Ont. government signs $7 billion wind power deal with Samsung
The Ontario government has signed a $7 billion wind and solar power deal with a consortium led by South Kore...
January 23, 2010 by Canadian Plastics
The Ontario government has signed a $7 billion wind and solar power deal with a consortium led by South Korean industrial giant Samsung Group, in a move to fast-track the creation of North America’s first green-energy manufacturing sector.
The deal is part of Ontario Premier Dalton McGuinty’s plan to make the province – hit hard by job losses related to the troubled auto sector – a popular choice for parts suppliers, equipment designers and operators.
At the centre of the project is an investment in wind and solar electricity sufficient to be able to power more than 580,000 homes in the province, the government said in a press release.
“We’re trying to lay the foundation here for new economic growth in Ontario,” McGuinty said. “[Samsung] can do something rather extraordinary here, which is put in place almost immediately critical mass of manufacturing capacity.”
According to the government, the deal will cost every electricity customer in the province an extra $1.60 a year on their bill for 25 years.
Samsung will receive $437 million in incentive payments over the 25-year life of the deal if it fulfills its obligation to create 16,000 jobs. This will be done, in part, by having Samsung entice green energy companies to the province; this is the incentive that will add the $1.60 to consumers’ electricity bills.
The first of five phases of the plan will be built in southwestern Ontario, in Chatham-Kent and Essex, near Windsor, and Haldimand county, south of Hamilton, according to the press release.
However, the move has provoked some controversy, as local energy developers and opposition party members are suggesting that Samsung is getting a so-called “sweetheart deal”.
New Democratic MPP Peter Tabuns, for example, questioned why Mr. McGuinty is giving up control over a portion of the province’s electricity generation to a foreign government. The South Korean government owns 54 per cent of Korea Electric Power Corp., Samsung’s partner in the deal. “Ontario Power Generation, the Crown-owned electricity utility, would have been capable of taking on similar, large scale projects,” Mr. Tabuns said.