Tag Archives: Samsung

Never a dull week in Ontario energy politics

This week brought more evidence that electricity issues will dominate the upcoming provincial election. The Ontario NDP vowed yesterday that, if elected, it will kill plans to build a new nuclear plant at Darlington and potentially pull the plug — or in its words, “hit the pause button” — on plans to refurbish the province’s existing fleet of reactors. Party leader Andrea Horwath said money earmarked for new nuclear would instead go toward funding household retrofits that would, by lowering energy use, partially eliminate the need for the new power.

Now, there’s no doubt the province could do A LOT more to promote conservation, and the Liberals deserve a wooden spoon to the back of the head for not pushing and supporting it more and, apparently, having no significant plans to do so. I also think we can avoid the need for new nuclear in this province. Regarding the existing fleet, we have to be very careful. Nuclear currently supplies about half of the electricity in this province. If we’re going to reduce our dependence on it, it will be a weaning process that will depend on the health of other generation assets and their ability to supply the grid reliably. There may be some wiggle room, but at a time when we’re phasing out coal we’re going to need most of those nuclear assets whether we like them or not. Refurbishments will be necessary, but should certainly be scrutinized — not assumed — keeping in mind we can’t afford to put unnecessary strain on the system. We need to stay focused on getting rid of coal, and doing it right.

In other news, the Liberals have been making some clever and necessary moves to defend its green energy and green economy plan, and by association the jobs and industry it has created, should they lose an election to the PC Party in October. On Tuesday, it was revealed that Energy Minister Brad Duguid had issued a ministerial directive that alters the rules of the feed-in-tariff program, eliminating the Ontario Power Authority’s right to cancel a FIT contract if a developer does not yet have a Notice to Proceed to construction.

To obtain a Notice to Proceed, developers must have all permits and approvals, including all project impact assessments, a renewable energy approval from the Ministry of Environment, a plan that verifies that all domestic content requirements have been met, and a financing plan that demonstrates the developer has the money in place to build the project as envisioned. The PCs, if they were to form the government, have indicated they would exercise their rights under Sections 2.4 (a), (e) and (f) of FIT contracts to terminate contracts in cases where developers had not yet obtained a Notice to Proceed. Now, there would be a penalty to this — the government would have to cover any pre-construction development costs. But Hudak and crew have said they’re willing to take that hit.

This would create a huge problem for the FIT program, because more than 1,800 FIT contracts would be at risk of being cancelled and at no fault to the developers. Many, including Samsung, have a contract in hand but are waiting for grid capacity or to receive their renewable energy approval from the environment ministry. To protect this group, the Liberals tweaked the rules. Now, those developer can request a waiver that takes away the power authority’s right to terminate a project, as long as that developer can show a domestic content plan supported by a manufacturing equipment agreement. Developers must still submit a financing plan and receive all permits and approvals before they can begin construction, but the absence of these are no longer an opening for contract termination.

The end result is that it salvages whatever confidence is left in the industry since Hudak announced his intention to scrap the FIT program. Renewable energy developers and manufacturers in the province are still worried, but less so now. The Liberals also announced improvements to the renewable energy approvals (REA) process that will see applications dealt with more quickly, so that should bring some more certainty as well.

Samsung is among those less worried. In fact, it was announced yesterday that the government has given Samsung a one-year extension to fulfill certain contractual obligations. But Samsung had to give a little to get a little. In exchange for the extension, Samsung agreed to accept a lower economic adder, which is the amount it expects to received on top of normal feed-in-tariff rates for bringing jobs and manufacturing to the province. Specifically, Samsung’s adder over the 20-year life of its contract has been reduced to $110 million from $437 million. This is good for ratepayers, relatively speaking, but in my opinion the FIT rates alone should be enough to make Samsung happy — so the Korean giant is walking away with this new contractual arrangement quite satisfied. But a deal is a deal, right?

The good news in all of this is that the Liberals are starting to put up a fight, and that will increase confidence in the sector and send a message to the public that green energy in Ontario is something worth fighting for. It has been a long time coming, though decisions like killing offshore wind projects have already hurt confidence in the sector. The Liberals will have a very difficult time regaining what it lost.

The gloves are off: anti-green Hudak says he will kill Ontario feed-in-tariff program and Samsung deal

Ontario Progressive Conservative leader Tim Hudak has been great so far at telling Ontarians what he won’t do, or what he plans to kill. As far as what he will do, he’s pretty much a blank slate aimed at fueling taxpayer anger with misleading commentary. Sound familiar?

His latest press release makes clear that he plans to kill Ontario’s feed-in-tariff program and, associated with that, the Ontario government’s deal with Samsung to bring green jobs and green manufacturing to the province. “An Ontario PC government will integrate renewable energy into Ontario’s energy supply mix by ensuring the process is competitive and transparent and, above all, affordable to Ontario families,” Hudak says.

For one, Hudak is delusional if he thinks he can “bring relief” to hydro bills and at the same time assure a “competitive” and “transparent” market, as well as a reliable electricity system.  Bringing relief entails hidden subsidies that keep Ontarians believing they can continue to get cheap electricity while overhauling and cleaning up an electricity system that has suffered years of neglect during the 1980s and 1990s. Such subsidies will come from the tax base, so he’s going to steal from Paul to pay Peter. Great strategy.

Meanwhile, is he going to stop upgrading the power and transmission system and let it deteriorate? He once talked about aggressively building nuclear plants, at least until the disaster at Fukushima. Suddenly, Hudak doesn’t talk about nuclear as much, let alone the cost of building it (which according to a California Energy Commission report (see page 20, Table 5) is much  more expensive than relying on wind and other renewables). And even with an all-out nuclear strategy, that just won’t cut it. Deciding tomorow to build new nuclear plants means we still wouldn’t see that power until 2020. What do we do until then? Burn more coal? Burn more natural gas? Well, Hudak has also criticized the current buildout of natural gas plants, so I guess Hudak’s only answer is to kill the coal phaseout strategy and spend billions of dollars cleaning up half-century-old plants that, even with upgrades, will continue to spew CO2 (since scrubbers don’t capture CO2 and carbon capture and sequestration isn’t an option in Ontario).

The fact is Hudak doesn’t have a plan, has no concern for climate issues, and has abandoned many of the principles of the PC party to fuel anger and score votes. The little snippets he’s released indicate that his “alternative” approach will also come with a heavy pricetag and may be impossible, given the timelines he is constrainted by.

What Hudak talks about is likely to cost more, not less. He wants to scrap a smart meter program that’s already paid for. He wants to subject the government to potentially billions of dollars worth of lawsuits by breaking FIT contracts, at the same time making Ontario an even less attractive jurisdiction in which to do business, as investor confidence would be all but destroyed. He wants to take away green jobs and green manufacturing that is just beginning to gain momentum in the province. He wants to continue to use tax money to subsidize electricity rates. He wants to aggressively build nuclear, despite the risks, long-term buildout and rising costs.

Now, what would be a reasonable approach that still accommodates voter concerns? Continue nuclear refurbishment projects, which would keep the nuclear industry busy and folks working, but scrap plans for any new builds. Keep but rework the FIT program by limiting the size of projects, adjusting FIT rates lower (as originally envisioned under the program) and requiring that big projects (say, 10 megawatts or higher for wind, 1 megawatt or higher for solar) bid under a competitive process. Also, we should provide guidance to the market by setting a target for how much large wind, solar and other renewables we want on the system by a given date. Beef up the commitment to electricity conservation. And finally, follow through on programs that provide assistance to folks on low or fixed incomes, so they can better cope with what is a global transition to higher energy prices. The Liberals have failed miserably on this front and they’re suffering for it as a result.

Hudak is doing nobody any favours by misleading voters. Sure, some of his criticisms of the existing Liberal plan are fair and changes are necessary. But from what I’ve heard, Hudak’s alternative approach is no better from a cost perspective and certainly much dirtier.

Interesting article on challenges of Ontario FIT program

Earth2Tech has a fair and balanced report that examines some of the challenges and growing pains associated with Ontario’s feed-in-tariff program, with particular reference to the high prices being paid out for solar. Read article here. The article is based on comments made by Patricia Lightburn, an analyst with the Ontario Power Authority. She talks about some of the concerns I have with the program — that  it can’t react fast enough to changes in the market (i.e. solar-module price drops over the past two years) and it didn’t set caps on solar that trigger price reviews. The two-year price review schedule just doesn’t cut it, and while hindsight is 20/20 it probably would have been prudent to have bi-annual price reviews or have reviews triggered when project applications reach a specific cap, which is lifted when new prices are set.

I certainly hope these issues are discussed at the upcoming Canadian Solar Industries Association annual conference in Toronto next week. I also hope that in addition to the celebration of how quickly the Ontario solar market is growing, they also thank Ontario consumers who are making it all possible and offer insight into how long they’ll be asked to prop up an industry that, while bringing jobs and clean energy to the province, must eventually demonstrate it can stand on its own. I’m also guessing we’ll get a believable (i.e. not exaggerated) update on how many jobs in the solar industry have been created so far, and are expected to be created, in the coming years. Next year, by all measures, will be a very important year for the FIT program as we’ll start to see more concrete evidence of this job creation. It will also be an opportunity to make changes to the FIT program that strike the right balance between green energy development, job creation and cost to ratepayers.

On the topic of green energy, Siemens announced it will establish a wind-blade manufacturing facility in Tillsonburg, creating 300 direct jobs. The plant is being built as part of its agreement to supply 600 megawatts of wind turbines to Samsung C&T and its development partner, Pattern Energy. I’m more bullish about manufacturing announcements on the wind side of the equation, partly because there tends to be more permanence  to the wind-turbine supply chain and we can leverage this supply chain and associated infrastructure as we explore the offshore wind market, which is where I think Ontario could establish an early foothold — unlike in solar — and sustained leadership in the North American market.

Siemens, Canadian Solar to bring 800 green jobs to Ontario

Canadian Solar announced today that it plans to establish the country’s first solar module manufacturing facility in Guelph, Ontario, just an hour or so northwest of Toronto. The new facility will be capable of making 200 megawatts of solar modules a year and will create 500 new jobs for the region. The announcement wasn’t a surprise. Canadian Solar told me shortly after Ontario’s feed-in-tariff program was launched that it planned to establish manufacturing here to comply with the province’s local content rules. But the commitment, now official, brings good news to a government trying to justify the high prices ratepayers will end up paying for solar, wind and other clean energy sources under the feed-in-tariff program.

There was more positive job news the day before, when Germany’s Siemens AG announced plans to build a wind-turbine blade factory in southern Ontario — the first in the province — as part of a deal to supply 600 megawatts worth of wind turbines to Samsung C&T, which under a deal with the province of Ontario has agreed to develop 2,500 megawatts of wind and solar projects (2,000 MW of it wind) by 2016. “The implementation of this agreement will create up to 300 ‘green collar’ jobs and up to an additional 600 construction and indirect service jobs over its term,” according to a press release announcing the deal. Like the Canadian Solar announcement, we knew it was coming (even though we didn’t know Siemens would be involved) but it’s nice to finally see some specifics related to job numbers and the kind of manufacturing that will take place.

Here’s the government’s press release, which — no surprise — touts both the Canadian Solar and Siemens announcements and claims that FIT contracts issued to date mean thousands of new jobs. “The 694 clean energy contracts already announced are expected to create approximately 20,000 direct and indirect green economy jobs over five years and about $9 billion in private sector investment,” it reads. Of course, once your start throwing in “indirect” jobs you can pretty much make up whatever numbers you want. Still, there’s a buzz in Ontario and despite some fumbles — such as the lowering of the price for small ground-mount solar systems, which has created a political shitstorm — we are seeing substantial investments (or commitments to invest) in the province. We’ll have a better sense of the true numbers after the first quarter of 2011, when many of these new facilities are expected to be operational and when stricter local content rules for solar go into effect — that is, when local content requirements for solar projects less than 10 kilowatts in size jumps from 40 to 60 per cent, and for larger solar projects from 50 to 60 per cent.

Last week, Austrian electronics company Fronius International announced it was establishing a solar inverter manufacturing site in Mississauga (just west of Toronto) that would produce 50 megawatts of inverters annually and, once operational by the end of the first quarter 2011, will employ about 100 people. “Ontario is one of the most important markets of the future for Fronius,” said Romuald Goure, managing director of Fronius Canada. Continue reading Siemens, Canadian Solar to bring 800 green jobs to Ontario

Vaporizing biomass with sunlight — cool, eh?

Check out this story of mine in MIT Technology Review about Sundrop Fuels, a Colorado startup that’s trying to commercialize a process that uses the sun to gasify biomass, instead of burning a portion of the biomass itself to drive the gasification process. The technology is based on research carried out at the University of Colorado, Boulder, with help from NREL. The company believes the syngas from its process can be produced affordably in high enough quanity and quality that it could be refined into gasoline for less than $2 a gallon. One obvious hitch is the fact that the best place to harness and concentrate solar heat is in the U.S. Southwest — not exactly the place you’d go to look for surplus biomass resources. BTW: Sundrop is operating largely in stealth mode, and counts Kleiner Perkins Caufield & Byers as one of its venture backers.

On the topic of solar, Ontario’s feed-in-tariff program is gaining momentum. On Wednesday the province’s power authority announced the latest batch of projects to be approved under the program — these ones in the 10 kw to 500 kw range. A few surprises: Loblaw Group of Companies, the grocery giant, has applied to have 136 of its stores across Ontario rigged with solar PV systems. If all go ahead, it would amount to 21 megawatts just for this one grocery chain. Loblaw is starting with four pilot projects and will move forward from there depending on the results. Surprisingly, Northland Power Income Fund will be doing the installations. I say “surprising” because I typically associate this company with natural gas and CHP plants.

There also appears to be quite a few schools putting solar on their rooftops, most of the projects being handled by Ameresco. The other big player in this initial round is OZZ International Inc., which has been approved to move forward on several dozen projects across the province.

All this momentum continues to lure foreign manufacturers  and new business models to Ontario. Most recently SMA Solar Technology AG of Germany said it was establishing a 500-megawatt a year solar inverter production facility in the province that would serve the Canadian market. They join Korean’s Samsung, India’s Solar Semiconductor, Germany’s Bosch and potentially Denmark’s Vestas.