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Flak flies over Hudak’s energy pledge

Renewable energy supporters are not happy with Ontario Progressive Conservative leader Tim Hudak’s promise to scrap the Samsung energy deal and dump the province’s FIT program.


May 12, 2011
by PLANT STAFF

TORONTO: Ontario Progressive Conservative leader Tim Hudak’s promise to scrap the Samsung energy deal and dump the province’s “expensive feed-in tariff program” has predictably stirred the ire of renewable energy supporters, while manufacturers continue to be concerned about the high cost of energy over the longer term.

Ontario’s Leader of the Opposition, gearing up for an Oct. 6 election, threw down a pledge at the Ontario Power Summit in Toronto May 10 to scrap the $7 billion energy deal with the South Korean conglomerate Samsung (click here for a copy of his speech).

He decried the deal’s lack of a competitive bidding process, registered lobbyists and transparency or opportunity for Ontario companies to come to the table.

“To make matters even worse, we still don’t know the details of the deal and the government refuses to tell you or Ontario families just what they have committed us to,” he said in his prepared text.

He said the feed-in tariff (FIT) program and the higher guaranteed rates promised to energy producers over a 20-year term would also be scrapped.

Current prices for electricity range from 5.9 cents per kilowatt-hour to 10.7 cents at peak times.

FIT prices range from 13.5 cents for wind power to as high as 44.3 to 80.2 cents for solar power.

“From smart meters, to the Green Energy Act, to the sweetheart Samsung subsidy, electricity, bills continue to climb. Dalton McGuinty’s own Long-Term Energy Plan estimates hydro bills will rise another 46% within the next four years – and I suspect he’s low-balling that figure. Bills are simply unaffordable for many families,” said Hudak.

While not directly addressing Hudak’s energy promises, Ian Howcroft, vice-president of Canadian Manufacturers & Exporters (Ontario) noted the association has, for many years, had major concerns about the province’s energy policies and prices.

“We support renewable energy in Ontario but not at all costs,” he said, noting how higher-priced wind power will have precedence over cheaper electricity.

According to the Liberal government’s deal with wind producers, wind energy gets priority, even when it’s not needed, so more cheaply produced surplus electricity will end up being exported to the US or Quebec, ultimately subsidized by Ontario consumers.

“We must be mindful of the overall costs to the province,” said Howcroft. “We can’t be paying increased rates to artificially support green energy if the market isn’t there.”

The Canadian Wind Energy Association (CanWEA) was quick to react to Hudak’s remarks. Robert Hornung, president of the Ottawa-based association representing the wind energy industry, noted utilities around the world are investing in wind energy “because it has already demonstrated it is cost competitive with a number of technologies and will become even more cost-competitive in the future.”

He said over the long term, the cost of wind energy is projected to continue to decline while the costs of other technologies are projected to grow in response to increased fuel costs or environmental regulations like carbon pricing.

“The recent price hikes we have seen in Ontario have nothing to do with the prices being paid for new wind energy generation under the Green Energy Act, as only a very small number of projects are operating at this time,” he added. “Transparency, competition and future lower prices are principles our industry can work with, but let’s ensure we’re all starting with the same facts.”

Joe Etcheverry, president of the Canadian Renewable Energy Alliance (CanREA), said it was irresponsible of Hudak to turn Ontario’s renewable energy program, which he described as “best on the continent” into a political scrap.

“The issue is what’s good for Canadians, Ontarians and the climate,” he said, warning that the skyrocketing fossil fuel prices we are seeing today will be the norm in the future.

Referring to Hudak’s promise to scrap the Samsung deal, he said “if he hasn’t read the details, he shouldn’t be trying to score political points.”

He noted the green energy plan is an opportunity for industry to be innovative and put the province back to work by creating jobs. He also pointed out that Angela Merkel, Chancellor of Germany, is rethinking nuclear power and supporting an ambitious implementation of renewable energy, “and she’s the most conservative politician in Europe.”

Premier Dalton McGuinty warns Hudak’s move would put thousands of much-needed jobs at risk.

While he quickly condemned Hudak for promising to kill the deal without knowing the details, Energy Minister Brad Duguid couldn’t come up with the cost of scrapping it, or even say whether it includes a penalty fee.

The agreement calls on Samsung to build four new manufacturing plants in Ontario for solar and wind farms as well as green energy projects, with specific targets of 400 megawatts of new wind power and 100 new megawatts of solar power for each of the five phases of the deal.

Samsung is expected to create about 16,000 thousand jobs in Ontario and help the province create a hub of green energy companies and expertise that can export its products around the world.

Most of the jobs will be temporary, but 1,440 permanent manufacturing and related jobs are to be created.

In return, Ontario guarantees Samsung space on the province’s limited transmission grid, plus premium rates for the electricity it generates.
With files from Canadian Press