Stephan Savoia
Ontario has leapfrogged British Columbia as the go-to jurisdiction for green-energy investments, with its promise of generous long-term energy contracts that include a guaranteed revenue stream for solar, wind and other alternative power projects.
It's just the beginning of a battle between the provinces as they vie to attract billions of dollars in investment and jobs in this burgeoning sector.
"I think Ontario and B.C. are definitely going at it; it's a good fight," said Michel Letellier, president and CEO of Innergex Renewable Energy Inc., whose Quebec-based firm has operations in B.C. and Ontario, giving him a ringside seat.
However, he said, right now, "Ontario is probably the hottest market in Canada."
Ontario's larger market and its new competitive subsidy program gives that province the edge, he said.
But the B.C. government is manoeuvring to recapture the lead by unveiling policies in the next few weeks to establish the province as a "green-energy powerhouse."
Today, CIBC is hosting North America's top-clean energy companies for an invitation-only investors' forum in Vancouver. While B.C. has branded itself as the country's leader on climate-change policy, investors will be looking closely at which jurisdictions offer the best return on capital in this burgeoning sector.
"It's the same thing we look for in any company, an adequate return on capital investment, and if they have a good tailwind to move them along," said clean-energy analyst Michael Willemse of CIBC World Markets Inc.
Ontario's new energy policy offers that tailwind. While consumers grumble about higher electricity prices, investors are taking notice of Premier Dalton McGuinty's new Green Energy Act. "Ontario has the most attractive subsidy for power generation for these sectors," Mr. Willemse said.
Blair Lekstrom, B.C.'s Energy Minister, is determined to change that.
"I look at the clean energy sector as the oil and gas sector of the future," he said yesterday in an interview. "We are going to take British Columbia and become a green-energy powerhouse, not just in Canada, but in North America."
The results of a green-energy policy review are sitting on his desk but not ready for release. He said the review will lead to faster approval for clean-energy projects. More ambitiously, he wants to secure long-term export contracts to help other regions meet green-energy targets. "With what we are working on now, we'll be back in front in a month or two," Mr. Lekstrom predicted.
Ontario isn't going to give ground easily. The global economic recession has taken an enormous toll on Ontario, which has lost hundreds of thousands of jobs in its manufacturing heartland. Mr. McGuinty has vowed to create more than 50,000 jobs with his new policy. As well, he's burnishing his own green credentials by helping wean the province off coal-fired energy.
These capital-intensive projects thrive on the kind of long-term energy purchase contracts that both provinces offer. In Ontario, construction of the country's largest solar farm was announced this week and is based on the security of a 20-year contract. Pod Generating Group expects the $300-million project will be in operation this summer in Sault Ste. Marie.
Calgary-based Pristine Power Inc. has green energy projects in four Canadian provinces, and Harvie Campbell, Pristine's executive vice-president for strategy, ranks both B.C. and Ontario high for green energy-friendly climates.
Mr. Campbell said some details of Ontario's new policy are still being worked out. "If we succeed, we will spend serious money in Ontario, based on their new policies. We are doing the exact same thing in B.C. - this is a regime that is most friendly to clean-energy projects."
He expects B.C. will reclaim the lead once a call for clean-energy proposals wraps up in March. "That alone will put B.C. ahead of Ontario," he said. Those projects will add up to $3.5-billion in investment.
While Ontario's most significant opposition to its ambitions comes from consumers angry about higher energy prices, the controversy in B.C. has centred on opposition to run-of-the-river projects for environmental reasons.
However, one of the most visible of these mini-hydro projects is flickering to life this week with little fanfare.
In fact, more than one million visitors sailed right over it in the Peak 2 Peak gondola ride between Whistler and Blackcomb in the past year, but it would take an eagle eye to pick out the new power plant at Fitzsimmons Creek.
The $33-million power project by Innergex is small in scale - the facility will generate 7.9 megawatts of power by diverting part of the creek flow through a penstock. It's enough to supply all the energy needs for the ski resorts at Whistler and Blackcomb. The project started producing electricity this week, and the operators hope they'll be selling electricity by the end of the week.
Innergex has signed a 40-year purchase agreement with B.C. Hydro for the electricity it generates at Fitzsimmons Creek. With the construction complete and the river flowing as it should, the company's investors have a good measure of their returns.
With a report from Karen Howlett in Toronto
Justine Hunter