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In a huge factory on the outskirts of Tillsonburg, the transformation of Ontario's manufacturing economy is under way.

Here, in what was once a Magna International auto parts plant, German industrial conglomerate Siemens AG is building giant wind turbine blades, massive components formed from fibreglass, epoxy and balsa wood that are half the length of a football field. About 350 workers mould, bake and trim the huge blades, which are shipped to wind farms throughout Southern Ontario.

The plant's car-parts past is both symbolic and significant. As the province's traditional – largely automotive – manufacturing sector shrinks, the Liberal government has attempted to hasten a shift to green technology. The 2009 Green Energy Act (GEA), in particular, was designed to achieve this end – along with weaning the province off dirty, coal-fired electricity production. By subsidizing wind, solar and other technologies, and forcing developers to buy components and services from local companies, a clean manufacturing sector would be kick-started. At least that was the theory.

On the surface, the plan appears to have worked. The province is now sprinkled with green businesses that have – at least in part – replaced some of the collapsing manufacturing infrastructure.

About 130 kilometres due east of Tillsonburg, in Welland, another German-owned entity, Senvion Canada, has set up its own wind turbine blade plant. It employs about 140 people and produces 45-metre-long blades out of a former steel tube factory.

In Guelph, in a highly automated factory that once housed a metallurgical chemical company, Canadian Solar Inc. churns out solar panels that are shipped all over North America. A companion plant down the road in London makes solar modules and power components.

South Korean-owned CS Wind Canada Inc. is making wind turbine towers in Windsor, while Italian-based Silfab Solar Inc. makes solar panels in Mississauga, just outside Toronto.

Other companies as far afield as Sault Ste. Marie, Windsor, Carleton Place and Napanee are churning out solar panels and the racking systems that hold them, inverters that turn direct current into alternating current, and all manner of other components for green power systems.

The key question is whether the green manufacturing business is here to stay.

Critics say Ontario's green energy policies have actually driven manufacturing out of the province, because they have contributed to higher electricity prices. And the rules requiring developers to buy local no longer apply, thanks to a decision by the World Trade Organization following complaints from Japan and the European Union. That means domestic manufacturers must sink or swim on their own merits and compete with imported products, or look to export markets to make ends meet.

The Ontario government claims that its clean energy initiatives created 42,000 new jobs across the province as of 2013, the latest figures it has compiled. That's shy of the 50,000 it claimed would be created when the GEA was first passed in 2009, and includes construction jobs and temporary positions, in addition to permanent manufacturing employment.

But in communities where these jobs were created, any new employment is welcome after some dismal years of cuts.

For the town of Tillsonburg, securing a long-term place in green technology manufacturing in the form of the Siemens plant was hugely beneficial, said Mayor Stephen Molnar. The region had been badly hurt by the decline in the tobacco industry, he said, and auto parts manufacturing looked like its saving grace. But the recession took the legs out of that business, too. The Siemens project "came at an opportune time," he said. "It has enhanced our community by providing jobs and growth … and skill sets."

The old Magna plant that Siemens took over in 2010 was, like the province's manufacturing sector, leaky and in bad shape. But it was big, and that was to key accommodating the enormous turbine blades.

The conversion took more than a year, with interior columns removed to make a more open space, and a roof superstructure built to support the cranes needed to move the enormous 49- and 55-metre blades – which weigh 10,000 kilograms each – from station to station.

Siemens has four other plants – two in Denmark, one in China and one in Iowa – but the GEA and a big provincial subsidy to its development partner Samsung was enough to prompt it to build another in Ontario. "It certainly created a strong incentive for us to do it. It established a strong home market," said Greg Thrasher, manager for sales and strategy at Siemens Canada's wind division.

When the company started hiring for the Tillsonburg plant, it drew applications from more than 1,200 people for just over 200 positions. Many applicants were former auto workers in the region who had lost their jobs, Mr. Thrasher said. Fortunately, "a lot of the skill sets around things like painting and finishing were very complementary."

While stable government energy policies are necessary to keep the green energy industry moving forward in any market, Mr. Thrasher said, "we never anticipated that domestic content requirements would last forever." Indeed, Siemens expects the Tillsonburg plant will be a key supplier far beyond Ontario, sending its blades to wind projects in several other provinces, the United States, and – in certain circumstances – even to Europe. "Moving forward we see this as an integral part of the supply chain in the Americas and worldwide," Mr. Thrasher said.

Weeding out the weak

One hundred kilometres to the northeast of Tillsonburg, another international green energy giant has also established what it says are permanent roots. Guelph-based solar panel maker Canadian Solar Inc. has three big plants in China, but it now also has two in Canada – one in Guelph and another in London. The local content provision of the GEA was a key reason these facilities were built in Ontario, said chief executive officer Shawn Qu.

"It goes without saying that the Ontario Green Energy Act helped to kick-start clean tech manufacturing in the province," said Mr. Qu, who was born in China but went to university in Canada.

Still, he said, the end of local content – and with it the "feed-in-tariff" that paid high, fixed prices for solar and wind energy generated by large projects – puts the industry "at a point of divergence." Not every green tech company will stay, he said. "The strong ones will survive and sustain, the weak ones will not."

Indeed, several clean tech companies that sprung up after the GEA was introduced have already padlocked their gates. Siliken Canada shuttered a solar panel plant in Windsor in 2012; U.S.-based Flextronics International Ltd. closed its panel operations in Newmarket in 2014; and DMI Industries, which made wind turbine towers and once employed more than 200 people in Fort Erie, closed up shop in 2012.

Their reasons were varied, ranging from struggles with strong competition to financial problems at parent companies.

For Canadian Solar, Mr. Qu said, the potential to supply the booming solar panel market across North America from its efficient Ontario plants means it will be around for the long term. It is shipping panels from its Guelph factory to projects in the United States.

Certainly, in a global sense, renewable energy appears to be hitting its stride. Investment is accelerating amid an increasing consensus that this is an industry poised for huge growth. The market for green bonds – debt designed to fund environmentally friendly projects – has exploded from about $11-billion in 2013 to more than $100-billion this year. And some big investors – from the Rockefellers to Warwick University – are divesting from oil and gas and plunking that money down on cleaner investments. The renewable energy industry around the globe employed more than 7.7 million people in 2014, up 18 per cent from the year before, according to the International Renewable Energy Agency.

All of this comes as the cost of renewable power, from wind and solar in particular, is falling and becoming more competitive with traditional generation in some jurisdictions.

Analytica Advisors, an Ottawa research firm that monitors Canada's clean tech sector, said the global market for all clean technology products has now surpassed $1-trillion a year. China is by far the biggest player, and is taking an increasing share of the market. Canada has about $12-billion of the total, but we are losing market share globally, according to the Analytica numbers.

Canada can do a better job tapping the market if there is better co-ordination between governments at all levels and the private sector, said Analytica Advisors' president Celine Bak. "The clean technology industry is, by definition, one that finds itself in strategic conversations with the public sector," she said. If these discussions don't work effectively, the sector's growth could be at risk.

Ms. Bak said she would rate Ontario's green energy policies, which tried to boost the industry while shifting to cleaner power production, as "a moderate success. " The government should have worked harder at emphasizing the value of eliminating coal-fired power production, she said, and also designed the system to ensure there was more community involvement in clean power projects.

Rising electricity rates

For George Smitherman, the former Ontario cabinet minister who introduced the GEA, the idea was always to kick-start an industry that would last over the long term. "It is very easy to create flourishes of activity," he said in a recent interview, but harder to create businesses that are enduring. He is gratified that some companies that set up shop are finding markets outside the province, particularly in the U.S.

But the policies weren't just aimed at creating manufacturing jobs, Mr. Smitherman insists. The province also wanted to build expertise in finance, engineering and project development. "We were trying to nurture the white-collar side of green energy as well. There is [now] a big cluster of renewable related jobs in the downtown core of Toronto."

Mr. Smitherman admits that Ontario's green energy policies did not roll out entirely efficiently. Bureaucratic delays in issuing permits for projects gummed up the system and "ate up some of the clock" in getting companies established, he said.

One of the most intense criticism of Ontario's green energy provisions is that they have driven electricity prices up sharply because renewable developers were guaranteed high rates. Electricity has gone up in price substantially over the past few years, Mr. Smitherman acknowledged, but he insists that only a small part of that is a result of the increase in renewable power generation. "There have been investments in reliability, there has been investment in new supply, there has been the elimination of coal, and there has been reinvestment in nuclear," he said, and all of this added costs.

Over all, Mr. Smitherman has no regrets in bringing in the GEA and getting Ontario to support a sustainable renewable industry. "The times required bold action and those bold actions have created the prospects for Ontario to be an enduring player in clean energy, which in the next decades will be a market measured into the trillions of dollars," he said. "It was right for Ontario at the time."

Current Ontario Energy Minister Bob Chiarelli said the local content rules, even though they were relatively short-lived, "enabled us to jump-start the sector" because "we got the benefit of six years of that protection." Now, many manufacturers have adjusted to the new environment and are being helped by huge demand from the United States, he said. "In the U.S., they are building solar farms so fast that they can't supply themselves with panels. They are importing them from Canada."

He, like Mr. Smitherman, said most of the reason for higher electricity prices is not an expanded renewable sector, but other factors such as new transmission lines, upgrades to hydro power stations, and new gas plants. Unfortunately, he said, "anything we did was more expensive than coal."

Still, those who opposed the GEA have not changed their tune, and remain adamant that it has done little for the province except push up electricity rates.

"The [Green Energy Act] has doubled our power rates and will continue to push them up as long as the government keeps forcing more wind and solar onto the grid," said Ross McKitrick, a University of Guelph professor and author of a widely quoted 2013 study of the legislation.

That report, published by the Fraser Institute, said the Liberal policies had a "disastrous" impact on energy rates, and consequently threatened competitiveness of manufacturing and mining because of higher costs. Most green jobs are temporary, the report said, and would be offset by others lost as a result of high electricity prices. And any environmental benefits from closing coal-fired power plants could have been achieved by "relatively low-cost retrofit options," it said.

Broadly, it doesn't make sense to build green energy capacity "just because other governments around the world are making similar mistakes," Mr. McKitrick said, adding that some jurisdictions are scaling back programs after losing a lot of money.

John Yakabuski, the Progressive Conservative energy critic in the Ontario legislature, said his party would scrap the GEA if it takes power in the province. The legislation has caused a net loss of manufacturing employment to the province, he insists, because so many jobs have disappeared as a result of high electricity rates. His party would replace the GEA with something "more workable," he said, but he provided no details.

Mr. Yakabuski said Ontario's Auditor-General, in a 2011 report, was highly critical of the Liberal green energy plan, saying that it would add substantially to the cost of electricity, would generate mainly short-term construction jobs and was not subject to enough oversight or analysis. This week, the Ontario Chamber of Commerce released a survey that suggested as many as one in 20 business are worried about their survival because of high electricity costs.

Targeting other markets

For Paolo Maccario, chief operating officer at solar panel maker Silfab Solar Inc., there is no doubt Ontario's green energy program "got the ball started" for the renewable manufacturing industry, even if the policy was poorly executed in some ways. "So long as we are nimble enough and continue to improve," the province's clean tech manufacturing sector can get a piece of what is one of the fastest-growing industries in the world, he said.

At Silfab's panel plant in Mississauga, 120 employees churn out about 1,800 solar panels a day, thanks to a highly automated production line . One-armed orange robots are involved in almost every part of the process, helping solder, assemble and test the photovoltaic cells, as well as laminating and stacking the panels.

To compete, maintaining an efficient and automated manufacturing process is key, said Silfab's head of business development Geoff Atkins. Like Siemens' wind turbine blade plant, Silfab's solar panel operation was established to serve a burgeoning Ontario market but is now looking farther afield. "We have had the opportunity to enter into the U.S. market and secure some large contracts," Mr. Atkins said. "We believe we can compete because we are automated."

Silfab is looking for customers who don't necessarily want the cheapest product available, but who desire a high-quality panel that can withstand tough weather conditions. And Mr. Atkins said, the company is small and nimble enough to shift to new technologies and retool when necessary – something its Chinese high-volume competitors have a tougher time doing. Silfab is already working on double-sided solar panels than can generate power from both direct and reflected sunlight, and others that are incorporated into windows.

John Gorman, head of the Canadian Solar Industries Association, is unequivocal about Ontario's success in creating a globally competitive green energy industry. While some players have closed or left the province, he conceded, those that remain are strong and are positioned to be global competitors. The province "has not only achieved the remarkable feat of creating an industry that has rolled out 10.7 gigawatts of renewable energy, but it has remarkably positioned Ontario's industry to participate in a burgeoning global market at exactly the right time," he said.


How to build a blade
Each 10,000-kilogram wind turbine blade manufactured at Siemens Canada's plant in Tillsonburg, Ont., is constructed as a single structural component. Here's how the process works:

Collect the materials
Components comes from around the world: Fibreglass arrives on big rolls, while resin comes in huge containers.

Form the blades
As many as 30 layers of fibreglass sheet are placed on an enormous mould, and a device like a big squeegee is used to get all the wrinkles out. Balsa wood is layered between the glass to give it strength and lower the weight.

Inject the resin
When all that is in place, liquid resin is drawn into the mould with a vacuum, infusing the fibreglass. In the hollow middle of the blade, an I-beam made of birch plywood and fibreglass gives it extra strength.

Curing and machining
After five hours of curing, the blade is inspected with an ultrasound scan to detect any wrinkles. Workers grind off any defects and smooth the blade, then drill holes at the base where bolts will mount it to a hub. A hot oven gives the final cure.

Final detailing & shipping
After painting and final detailing, the blade goes to a storage yard, ready for shipment on a special trailer that can handle the oversized load. The Tillsonburg plant makes blades 49 and 55 metres long, and produces roughly one blade a day. In February, the plant built its 1,000th blade.


Pushing the boundaries of renewable

One of the goals of Ontario's green energy program was to create an "ecosystem" of companies creating innovative products that would contribute to the advancement of renewable energy technology. While many have sprung up to build wind turbine blades and towers, or solar panels and racking systems, some are working in more exotic corners of the renewable world.

Solantro Semiconductor Corp.
This Ottawa firm makes computer chips that help turn the direct current from solar panels into useful alternating current more efficiently than with traditional "inverters." By doing this at the chip level, the conversion can be carefully controlled and measured, making it easier to distribute power among thousands of households connected on a "smart" grid.

Temporal Power Ltd.
This company builds huge cylindrical flywheels that store power in the form of kinetic energy as they spin. Electricity can be very quickly transferred to and from the flywheels, making them useful to balance brief fluctuations on an electrical grid. Ten of the 4,000-kilogram devices have already been installed at a site northwest of Toronto.

Hydrostor Inc.
The Toronto company is developing a system that stores electrical power in the form of compressed air, which is held in giant balloons that are anchored at the bottom of a body of water – a large lake or the ocean. When the power is needed, the air is channelled back to the surface where it drives a generator. A demonstration system is currently in place in Lake Ontario.

Follow Richard Blackwell on Twitter: @blackwellglobeOpens in a new window

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