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Posts Tagged ‘Jon Bennett’

Today from Parker Gallant, an explanation of where the money from industrial wind power generation goes. It’s worse than you thought.

Here is the link http://windconcernsontario.wordpress.com/2011/09/22/a-win-win-for-samsung-a-lose-lose-for-ratepayers/#more-31821

and here is the post.

A Win-Win for Samsung. A Lose-Lose for Ratepayers!

Posted on 09/22/2011 by MA

by Parker Gallant
On January 21, 2010 with much fanfare Dalton McGuinty’s Liberal Party issued a press release titled; “Korean Companies Anchor Ontario’s Green Economy”.  The McGuinty press conference to announce this event; labelled as the biggest wind and solar deal in the world was held at the TSX and he stated;

“Thanks to today’s announcement, we will be delivering more green energy for Ontarians to use — and more green energy products for North America to buy. With this step, Ontario is becoming the place to be for green energy manufacturing in North America.” .

The promise was it would create 16,000 jobs and a $7 billion investment. The investment amount has never been questioned, however what the press failed to report was the cost to Ontario’s ratepayers over the 20 years the contract for the 2,000 MW of wind and 500 MW of solar generation would be. It is over $20 billion that Samsung will be paid!

The PC party recently said this deal would cost each family in Ontario $732. per year. They don’t disclose how they came up with that value however, my calculations say that it will cost every ratepayer $119. per annum or $2,380 over the 20 years of the contract. My calculations are based on the delivery of approximately 4.7 million MWh (27% of rated capacity) of wind per annum at $135. per MWh and approximately 650 thousand MWh of solar (15% of rated capacity) at $443. per MWh less the current average cost of electricity of 7.3 cents per kWh.

It is also based on 4.5 million ratepayers. The McGuinty press release said Samsung’s 2,500 MW of renewable generation would be enough to power 580,000 homes. Missing in the press release was any reference to needing 2200 MW of new gas generation to back up Samsung’s wind and solar generation and paying the gas generators whether the wind was blowing or the sun was shining. That would add another $220 million each year (gas generators are paid approximately $100,000 per MW to sit idle) to the costs, and burden the ratepayers with another $50 per annum or an additional $1,000 over the 20 years.

Not included was the massive costs paid to deliver this power to our neighbours in Michigan, Quebec, New York and elsewhere as most of it will be delivered in the middle of the night or in the Spring and Fall when demand is low. My estimate also doesn’t include additional transmission costs (estimated at 4/5 cents per kWh) which will appear on the delivery lines of our hydro bills.

Now if the 16,000 jobs actually happened each of those jobs would be subsidized by the ratepayers at approximately $48,000 each. The math is simple; 4.5 million ratepayers pay $169 each to create those jobs and that amount is divided by the 16,000 jobs. But is that really going to happen?

Fast forward to August 30, 2011 and Samsung issued a press release on a website they called; www.cleanjobstoday.ca. Cute, eh-if its clean it must be good! Samsung’s press release was issued only days before the election writ was dropped and carried this message; “The company remains committed to fulfilling the terms of its Agreement and as a global, neutral company, has no interest in entering into a political debate.” It seems to me that they have in fact entered into a political debate, simply by issuing the press release knowing full well the election writ would be issued a week later. It is a fact that Samsung didn’t bother to register with the Ontario Lobbyist Registry until June 13, 2011 but perhaps they felt it wasn’t necessary as, from all outward appearances, it was our former Minister of Energy, George Smitherman that approached them.

Putting the foregoing aside however, it is interesting that the press release reports on the actual number of jobs that Samsung will create. The following “FACT” is taken directly from the foregoing press release;

“FACT: Samsung’s Agreement will see the creation of four new manufacturing facilities to produce state-of-the-art wind turbines and solar panels for its projects in Ontario, and for export around the world. Three of the facilities are now under construction and as a result, 600 people are at work today. 1,800 people will ultimately have jobs because of Samsung’s manufacturing commitment.”

So ultimately 1,800 people will have jobs, not the 16,000 promised by McGuinty back on that winter’s day in January 2010. This certainly ramps up the subsidy per job by a considerable margin and according to my calculation is an annual subsidy per job of $297,000.

The average cost of power delivered to the grid by Samsung will be 17.25 cents per kWh versus our current average TOU price of 7.3 cents per kWh. This is 135% more then we pay today. Samsung will generate a minimum of $927 million per annum meaning, on a cash flow basis, their $7 billion investment will be recouped in less then 7 1/2 years. The $927 million doesn’t include; cost of living increases in the contract (up to 20% to the cost of wind generated electricity), or the recently reduced “adder” of the (present valued) $110 million which will reduce that payback period.

Samsung’s press release also marginally overstates their anticipated production, forecasting they will provide power for 600,000 homes when all 2,500 MW are up and running. This is 20,000 more homes then the McGuinty press release stated but perhaps Samsung are confident that many Ontario families will be energy poor in the future thereby reducing our current annual average consumption to a lower level.
The final sentence in this press release will be sure to win the hearts and minds of all ratepayers and taxpayers in Ontario as it sums up by saying; “This is a win-win for Ontario’s taxpayers and hydro ratepayers alike. Samsung looks forward to continuing to partner with Ontario to create jobs in the production of clean energy for generations to come.”

In my opinion and from my humble perspective as a ratepayer and taxpayer I have some trouble in buying into this homily, however I’m sure there are plenty of McGuinty supporters like Dr. Suzuki, Rick Smith of Environmental Defence and John Bennett of the Sierra Club that see this as a happy event and are pleased with this wealth transfer to the Korean giant, Samsung.

Parker Gallant,
September 22, 2011

 

E-mail us at northgowerwindactiongroup@yahoo.ca

For more information on Dirty Business: the reality of Ontario’s rush to wind power, for which Parker Gallant was Contributing Editor, go to http://dirtybusinessbook.wordpress.com

And, visit http://www.windconcernsontario.org for news through the day

 

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