Ontario could see enormous economic benefits pursuing offshore wind in Great Lakes

The Conference Board of Canada came out with a report today that assesses the economic benefits to Ontario of developing offshore wind in the Great Lakes. Here’s my story in the Toronto Star. Specifically, it estimates job creation and the boost to GDP that would occur by developing 2,000 megawatts of offshore wind projects between 2013 and 2016. This, the board said, is a conservative estimate — much more could be developed over time. But even at just 2,000 megawatts, it estimated the creation of at least 55,000 person-years of employment and at least a $4.8-billion boost to the province’s GDP. This amount of offshore development would also attract more than $10 billion in private investment. Mind you, this is all based on a minimum local content requirement of 55 per cent. As of Jan. 1, 2012, Ontario will have a 50 per cent local content requirement for wind — so the assessment isn’t far off reality.

I like the idea of pursuing offshore wind, and here’s why: It’s new. It’s a chance for Ontario to be a true pioneer in North America by establishing an early foothold. With solar and onshore wind we’re playing catchup, we’re competing with Silicon Valley and the Chinese, and we”ll never truly be a centre for innovation and manufacturing. With solar we’re also vulnerable when subsidies dry up, as jobs and manufacturing are more mobile. 

With offshore wind, however, we benefit immediately by our geography. Ontario borders all but one Great Lake. Of all bordering jurisdictions Ontario has the most offshore development potential. Ontario has concrete and steel making, the skills and the infrastructure to support an embrace of offshore wind manufacturing and supporting services. A good deal of the supply chain could be established here. As the conference board report attests, the job creation potential is strong and we can leverage existing industries and also boost the more mature onshore wind market in Ontario.

Ontario already has a feed-in-tariff for offshore wind — the first on the continent — that offers 19 cents per kilowatt-hour, less than half the cost of developing multimegawatt solar projects in Ontario. It’s consistent with what Massachusetts utility National Grid has agreed to pay for offshore wind power from the Cape Wind project (18.7 cents U.S. per kilowatt-hour). This may sound expensive, but as some have said, this is an investment in a modern-day Niagara Falls. It might sound like a lot today, but it’s creating an infrastructure that decades from now will look cheap by comparison. Also, new nuclear power plants aren’t expected to be much cheaper.

Here, by the way, is a brief report on what’s going on in Europe and along the U.S. Atlantic coast, courtesy of Forbes blogger William Pentland.

I want to emphasize that this Conference Board report was sponsored by Vestas SA, which has an interest in entering the North American offshore wind market. The Conference Board, however, has a strong reputation for being independent, non-partisan and objective with its research. I guess such a report wouldn’t have been done had someone in the industry not stepped up to pay for it. I don’t think the Conference Board has anything to gain by writing a pro-offshore report; it would consider its credibility as an organization much more important. With that, I’m willing to trust that its conclusions are completely independent.

3 thoughts on “Ontario could see enormous economic benefits pursuing offshore wind in Great Lakes”

  1. There are good reasons Wolfe Island has had a TransAlta wind farm on it since 2009 and that the CORK (Canadian Sailing Championships) are held off the shores of Kingston Ontario. Kingston is currently bidding on the International Sailing Federation (ISAF) Sailing World Championships in 2014. The winds @ Kingston, Ontario reach 10-15 knots each afternoon which provide for great sailing and equally important, windpower opportunities!

  2. I can argue that essentially none of the current wind production is utilized domestically. It wouldn’t be entirely fair as wind is only one, and a minor one, of the factors that has Ontario increasingly unable to match supply to demand without dumping exports at rates well below what we pay the producers.
    The IESO business plan has noted the issues in it’s latest 2011-2013, business plan, and claims to be trying to get a better handle on the new supply challenges. One quote from the plan “the combined effect of a reduced demand for electricity and what we now know will be a significantly increased renewable energy fleet creates surplus situations with no obviously-willing dispatch partners.”
    That certainly doesn’t mean wind has no future.
    It does mean any further commitment to it would be foolish until such time as there are more than a handful of hours in the summer, and the winter, when wind production exceeds exports, or such time as the export markets recover.

    We have no use for 2000MW of wind capacity until we figure out how to utilize the first 1200MW.

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