by John Spears, Toronto Star
Ontario consumers risk paying up to $65 a year extra in electricity bills because of the province’s renewable energy agreement with Samsung C&T Corporation, says an energy analyst. Aegent Energy Advisors calculates that consumers will collectively pay up to $786 million more annually for power generated by the 2,000 megawatts of wind power and 500 megawatts of solar power that Samsung will install.
Aegent says the added cost will come largely because Samsung’s output will command a premium price, averaging 17 cents a kilowatt hour in the first year and rising to 18.2 cents a kilowatt hour by the end of the 20-year agreement.
That compares with a current average price in Ontario – including power sold both under contract and on the open market – of 7 cents a kilowatt hour.
Moreover, Aegent says Ontario already has enough electricity. As a result, much of the power produced by Samsung will be exported, at prices of 3 to 4 cents a kilowatt hour.
If 100 per cent of Samsung’s output is exported, Ontario would lose $786 million under current market conditions, Aegent estimates. That’s $65 per household.
Even if only 50 per cent is exported, the loss would still be over $600 million, according to Aegent.
“Any way you slice it, the economic impact of the Samsung deal is driven by its premium price for power, and the extent to which the power is surplus to Ontario’s needs,” Aegent says.
Energy minister Brad Duguid dismissed the analysis as being based on “false assumptions” and “incredibly torqued.”
Aegent, for example, assumes Samsung’s power will be surplus, he said. But Ontario will need the new renewable power as it continues to shut down coal-fired plants, and then has to start taking the reactors at its Darlington nuclear station out of service for major mid-life refits.
The analysis also assumes all the Samsung power were to start up at once, when in fact it will come on line over a period of years, Duguid said.
But Conservative candidate Rocco Rossi told a news conference at Queen’s Park said the analysis shows the Liberals have made a “mess” of the power system.
He noted that Ontario sold surplus power to neighbouring states and provinces at a loss totaling $6.6 million earlier this week.
Samsung called Rossi’s statements “idle, unsubstantiated speculation.”
The company said in a release that it will invest $7 billion in Ontario under the current agreement and “kick-start a whole new industry”.
The company will build four new manufacturing plants in the province to make wind turbines and solar panels, employing 1,800 people, the company said.