Premier Dalton McGuinty says his $7-billion deal with South Korea’s Samsung Group to create 16,000 new jobs over six years and generate 2,500 megawatts of renewable energy will “make Ontario the place for green energy manufacturing in North America.”
He’d better hope so. That’s a huge price tag to provide less than one-third of the 50,000 green jobs McGuinty promised would result from his Green Energy Act.
At 16,000 jobs (only 4,000 permanent) it’s $437,500 to create each one.
All while paying a premium price for renewable energy to a foreign-owned business consortium also getting highly-prized reserved space on Ontario’s transmission grid.
If it meets its commitments, Samsung could earn a $437-million bonus above what Ontario now pays to large renewable energy projects — 13.5¢ per kw/hr for wind, and 44.3¢ for solar. That compares to the cost of generating conventional energy of four to five cents per kw/hr.
Key to the contract — untendered, drafted secretly and announced Thursday as a done deal, angering competing energy suppliers — is the construction of four new manufacturing plants to produce wind turbines and solar modules.
McGuinty’s counting on them becoming successful businesses, filling orders from across North America. But as energy consultant Tom Adams cautioned, even where green energy manufacturing has succeeded in countries like Denmark, it still has to be heavily subsidized.
“The idea that we’re going to repeat the Danish success by following the same model here assumes that electricity consumers are prepared to put up with this kind of (subsidy) craziness for the long term, and I don’t see it,” Adams told The Canadian Press. “This idea that there’s going to be 50,000 green jobs is just a crazy fantasy that has no bearing whatsoever in reality.”
But it’s a “crazy fantasy” McGuinty must rely on to fulfill his broken 2003 election promise to shut Ontario’s coal-fired generating plants by 2007 (now 2014) to reduce greenhouse gas emissions and air pollution.
The government says this deal will add only $1.60 to the average bimonthly hydro bill. But that doesn’t include the 8% rate hike coming July 1 with Ontario’s new harmonized sales tax, nor the impact of other initiatives like cap-and-trade on electricity prices, which McGuinty supports.