"We’re offended that it’s a secret deal with no transparency or openness or opportunity for others to compete," said David Butters, president of the Association of Power Producers of Ontario.
The Korean consortium plans to build a 2,000 megawatt wind power facility and a 500 MW solar power facility, in five stages, by 2016 and to operate the facilities for 20 years. In an initial stage, the companies are targeting the completion of a 500 MW complex in Haldimand, Ontario, by 2012.
Samsung C&T is leading the project, including construction and financing, while Kepco will design power transmission and distribution as well as operate the facilities.
Ontario Premier Dalton McGuinty is hopeful that the Korean investment will directly and indirectly generate more than 15,000 jobs, according to the Toronto Star newspaper.
The deal undermines the feed-in-tariff, or FIT, program because it appears Ontario has set aside 500 megawatts of prime transmission capacity for the Korean consortium, Butters said. "We haven’t seen the deal, so we don’t know specific details or how large it is," he said. "What we do know is the government has set aside more than half the available transmission (capacity) in southwest Ontario."
The pending Samsung deal has also sparked political controversy. Tim Hudak, the leader of Ontario’s opposition PC party, said in a statement Thursday that McGuinty must call in Ontario’s auditor general to review "his secret multi-billion dollar deal with Samsung to guarantee the deal is fair to Ontario ratepayers."
Critics of a $7-billion green energy agreement between Ontario and South Korean giant Samsung said Wednesday it gives a foreign consortium an unfair advantage over local wind energy and solar producers.
The construction will occur in five phases, with the first being projects to generate 400 megawatts of wind power and 100 megawatts of solar power in Chatham-Kent and Haldimand County.
The South Korean consortium will also operate four manufacturing plants in Ontario, with the first three to build wind turbine towers, solar inverters and to assemble solar modules, to be operational within four years. The fourth plant, which will build the giant wind blades, will open shortly after the other three, said the source.
The Samsung project is expected to create up to 15,000 jobs in the province, a big step towards the Liberal government’s goal of creating 50,000 new jobs by transforming Ontario into an international hub for manufacturing and exporting green energy technologies.
Samsung will be paid "slightly more" than the 13.5 cents per kilowatt hour that the province pays for wind power under its feed-in tariff program depending on the job guarantees and manufacturing commitments, said another source.
The New Democrats wanted to see the details of the agreement, saying it was "critical" that it included solid job guarantees and firm commitments to keep manufacturing of new wind and solar technologies in Ontario.
"This government spent a quarter-billion dollars developing hybrid electric trucks in Oshawa and once they were developed the (manufacturing) work moved to Mexico," said NDP critic Peter Tabuns. "So I want to see that in fact the jobs are going to be here and we’re not just talking about a massive import program from South Korea."
Last September, in anticipation of the Samsung deal, the government directed the Ontario Power Authority to hold at least 500 megawatts of transmission capacity for the South Korean consortium, moving Samsung to the front of a long line for scarce transmission space.
The Canadian Wind Energy Association said Wednesday it had warned the provincial government last fall that the special treatment for Samsung was unfair.
"We have indicated to the Ontario government that we are opposed to the reservation of transmission capacity as a tool to incent investment," the association said in an email.
"Transmission is a scarce commodity in Ontario and the reservation of capacity is inconsistent with a feed-in-tariff program designed to provide equal access to transmission for all potential generators."
The Association of Power Producers of Ontario said the deal with Samsung violated the principles of openness and transparency and was unfair to local companies that had gone through the process with the government’s feed-in-tariff program.
"All those folks who went through the process in good faith are going to be thrown under the bus in favour of this deal that nobody knew about," association president David Butters said in an interview. "The reservation of transmission capacity is particularly egregious."
Some of the best areas in Ontario for wind and solar projects are in transmission constrained areas, said Adams, and Samsung not only got "extra juicy rates" for the power it will produce, it also secured valuable transmission line space.