Last September, Toronto-based Trillium Power filed a $2.25 billion lawsuit against the Ontario government in response to its moratorium on offshore wind power development. Now, another offshore wind developer has filed a separate billion-dollar lawsuit against Ontario relating to similar circumstances.
Toronto-based SouthPoint Wind (SPW), a developer that had proposed an offshore wind project on the shores of Lake Erie, is seeking $1 billion in damages from the Ontario government and several of its agencies - including Hydro One Networks, Environment Canada and the Ontario Power Authority - stemming from the “confiscation of its property and intellectual property, the confiscation of its assets,” as well as reimbursement of its costs thrown away and compensatory damages."
The company is also seeking $100 million for the Ontario government’s “negotiating in bad faith” and an additional $100 million for what the suit describes as "punitive, aggravated and exemplary damages."
SPW would not comment for this story. The company’s website says the 30 MW northern Lake Erie project would include five 2 MW turbines at each of three Lake Erie locations.
Citing the need for further study of offshore wind development on the Canadian side of the Great Lakes, the Ontario government declared a moratorium on offshore wind power development.
In its lawsuit, SPW claims Ontario stripped it of its applicant-of-record status, which SPW obtained in July 2005 for eight tracts of submerged crown lands. An applicant-of-record status gives developers the right to explore the possibility of offshore wind energy development. For example, such a designation allows developers to legally study the lake floor or ascertain wind speeds.
Prior to 2009, wind developers operated under the Renewable Energy Standard Offer Program (RESOP), the predecessor to the province’s current feed-in-tariff program (FIT), which was introduced alongside Ontario’s Green Energy Act.
SPW maintains that applying to the FIT program required the developer to rescind prior assessments negotiated under RESOP. In September 2009, the Ontario Ministry of Natural Resources (MNR) contacted SPW, advising the developer that it would have to reapply for the FIT program in order to keep its applicant-of-record status intact.
According to Daniel Cayley, spokesperson for Ontario’s Ministry of Energy, SPW was never awarded a contract under the FIT program.
"The government intends to vigorously defend this statement of claim," he told NAW.
Per Ontario law, the government has 20 days from receipt of the April 3 lawsuit to respond.
In February 2011, the Ontario government announced a second moratorium on offshore wind development, claiming further scientific research was needed. A decision notice posted on the MNR’s Environmental Registry stated, “The MNR will be canceling all existing crown-land applications for offshore wind development that do not have a FIT contract, including those with applicant-of-record status.”
Déjà vu This is the second lawsuit brought by an offshore wind developer against the Ontario government. In September 2011, Trillium Power filed a $2.25 billion lawsuit against Ontario, also claiming the government stripped the company of its applicant-of-record status.
Trillium Power's planned offshore wind pipeline includes four projects totaling 3.5 GW on three different Great Lakes. John Kourtoff, Trillium Power's CEO, explains that although both developers were affected by the Ontario government’s actions, the cases’ similarities end there.
For instance, SWP’s project was planned for 1 km off the shore, whereas Trillium’s projects are proposed for 17 km to 28 km offshore. According to Kourtoff, the SWP project’s close proximity to the shoreline is problematic, because 93% to 95% of avian impacts happen within 1 km of the shore.
"They are as different from us as chalk and cheese," he says. "There was no differentiation made by the government. Ontario attempted to wipe the offshore slate clean."
Trillium Power’s lawsuit is still ongoing. The government never filed a defense, but it has filed a motion-to-strike claim to have the court dismiss Trillium Power’s claims. A decision is expected by mid-August.
Evidently, the Ontario government is treading carefully into unknown waters.
"We are taking a cautious approach on offshore wind," Cayley says. "More research and science are necessary before Ontario moves forward on offshore wind."
Offshore wind, especially in freshwater, is still in the early stages of development. According to Cayley, Sweden's Lake Vanern is the only operational freshwater offshore wind project. An Ohio demonstration project located in Lake Erie - Freshwater Wind's Icebreaker Wind Project - is in the development stage and is not yet operational.
Kourtoff, on the other hand, says Lake Vanern was not the first freshwater offshore wind farm. That designation, he says, belongs to the Lely freshwater offshore wind farm in the Netherlands.
Kourtoff adds, however, that both freshwater wind farms can be deemed successes. A second phase of the Lake Vanern project is being built, and the Lely offshore wind farm has been operational since 1994 with “no adverse effects on the lake’s water quality," he says.
Nonetheless, “[The Ontario government wants] to make sure offshore wind in Ontario is done right,” Caylee says. “Ontario will monitor these projects and the resulting scientific knowledge. Ontario will work with our U.S. neighbors on research to ensure any future proposed projects protect the environment on both sides of the Great Lakes."