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The shutdown of Siemens’ Tillsonburg factory is sending shock waves through Southwestern Ontario’s green-energy manufacturing sector, left scrambling after the surprise move.
One of four green-energy manufacturing factories built in Ontario under a controversial 2010 deal between the province and Samsung, the Tillsonburg plant’s owner cited such factors as falling demand for its wind-turbine blades and growing competition for the closing.
The industry challenges extend far beyond the Tillsonburg plant.
In Windsor, company and union officials at wind-tower maker CS Wind said it will take time to get a grip on the fallout of Siemens’ closing.
“We don’t have a lot of details yet,” said Paolo Piunno, CS Wind’s project manager in Windsor. “We don’t know the exact impact . . . it’s too early.”
The plant, which has partnered with Siemens in the past, is shifting focus to international markets, hoping to boost job security for its more than 300 employees.
A good move, said one researcher, since export markets might just be Ontario renewable energy manufacturing’s best bet for growth.
“The wind industry and wind- power generation is going to grow very significantly in Canada and North America, for sure. It’s starting to become cost-competitive with gas,” said Binnu Jeyakumar of the Pembina Institute, an energy sector think-tank.
“You have to look at longer time scales . . . Investment in the wind industry has been only growing and is projected to grow,” he said.
Last fall, Ontario’s Independent Electricity System Operator backed away from signing a second round of large renewable contracts — deals that would have likely given Ontario’s green-energy manufacturers a big boost, said University of Guelph economist Ross McKitrick.
Pair that with public outrage over sky-high hydro rates — and political pressure to act — and McKitrick said Ontario’s turbine boom is all but over.
“These plants were only set up because of subsidies and the large (government)-procurement programs. There was an artificial demand,” he said. “Without those procurement deals, there’s no reason to be building these turbines here.”
NDP energy critic Peter Tabuns cites another problem — privatization and hasty Liberal policies — as the force straining Ontario’s renewable sector.
With files by Dave Battagello, Windsor Star
In 2010, under a multibillion-dollar agreement with the province, Samsung announced it would build four manufacturing plants to supply the wind and solar-energy market.
London: Solar modules, about 200 jobs originally expected, partnership with Canadian Solar.
Windsor: Wind-turbine towers, about 300 jobs, partnership with CS Wind.
Tillsonburg: Wind-turbine blades, about 300 jobs, partnership with Siemens.
Toronto: Solar inverters, about 200 jobs, partnering with SMA.
2003: Liberals elected; vow to close Ontario’s dirty coal-fired power plants.
2009: Liberals plunge into green energy with law taking away local control over projects. Producers are signed to long-term contracts, some paying 10 times what consumers pay for power.
2010: Multibillion-dollar green energy deal signed with Korean industrial giant Samsung.
2011: Backlash takes down Liberal ministers in two Southwestern Ontario ridings.
2014: Coal-fired plants shut down, years later than planned.
2015: Auditor general reports Ontarians have paid $37 billion more than market prices for power over eight years. Ontario reaches 2,300 operating wind turbines.
2016: Contracts awarded for another 300 megawatts of wind power, process begun to buy another 600 MW. Government scraps 10 per cent subsidy on power bills, but eight months later announces other relief.
2017: Large renewable energy buys suspended; smaller projects continue.
Tuesday: Siemens announces closing of Tillsonburg plant by January 2018, with just more than 200 of the 340 workers to be pink-slipped immediately.
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