Debora Van Brenk
London Free Press
November 19, 2012
Ontario plans to appeal an international ruling that smacks down its requirement green energy producers — paid hefty premiums at taxpayer expense — also build some of their hardware here.
The move comes as one group says Ontario’s green energy rules have already generated $30 billion in investment.
The subsidies Ontario pays have attracted many solar and wind-powered projects to the province, including more than 1,200 industrial wind turbines — many of them in Southwestern Ontario.
But Japan and the European Union complained to the World Trade Organization (WTO) that Ontario’s Green Energy Act violates the General Agreement on Tariffs and Trade, the playbook for international trade.
As part of its push to create new manufacturing jobs and increase renewable energy, the province pays a premium to companies for every kilowatt of power they produce using wind turbines, solar panels and biogas.
The catch is that at least some their parts and services must be developed in Ontario — 40% for solar, 25% for wind projects. That’s drawn protests from Japan and Europe and, now, the powerful WTO.
A spokesperson for Energy Minister Chris Bentley of London said the WTO hasn’t officially released a statement yet, so it’s too early for a detailed response.
But “our position on this issue remains that the FIT (feed-in-tariff, or subsidy) program is consistent with Canada’s WTO obligations,” said Nauman Khan of Bentley’s office.
The program is helping attract innovators and manufacturers and has created thousands of jobs, he said, with more than 30 companies already operating or planning to build renewable-energy manufacturing facilities.
“We will continue to explore all options to sustain these jobs and investments for Ontario’s future, including working with the federal government towards an appeal.”
The Ontario Susatinable Energy Association says domestic content rules are doing the job — bringing investment and jobs to Ontario.
“Somewhow, we’ve managed to attract $30 billion, thanks to the domestic content rules,” said OSEA executive director Kristopher Stevens.
Some of that investment is in the London area, with turbine blades and solar components either being made or planned for this region.
Stevens said most potential investors in green-energy construction have already jumped in here, so the WTO fallout’s not going to kill the business. “
There are lots of players here already. It may make others think about moving in.”
He noted it’s not the subsidized rates for producers at issue — European countries also offer feed-in-tariffs for energy that comes from renewable sources.
He said the best way to grow the industry though, is to develop smart electricity grids and energy storage solutions to reduce Ontario’s reliance on fossil fuels.
The Canadian Auto Workers and Communications, Energy and Paperworkers’ union said Monday the WTO ruling blows away inventive job-creation strategies essential to righting the sagging economy.
“Governments in Canada at every level must have the capacity to encourage local production through procurement policies. These kinds of thoughtful policies should be replicated right across the country — not dismantled,” CAW president Ken Lewenza said in a statement.
CEP national president Dave Coles called the decision “blatantly undemocratic.”
Both are urging the federal government to appeal the ruling.
That could leave the issue tied up in international courts for years.
Large industrial wind farms have been hotly contested in some areas, with the province having snatched away local control over their locations.
One wind-energy opponent says the subsidies and incentives — using taxpayers’ money to aid big corporations — aren’t the answer.
“You never want to be against local employment, but at the same time you’re using people’s monmey to hurt them,” said Esther Wrightman, who has been fighting large wind projects close to her Strathroy-area home.
Nor is she convinced the components are Ontario-sourced: one project near her is using turbine blades made in Arkansas and towers made in South Korea, she said.