Ontario's Minister of Energy Brad Duguid announced amendments to the province's
renewable energy deal with Samsung C&T Corporation and the
Korea Electric Power Corporation (the "Consortium") (see
related post for background on the deal).
The amendments, which are described below, are designed to
accelerate the manufacturing job creation benefits of the deal
while substantially reducing the additional payments to which the
Consortium is entitled, all in exchange for extending the deadline
by which the Consortium must build its wind and power projects. The
amendments are likely also intended to help mitigate negative
public sentiment about the arrangement, which has been described by
some (including Tim Hudak) as a secret "sweetheart"
The amendments are as follows:
1) The Consortium's deadline for building wind and
solar farms has been extended by a year
The consortium committed to build 2,500 MW of renewable
generating facilities in Ontario: 2,000 MW of wind farms and 500 MW
of solar. As with all Feed-in Tariff contracts, the
government's agreement with the Consortium stipulated deadlines
for building these projects (although those deadlines were not
disclosed). The amendments will see all such deadlines pushed out
by one year. This is consistent with the offer the OPA has made to
all FIT contract holders to extend their Milestone Dates for
Commercial Operaion by one year.
2) The Consortium's deadline for opening new
manufacturing facilities has been accelerated by a
Under the original agreement, the Consortium agreed to build 4
new manufacturing facilities in the province, one for each of the
following types of component: wind turbine towers (to be in full
operation by March 31, 2013); solar inverters (March 31, 2013);
solar module assembly (December 31, 2013); and wind turbine blades
(December 31, 2015). These operational dates all appear to have
been moved up by one year, meaning the first will open in March of
3) The economic development payments to the Consortium
will be reduced by 75%
Under the original deal, if the Consortium meets the deadlines
for commencing commercial operation of projects and opening the
four manufacturing facilities , its wind and power projects will
become eligible for an undisclosed "economic development
adder", which is a premium on the already premium
per-kilowatt-hour FIT prices. The total cost of the economic
development adder over the 20-year lives of the wind and solar
farms was projected to be $437 million (net present value).
Today's amendments reduce the total cost of the economic
development adders to a maximum of $110 million (which may be
further reduced if the Consortium misses the revised
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The Government of Alberta recently announced a number of policy changes that will impact the Alberta Electricity Market, composed of its generators, transmitters, distributors, retailers, electricity consumers and wholesale electricity market.
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