An Ontario wind-turbine factory is closing, shedding over 300 employees, amidst growing competition from foreign clean-tech manufacturers, a glut of electricity in the province, and the government’s retreat from renewable energy projects.
The social, economic and potential environmental fall-out from the move has Ontario engineers calling for more ‘depoliticised’ clean energy system planning.
Siemens Wind Power made the announcement on Tuesday, six years after the Tillsonburg, Ontario, factory opened.
The plant was part of a $7 billion deal that the government negotiated in 2010 with a consortium led by South Korea’s Samsung Group to site four green energy plants in Ontario.
However, the company says, as renewable energy development has soared in recent years, competition from other wind energy parts manufacturers overseas has undercut the plant’s competitiveness. Prices for turbine blades have declined over two thirds since the deal was struck.
The firm also laid the blame on increased demand for larger turbines than the factory can produce, uncertainty over support for wind energy investment in the United States, and reduced demand in eastern Canada. Last year, Ontario scrapped $4 billion in clean energy projects, aiming to keep a lid on the politically explosive issue of soaring electricity prices.
In June, the Ontario Society of Professional Engineers calculated that in 2016, the province had “wasted” 7.6 terrawatt-hours (TWh) of clean electricity – enough to power 760,000 homes for a year, at a value of $1 billion.
The problem, they say, is that the province is producing too much and at the wrong times. Roughly 95 percent of solar power is not available when winter demand peaks, and roughly 90 percent of wind is not available when summer demand peaks. They add that solar capacity has reached its optimal maximum in the Ontario power system. Any extra solar capacity is likely to result in still further surpluses.
This causes a situation where large amounts of excess clean electricity has to be either exported at prices lower than the cost of production (or even at negative prices, where consumers are paid to take the electricity), or curtailed. Curtailment involves dumping of unwanted electricity by directing hydro dams to let water spill over the top, wind turbines not to turn, and nuclear generators to release their steam.
The association issued 21 recommendations on how to fix the problem and attempt to soak up the excess, and in so doing, reduce electricity prices.
One key suggestion is for the province to facilitate more rapid adoption of electric vehicles.
A second option is to develop a market for “interruptible power”, in which residents and businesses could access the surplus clean power at much cheaper rates than surplus ‘dirty’ power, in return for accepting potential supply interruptions.
Such an interruptible electricity market in turn could displace the use of fossil fuels by deployment of duel-fuel water heaters (switching between electric and natural gas when the flow of power is interrupted), and to produce emissions-free hydrogen fuel, making fuel cell vehicles more cost effective.
Energy economist Mark Jaccard helped design BC’s carbon tax, and he still supports it. But he questions just how politically viable a stringent tax—at the level needed to meet climate targets—can really be. So he also continues to explore how other policies that the public find more acceptable could work.