January 21, 2010

Ontario’s $7-billion green energy deal with Samsung will create 7,800 construction jobs

VINCE VERSACE

staff writer

TORONTO

Ontario’s new $7-billion renewable power generation deal with a Korean consortium will create 7,800 construction jobs and position the province as a major green energy player, says Premier Dalton McGuinty.

“Our responsibility is to get our province ready for the green economy,” said McGuinty. “Building the green economy is not for the faint of heart and it will take bold steps.”

The agreement between Ontario and a consortium led by Samsung C&T Corporation and the Korea Electric Power Corporation will generate 2,500 megawatts (MW) of wind and solar power in Ontario.

The agreement is expected to deliver an estimated 16,000 jobs over six years during the construction, installation and operation of renewable energy projects and in direct manufacturing employment.

Indirect job creation in finance, consulting and other manufacturing, service and development industries is also anticipated.

McGuinty described Samsung as one of the world’s biggest conglomerates that can deliver the “critical mass” of four manufacturing plants and their associated capacity into the province’s renewable energy project manufacturing stream.

An estimated 1,400 manufacturing and related jobs building solar and wind technology for use in Ontario and export to North American are also projected.

Concern that the deal is a “sole-source” situation is “nonsensical,” said McGuinty.

He said that when Toyota approached him years ago to build a plant in Ontario he did not tell them the province needed to have General Motors and Honda also compete for the project.

In a global economy, there is a lot of competition and the province “is all ears” if another major renewable energy player, whether international or local, is willing to invest and add to Ontario’s renewable energy manufacturing capacity, he said.

The Korean consortium is expected to negotiate with renewable manufacturers to locate their manufacturing plants in Ontario and is eligible for an “economic development adder” (EDA).

The cost of this EDA, which is contingent on the consortium bringing manufacturing facilities to the province, is $437 million over a 25-year contract.

The EDA payment is tied to the consortium’s manufacturing partners operating four manufacturing plants by a certain time.

Wind tower and solar inverter manufacturers need to be in full operation by March 31, 2013, solar module assembly by Dec. 31, 2013 and wind blades by Dec. 31, 2015

The consortium “fully intends” to use Ontario-made steel in its renewable energy projects for items such as wind turbine towers. McGuinty thinks it makes sense that Ontario steel will be used because of its quality and easy accessibility.

“There will be good news for Ontario steelworkers,” said McGuinty. “I have every expectation that the steel will come from Ontario.”

The consortium has been given assurances of 500MW of transmission capacity in the areas of Chatham-Kent, Essex and Haldimand for the first phase of renewable energy projects.

McGuinty said the consortium and the province will work together to determine sites for the next 2,000MW of projects over four years.

He expects areas where transmission capacity can be provided, where it either exists or the province is building out its transmission system, will be used, such as Nanticoke and Windsor-Essex.

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