What impact will the Samsung agreement have on other renewable
As you probably know, the province of Ontario has signed a $7B
deal with Samsung. Although the contract and its precise details
are secret, Samsung has reportedly agreed to build 2500 MW of
renewable energy generation and to try to arrange to have renewable
energy equipment manufactured in Ontario.
The most troubling aspect of the deal (beside the price) is its
impact on the availability of transmission for other renewable
energy generators.Lack of transmission / distribution capacity is a
major ("the major"?) obstacle to renewable energy
generation in much of the province. This is why the 1022 feed in
tariff applicants are waiting with bated breath for their TAT and
DAT assessments- if there is room for them on the grid, the FIT
tariff should guarantee them a lot of money. It may be harder to
get room on the grid that it will be to obtain their renewable
The Samsung agreement will be implemented in five phases ending
March of 2013, and December of 2013, 2014, 2015, and 2016
respectively. Before the FIT application window opened, 500 MW of
transmission capacity in Haldimand, Essex and Chatham-Kent were
already reserved for what is now Samsung's Phase I,
approximately 20% of the available capacity in those areas. This
reservation does not raise a real issue of unfairness, because it
was public before the FIT process began.
Now, however, the 1022 FIT applicants, plus the 3000+ micoFITs,
have proposed well over 8000 MW of renewable energy projects,
likely far more than the existing grid can accommodate (especially
because transmission capacity in the Bruce Peninsula was almost all
promised to the Bruce Power nuclear plant). FIT rules state that
this capacity will be allocated to qualifying applicants, basically
in the order of their date-stamped applications. Grid capacity
evaluations are underway, and FIT contracts are supposed to be
offered to qualifying applicants by the end of March.
But the province has apparently also promised Samsung
"priority access" to another 2000 MW of transmission, for
Phases 2 through 5 of its contract. What does that mean for
everyone else in the queue?
Sources at the Ministry of Energy and Infrastructure insist that
the "assurance of priority access" promised to Samsung
will not interfere with the current FIT contract allocation
process, even though the FIT process could allocate all available
transmission capacity. They plan to "work with" Samsung
to identify sites where Samsung can obtain its priority access,
perhaps through construction of additional transmission lines. They
note that Hydro One has been directed to proceed $2.3 billion of
new transmission lines. Samsung projects might improve the economic
case for new lines in some areas, thus benefiting other projects
It is difficult to assess this claim without access to the
contract language. Hydro One did finally obtain environmental
assessment approval of its "Bruce to Milton Transmission
Reinforcement Project" in December, about four decades after
the line was first planned. The line will take at least two years
to build, but that is usually the easy part.
It has been exceedingly difficult to obtain approval for new
transmission lines in Ontario since the Environmental
Assessment Act came into force. See: A Long,
Sad Story: Siting Transmission Lines in Ontario(www.jstor.org/pss/825508). Since then, it has become even
more difficult to site new lines: property values are higher,
populations are denser, there are more legal routes for opposition,
and First Nations issues have powerfully resurged. The new Bruce to
Milton line was approved, but it follows an existing route.
Ontario has already had one experience of facing huge damages by
promising a private developer (Bruce Power) access to transmission
lines it had not built. As a result, renewable energy developers
were frozen out of large parts of the province. Will the Samsung
contract be different?
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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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