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Queen’s Park has downsized its supersized Samsung renewable energy deal. Once hailed as the miracle cure for Ontario’s ailing industrial sector, it has been cut down to size — by a hefty $2 billion.
Is green energy fading to black? The outlook has certainly dimmed since Dalton McGuinty placed a big bet on a high-cost, high-risk, hybrid strategy that blended energy diversification with industrial incubation in 2010. Our then-premier promised to revive Ontario’s hollowed-out heartland with high-tech wind turbines and solar panels that captured the wind and the sun’s rays — riding the wave of green energy.
Three years later, McGuinty is gone. So too is George Smitherman, the ambitious energy minister who steered the strategy through a skeptical cabinet — and then bailed out. Now, Kathleen Wynne’s government wants to “bend the cost curve.” And cut its losses with damage control. The world has changed since 2010.
Industrial demand for power is down, while electricity prices have soared — stoking ratepayer resistance to expensive energy experiments. Low-cost competition from Chinese solar panels is also undercutting the green energy industry here and abroad.
Yet some things remain the same: There was always a mismatch between Ontario’s wind (which blows mostly at night and in winter) and peak electricity demand (daytime and summertime). When the wind blows at the wrong time — off-peak — it’s not replacing high-carbon coal or high-cost natural gas, but displacing low-cost hydro and low-carbon nuclear power.
Another constant is the chasm between commercial ambitions and community apprehensions over wind turbines. Also, the ongoing gap between scarce transmission capacity and new electricity generation has gummed up the system.
Against that backdrop, the opposition is portraying the Samsung dial-down as a climb-down — the end of the road for renewables. But the real green energy story has infinite shades of grey.
While the signature Samsung project has been scaled back from a promised $7-billion investment, it’s still a very big $5-billion deal: The province will buy $3.7 billion less in electricity (down from $9.7 billion) but is still taking a substantial $6 billion. Samsung is still promising 900 jobs in its four Southern Ontario plants through 2016.
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