Canada’s biggest booster of solar power doesn’t mince words when he describes the stakes for his industry in Ontario’s June 12 election.
“The proposed plans of Tim Hudak and the Conservatives would be a devastating setback for the Ontario solar sector,” said John Gorman of the Canadian Solar Industries Association, or CanSIA, in an interview.
“The industry that has been created here would disappear literally overnight.”
Some might count that a good thing.
The Liberals’ Green Energy Act unashamedly took Ontario down the path of building up a renewable energy sector.
Its critics blame renewables — wind, solar and biomass — for helping push electricity costs higher.
The Progressive Conservatives are among them, and provide a stark choice for voters on June 12. Ontario energy policy will change dramatically if they’re elected.
“Renewable energy is desirable, but the problem is that Ontario is currently flooding the power system with wind and solar when there is no demand for new power of any sort,” the PCs argue in a policy paper issued in 2012.
They name nuclear as the “key future source” of energy supply. And they pledge to scrap the centrepiece of Liberal renewable energy policy, the “feed-in tariffs” that give renewable energy projects long-term contracts at fixed rates.
During a campaign stop, Hudak said ending the feed-in tariffs, which pay generators a premium for selling wind and solar power back to the grid, would save the economy $20 billion a year in energy costs.
“We’re the only ones on your side. With affordable energy we will create 40,000 jobs, save thousands more and get Ontario working better,” Hudak said at Stanpac, a local packaging company here in his riding of Niagara West-Glanbrook.
The 2012 PC policy paper says “all existing projects that are connected to the grid will remain in place.”
But those waiting in the queue for final approval could be at risk.
That’s a considerable number, according to the Ontario Power Authority, which says about 1,100 projects, representing nearly 2,000 megawatts of generating capacity, are still awaiting their final “notice to proceed.”
Many of those are solar energy projects.
Gorman and other lobbyists for the renewable sector are making no secret of their fears.
“Since the beginning of the program until April this year, there has been $2 billion of private investment in the sector,” he said in an interview from Munich — where he’s been attending the Intersolar Europe trade show.
“The idea that a PC government would step in and cancel the contracts would shake the confidence of investors in the Ontario market globally, and that’s something we don’t want to trifle with.”
“It’s going to shake the confidence of investors — and for what?” he said.
“I don’t see how the math is adding up here in terms of cutting thousands of jobs in an emerging sector where Ontario is exceptionally well positioned. . . . It’s baffling”
“The setback that we would suffer as an industry here if the Conservatives did get elected and implemented these policies of cutting the FIT program would devastate that industry, and undermine our ability to compete in a growing market.”
The Canadian Wind Energy Association issued a bulletin at the outset of the election campaign criticizing PC policy and asking the party to reassess its position.
CWEA president Robert Hornung said in an interview that there’s “a fair bit of misinformation out there, particularly around issues related to cost.”
“The Conservatives have made it very clear that their biggest concern is to make sure the electricity system is affordable,” he said.
“We think they’ve been working with incorrect information with respect to wind and renewables.”
Legally, the ability to terminate feed-in tariff contracts is “nuanced,” according to a note issued by the law firm Gowlings.
The power authority has the right to cancel some projects awaiting notice to proceed, Gowlings notes. But starting in 2011, it waived that right for projects meeting certain domestic content guidelines.
Project developers would still be entitled to recover some costs if the projects are cancelled.
For those that already have a notice to proceed, cancelling a contract for reasons other than a default by the developer “would likely be a very costly adventure for the government,” Gowlings says.
In summary, Gowlings says that projects without notice to proceed are “most at risk” if the government changes, while operating projects, and those with notice to proceed, are “less at risk.”
Whatever the legal issues, the renewable sector is holding its breath waiting for the election.
“There’s a deep sense of concern and fear about what could happen, and I think that has already impacted the industry,” says Kristopher Stevens of the Ontario Sustainable Energy Association.
“There’s a deep concern this could undermine and destroy the industry. I would say it’s already undermining investor, developer and manufacturer confidence.”
Another issue would be the controversial renewable energy agreement the Liberals struck with Samsung and its Korean partners in 2010.
“We will also end the special deals with Samsung,” the Conservatives promise.
How that would happen isn’t clear, but the deal has been amended before.
Last year, the two sides agreed that Samsung would develop 1,369 megawatts of green energy — down from 2,500 megawatts in the original agreement.
They also agreed that the province will buy only $6 billion worth of electricity from Samsung projects over the next 20 years, down from $9.7 billion in the original agreement.