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Three years after Ontario signed a $7 billion green energy deal with Samsung, the first projects are in sight. Ontario’s controversial $7 billion deal with Samsung Renewable Energy is running late. And delays in the initial stages of the deal are likely to cascade into further deferrals, the company says.
But in a rare interview, Samsung’s top man in Canada defended the company’s agreement with the province, which has become a lightning rod for critics of the Liberal government’s renewable energy policies. Ki-Jung Kim said that Samsung has been surprised at the length of time it has taken to get regulatory clearance for its wind and solar projects.
With the first two phases of the five-phase mega-project already delayed by a year, Samsung is now negotiating with provincial officials to extend deadlines for completing the other three phases beyond the original date of 2016.
Kim, who is executive vice president for Samsung’s Ontario project, said the company hasn’t wavered in its commitment to green energy. “Samsung is a globally responsible company; we are doing the right things in the right way,” he said.
“Renewable energy we believe is the right thing we have to pursue.”
Critics aren’t so kind. Conservative energy critic Vic Fedeli views the Samsung deal, along with the rest of the Liberals’ green energy policies, as extravagant — though he doesn’t blame Samsung for taking it: “If somebody opens up a treasure chest in front of you and says: ‘Dig in,’ you’re going to dig in.”
With the storm of debate around the deal, Samsung has rarely been heard from. “We are a little bit shy,” acknowledged Kim. “That is our corporate culture.”
There’s not much shy about the project, signed in 2010. It commits the company to invest $7 billion. It must set up four manufacturing plants and develop 2,000 megawatts of wind power, plus 500 megawatts of solar. In return, the company gets 20-year power contracts at guaranteed prices considerably higher than current wholesale market rates.
It’s eligible for a further $110 million in incentive payments — an amount negotiated down from $437 million after Samsung couldn’t meet original target dates for some projects.
So far, Kim says, the company hasn’t received anything. That’s because its first projects haven’t yet started to deliver power — and won’t until next year.
It’s not for lack of effort, Kim insists. “We are working very hard to fulfill our contractual obligations to the people of Ontario.” Three of the four manufacturing plants have opened to date, each with a different corporate partner: A turbine blade plant in Tillsonburg; a wind turbine tower plant in Windsor; and a facility for solar equipment in Toronto.
Kim says the total investment so far is about $300 million, with 380 jobs created. That’s a far cry from $7 billion and 900 jobs
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