, have been quick to attack the government and call for a probe to determine whether Ontarians are really getting a good deal. Ontario's electrical utilities operators "could buy, install and maintain made-in-Ontario windmills more cheaply without Samsung in the picture," according to the OEC.
They charge that the deal will lead to higher prices for power as Samsung is paid "outrageous" rates. Samsung will be paid 13.5 cents per kilowatt hour for wind power and 44.3 cents for solar power. The consortium will also be eligible for an economic development adder (EDA) if four plants manufacturing wind turbine towers, wind blades, solar inverters and solar assembly are operating in Ontario by 2015. According to the government's figures, this EDA will add on average $1.60 to a residential bill over the lifetime of the generation contracts.
The premier maintains that the project is good for Ontario both economically and environmentally. When complete, the wind and solar power generated will displace an estimated 40 tonnes of CO2 emissions, the equivalent of removing every car from Ontario roads for one year.
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