Industry starting to jockey around Ontario market
Since Ontario’s feed-in tariff program was launched last week, and with the first applications being accepted Oct. 1, there has been a handful of announcements that suggest the new program — despite controversy around local content rules, wind setbacks and land restrictions for solar — is beginning to achieve its intended effect.
Wind developer AIM PowerGen announced yesterday that it has been purchased by International Power PLC, which said Ontario’s Green Energy Act and feed-in tariff program represented a “good basis for long-term investment” and was a “key driver of our interest in AIM.” The value of the deal was disclosed by IPP as $189 million (Canadian). Said David Timm, vice-president of strategic affairs at AIM: “They very much believe that with the Feed in Tariff Ontario ‘is open for business’ and intend to make a big commitment in the province.”
Earlier, Canadian Hydro Developers said it had purchased the rights to develop 4,400 MW of wind offshore in Lake Erie. The Ontario government also disclosed it’s in advanced talks with Samsung C&T about bringing wind and possibly solar manufacturing to the province to support their interest in developing renewable-energy projects in the region. GE is also making moves, as are a number of local companies — Everbrite Solar, CWind and Sustainable Energy Technologies.
While the wind side shows some promise, the solar side looks more troubling. “There may be some jobs gained with manufacturing potential coming to Ontario, but they may be dissuaded from doing so if the government is restricting the development of a solar market through distorting land and domestic content requirements,” Rob Miller, vice-president of development at solar developer Axio Power Canada, lamented in a recent e-mail. “FirstSolar, EDF, SunPower, GE (solar), to name a few, I think some of these companies might be sitting on the sidelines and giving Ontario a pass for now in terms of new investment in FIT, and deploying capital elsewhere. Realistically, Ontario is still a small market, and if the government wants to attract manufacturing the typical way to do this is with tax incentives for building factories, grants, R&D credits.”
He may have a point. I dropped an e-mail today to Nanosolar co-founder and CEO Martin Roscheisen, asking whether he was still interested in the Ontario market. He replied promptly. “Yes,” he wrote, ”but one doesn’t build factories overnight and at a moment’s notice. We’ll see how the market develops and holds up and take this into consideration as we expand capacity.” It may indeed be that solar manufacturers aren’t prepared to take the chance just yet with certain restrictions on solar development, including and most importantly the development ban on Class 1, 2 and 3 (in most cases) agricultural lands.
But it’s still early days and there could be much policy tweaking to come, so stay tune.