Samsung deal sparks green envy

Energy and Infrastructure Minister George Smitherman has asked the province's power authority to "hold in reserve" enough transmission capacity in southwestern Ontario to support "renewable energy generating facilities whose proponents have signed a province-wide framework agreement with the province," according to a directive Smitherman issued to the Ontario Power Authority September 30.

It spells out that 240 megawatts of transmission capacity in Haldimand County and 260 megawatts in Essex County and the Municipality of Chatham-Kent be set aside.

It also requests the authority to accommodate 100 megawatts of solar projects on coveted Class 3 agricultural lands in the west region of the province.

The Star first reported on September 26 that the McGuinty government was in advanced discussions with Samsung toward signing a "historic framework agreement" that would see Samsung as both a major developer of renewable-energy projects and a manufacturer of the products needed to support them.

Smitherman said at the time that Samsung was poised to invest several billions of dollars in Ontario and create hundreds of jobs, many of them in manufacturing. The directive indicates that the province and Samsung have reached a deal.

The agreement with Samsung may be good news for a province eager to create more jobs, but the special treatment given to the South Korean company is ruffling a few feathers among smaller energy developers also looking to participate in Ontario's green-energy program.

"The rules need to be fair for everybody, and there should not be special side deals," said one wind developer, who asked not to be named. "The ministry has a very big battle ahead of them."

The controversy centres largely on transmission infrastructure, and how much new electricity generation it can accommodate in a given region of Ontario. Capacity of transmission lines is limited, and developers wanting to make a connection must wait in line to get access.

By moving Samsung to the front of the line, some developers fear their projects might not make the cut.

The province also capped the amount of solar power that can be developed on Class 3 land at 500 megawatts, meaning Samsung has 20 per cent of that land already locked up. Developers like Class 3 lands because they're flatter and easier to build on.

Rob Miller, vice-president of development at solar operator Axio Power Canada Inc., said it's just the latest surprise for developers hoping to take part in the province's new feed-in tariff (FIT) program, which pays a premium to generators of green power.

"To be fair, the power authority always did maintain they would negotiate bilateral agreements with anybody if they got the right deal," said Miller. "But the ink isn't even dry on the feed-in tariff program, and we're already seeing another process unfold. It just creates more uncertainty."

Amy Tang, a spokeswoman for the minister, said it's too early to start worrying about transmission capacity and investment opportunities being maxed out.

"The FIT is about generating renewable energy investment and attracting green jobs and, along with it, there is an effort to boost capacity in the energy system, including a massive transmission (infrastructure) build-out which the province has directed Hydro One to undertake," said Tang.