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…

They’re calling it the largest integrated solar-wind deal of its kind in the world. Whether or not it’s true, there’s no question that this one ranks high.

South Korean industrial giant Samsung Group signed a deal today with the Ontario government that will see 2,500 megawatts of solar and wind developments and construction of four manufacturing plants between 2013 and 2015. This $7 billion investment from Samsung is expected to create 16,000 jobs — a combination of permanent manufacturing jobs and temporary construction and development jobs. I first broke this story back in late September, but the deal is now official.

The first two plants — one to manufacture wind towers and one to manufacture solar inverters — must be in full operation by March 31, 2013. A solar module assembly facility must be in place by Dec. 31, 2013. Finally, a wind blade manufacturing plant must be in place by Dec. 31, 2015. Samsung, apparently, has long-term plans in the Ontario market, from which it hopes to export its products to the booming U.S. renewable-energy market. As for development projects, Samsung will get the same feed-in-tariff rate as any other company. But to the dismay of those other companies, the Korean consortium that Samsung is part of will get a $437 million economic “adder” — i.e. an incentive to make sure those manufacturing jobs do get created — and will have scarce transmission capacity set aside so the company doesn’t have to wait long in the grid-connection queue.

In addition to Samsung C&T, the consortium includes Korea Electric Power Corporation. Partners with the consortium include Satcon, Pattern Energy Group, and Dongkuk Steel.

See Toronto Star story here for initial details and comment about today’s announcement. See government announcement here and backgrounder here. Certainly more info to come…

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. (more…)

Ontario, so it seems, is leading the charge for offshore wind development in North America. Never mind that we’re not a coastal jurisdiction. This isn’t about the ocean, this is about the lakes. On Monday, Canada’s largest independent wind developer, Canadian Hydro Developers, announced that it was purchasing the rights to an “Offshore Wind Prospect” that has the potential to be a massive 4,400 megawatt, multi-phase wind project. That would  make it the largest offshore wind project in the world. Located along an 80-kilometre stretch in the middle of Lake Erie (on the Ontario side), the first phase of the planned developed — between 400 and 500 megawatts in size — is expected to be operational by the end of 2014.

Canadian Hydro purchased the rights from Wasatch Wind Inc. of Utah, and said it decided to get into offshore wind because of the feed-in tariff program in Ontario that pays 19 cents for every kilowatt-hour of power that comes from an offshore turbine. Kent Brown, CEO of Canadian Hydro — which is the subject of a hostile takeover bid from Calgary-based utility TransAlta Corp. — said his company’s offshore plans, on their own, should be enough to convince a foreign manufacturer to set up shop in Ontario. While it’s unlikely Canadian Hydro will be able to develop the full 4,400 megawatts, its entry into the field certainly brings momentum to the Great Lakes offshore wind energy rush.

Toronto-based developer Trillium Power is leading the pack. Its first project would be a 710 MW offshore wind farm in Lake Ontario, called the Trillium Power Wind 1, followed by three more projects that add nearly 2,900 MW to its pipeline. Trillium Power Wind 1 is likely to be the first major offshore wind project in the Great Lakes, and possibly North America. In fact, New Energy Finance says there’s nearer-term potential for development in the Great Lakes than on the coasts, and that Ontario is clearly shaping up to be a leader in offshore wind.

Just a few days ago, I reported that the Ontario government is in serious talks with Samsung C&T about bringing wind and solar manufacturing to Ontario. Samsung is also on record saying it’s interested in entering the offshore market, so perhaps there’s an opportunity there. And who knows, GE, since its purchase of offshore turbine maker ScanWind, may be tempted to chase this market as well. The Great Lakes are an interesting place to develop. It’s shallower, less turbulent, and there’s no salt water to play havoc with turbine machinery. All of this reduces wear and tear on gear, and allows for quicker construction because, unlike ocean-based projects, you don’t have to contend with often violent weather that causes costly delays. Now, one potential problem is ice flow, and that’s something developers will have to deal with. But certainly the opportunity is there for developers of offshore wind in the Great Lakes to put up projects at lower cost than the big ocean-based projects we’re seeing in Europe. They now have to prove it.