Ontario’s green energy strategy: Billions wasted, jobs lost

1297837057519_ORIGINAL-1By Nora Loreto

On December 2, 2010, the Ontario government promised that a new wind turbine plant in Tillsonburg would deliver 900 jobs to the southwestern Ontario region. The government release said that the plant was part of a $7-billion investment made by Samsung to invest in clean energy. Siemens would build the plant.

Half a year later, and right before the 2011 election, then premier Dalton McGuinty toured the plant. In a release announcing his visit, the government said, “The Tillsonburg plant is one of four under Ontario’s revised, enhanced agreement with Samsung that will provide 16,000 clean energy jobs across Ontario.”

Part of the Samsung deal was that Siemens would supply 140 wind turbines for $850 million. That contract was signed in 2014.

Six years later, Siemens has announced that the plant is closing, and 340 workers are out of a job. More than 200 of those workers immediately received a termination notice. The remaining workers will be phased out between now and 2018.

The region already faces a combined loss of 1,000 jobs at the CAMI autoparts plant in Ingersoll and Maple Leaf Foods in Thamesford.

This is just another thread in a twisting saga of Liberal mismanagement and so-called clean energy promises.

Last September, Energy Minister Glenn Thibeault announced that the government would cancel several long-term energy contracts signed in 2013, to try and reduce cost to individual energy bills. This would save up to $3.8 billion, he argued.

The 20-year to 40-year contracts were intended to sweeten the deal for private companies who would participate in boosting Ontario’s new green energy capacity. Rather than publicly build these facilities, private companies were promised stable profits, but would be expected to assume extra costs. The Globe and Mail explained it like this: “The private sector would be responsible for cost overruns and other construction problems in exchange for 20-year contracts from the province. The contracts essentially guaranteed that the companies would receive a certain amount of revenue — no matter how much electricity their plants produced (though they would be paid more if the province used their electricity).”

The Samsung consortium deal, called “lucrative” in the same Globe and Mail article by the reporters, was sole-sourced. These 20-year contracts, handed out under the Ontario Green Energy Act, ended up pushing the extra costs onto customers. By 2014, Ontario’s capacity to generate electricity was much higher than average usage. As demand fell, in part due to reductions within the manufacturing industry and household conservation mechanisms, Ontario was still paying for this over-supply, thanks to these 20-year contracts.

Part of the Green Energy Act removed most projects built under the act from being subject to processes defined by the Planning Act and, ironically, the Environmental Assessment Act.

By 2016, almost 60 per cent of Ontario’s energy came from nuclear. Wind power made up 5.1 per cent.

Samsung and Siemens announced the partnership in 2010, and named Siemens as the company to make the wind turbines. The announcement of this partnership boasted that Ontario’s feed-in tariff program pays “the highest rates for green energy producers in North America.” Indeed, for some of the contracts, promised rates were as high as 40 times more what one would pay for fair-market value.

Siemans and Samsung have seemingly benefitted handsomely from these contracts, even though the promise of more renewable energy in wind, more jobs and fewer costs have all turned out to be lies.

In 2012, Brad Duguid congratulated Siemans for having existed in Ontario for 100 years: “Siemens is taking advantage of Ontario’s modernized business climate to grow. Growth of anchor companies, such as Siemens, creates new opportunities for us to work together, and more importantly, new jobs for Ontarians.”

Siemens employs 4,800 people in Canada and made $3.0 billion in sales in 2015. In 2016, Mediacorp named it one of Canada’s top 100 employers.

Perhaps unsurprisingly, Samsung Renewable Energy has been a donor to all three political parties, particularly during 2014, the year of the last Ontario election.

Between 2014 and 2016, Samsung Renewable Energy Inc. donated almost $86,000 to the Liberals, the NDP and the Conservatives combined. They donated almost $17,000 to the NDP, $11,000 to the Progressive Conservatives and almost $58,000 to the Liberals, the party that gave them the sole-sourced contract in the first place.

This disaster has provided cover for the Ontario Liberals to justify privatizing Ontario hydro.

On August 9, 2016, Samsung Renewable Energy’s one-third stake in the wind power plant also in south-western Ontario, in Goderich was acquired by Axium Infrastructure, Alberta Teachers’ Retirement Fund Board and Manulife Financial Corporation.

This piece was first published on Rabble.ca.

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