Ontario election holds RE impact

With a little more than three weeks to go until Canada’s most populous province holds a general election, the future of energy – and specifically renewables – has emerged as a major campaign issue.

In his second attempt to seize power from the governing Liberal Party, Tim Hudak, leader of the Progressive Conservatives (Tories), has promised a thorough re-evaluation of several hundred outstanding contracts issued under Ontario’s Green Energy Act of 2009, with many wind and some solar projects in danger of being kicked to the curb.

Over the past few days, the Liberals and Tories have traded barbs over Hudak’s intentions for wind and solar. The general election will be held on 12 June.

The Liberals – led by Ontario’s current premier, Kathleen Wynne – argue that that by “tearing up” existing contracts, the Tories would expose the province to billions of dollars’ worth of legal liabilities. Much cheaper, they argue, to simply build out the allocated wind and solar capacity, while benefiting from the jobs that would come from doing so.

Hudak counters that the government has the legal right to pull the plug on projects that have not yet entered construction, saying that many projects were foisted upon rural communities that do not want them built.

“We need to end these expensive subsidies for the wind and solar projects that are driving our rates higher and higher still,” Hudak said recently.

Industry advocates argue that pulling the rug out from underneath projects already awarded feed-in tariff contracts – even through legal means – would have a devastating impact on the investment climate for renewables in Canada.

A number of major renewables projects are underway in Ontario, such as Samsung’s 270MW K2 wind project, for which Siemens recently nailed down a 140-turbine order – and many others are in the planning stages.

Canada installed 1.6GW of wind capacity last year – more than the US for the first time – and it is expected to install another 2GW in 2014.

The Liberals acknowledge that mistakes were made in the implementation of the Green Energy Act, which they championed. Among other obvious failures, the law has not created as many jobs as were predicted.

Last year Ontario took an axe to its blockbuster 2010 renewables deal with Korea’s Samsung, seizing on slippages in Samsung’s construction schedule to renegotiate the entire package, lowering the end goal to 1.4GW of wind and solar capacity from the original 2.5GW.

Doing so has allowed the Liberals to claim they are getting a grip on the province’s fast-rising electricity prices, which some observers see as a major threat to Ontario’s manufacturing sector.

Much of Ontario's rising cost of electricity is attributable to the major investments the province has made in its energy system over the past decade, including long overdue upgrades to its grids network.

“There’s a cost associated with [upgrading the grids], and so we are working to make sure that there are programs and supports in place for people who are struggling to pay for their electricity,” says Wynne.

“But are we going to back away from clean, renewable energy? No, we’re not going to do that.

The Hudak-led Tories lost Ontario’s last general election, in 2011, with Hudak having promised to do away with the Green Energy Act altogether. However, the Tories gained a significant number of seats in 2011.

The Liberals hold a modest lead over the Progressive Conservatives in most polls, but political experts believe the race may be closer than it appears, as the Tories are more popular with older voters – who tend to turn out in higher numbers on election day.