FIT Fallout Continues: Ontario Amends Contract With Korean Consortium

NAW Staff, Tuesday 25 June 2013 - 16:19:47

Two weeks after it announced the elimination of the feed-in tariff (FIT) for large-scale wind projects, the Ontario government continues to pare back the development of utility-scale wind projects.

The Korean consortium has agreed to modify the massive C$7 billion deal it signed with the Ontario government. The 2010 agreement called for the building of manufacturing facilities as well as 2,500 MW of wind and solar projects.

According to the Ministry of Energy (MOE), the agreement has been reduced to 1,369 MW.

The consortium - which includes Samung C&T Corp., Pattern Energy, Korean Electric Power Corp. and CS Wind, a Korea-based wind tower manufacturer - signed a $7 billion agreement in 2010 to develop 2,500 MW of wind and solar energy projects in the province. At the time, the agreement was the single largest investment commitment under Ontario's landmark Green Energy Act.

The agreement led to a number of significant investments in Ontario, including three renewable energy manufacturing facilities and the construction of four wind farms with a combined nameplate capacity of 869 MW and two 100 MW solar projects. They include the following:

·    149 MW Grand Renewable Energy Park (wind) - Haldimand County;
·    100 MW Grand Renewable Energy Park (solar) - Haldimand County;
·    270 MW South Kent Wind Park (wind) - Chatham Kent;
·    270 MW K2 project (wind) - Township of Ashfield-Colborne-Wawanosh (26 km north of Goderich);
·    180 MW Armow project (wind) - Municipality of Kincardine; and
·    100 MW Kingston North project (solar) - Kingston and Loyalist Township.

According to the MOE, another 200 MW of wind and 100 MW of solar will move forward under the amended agreement.

While the agreement led to the building of several production facilities and wind farms in the province, it has also fueled the growing anti-wind sentiment in Ontario. What's more, the Ontario government also allocated grid capacity for the consortium, which further angered locals, as well as rival wind developers that felt the consortium was receiving preferential treatment.

According to a MOE spokesperson, the consortium will continue to receive transmission access for the remaining projects under the agreement.

The agreement represents an estimated $3.7 billion reduction in contract cost - or about $24 per year for the average residential consumer.

"The province will consider how to best use the freed up transmission capacity associated with the projects that are not proceeding as part of Ontario’s review of the Long-Term Energy Plan with a focus on renewable energy, ratepayer savings and conservation," notes a MOE spokesperson.


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