Trillium sounds off on Ontario’s decision to kill offshore wind
On the same day and at the same time as the Ontario Liberal Government was announcing its plans to shelve offshore wind for the foreseeable future (or at least until after the election) to conduct further scientific study, Trillium Power Wind Corp. was in the process of closing a significant financing.
“We were actually closing a $20 million financing and $9 million in deposits,” Trillium Power CEO John Kourtoff tells Canadian Green Tech in an interview. “We were closing at 3:00 pm and this came out at 2:00 pm. So we were already in the middle of the all the paperwork with the lawyers. You couldn’t have written a worse script.” He adds that both the Premier’s office and the Minister of Energy Brad Duguid knew Trillium was closing the financing that day.
A diversified financial company with tens of billions of dollars of investments in a number of different markets was going to provide the financing. “It was a win-win – a leading company in offshore in North America with a leading diversified financial company. It was going to be a real dream team. We’d been working on this for months,” Kourtoff says.
But all is for not now that the government has canceled all offshore wind projects. And while the Ontario government uses the term moratorium, it has, in fact, killed offshore wind development.
Two, nearly identical notices posted on the Ontario government’s Environmental Registry (one is from the Ministry of Natural Resources (MNR) and the other from the Ministry of the Environment) state that “applications for offshore wind projects in the Feed-In-Tariff program will no longer be accepted and current applications will be cancelled; the MNR will be cancelling all existing Crown land applications for offshore wind development that do not have a Feed-In-Tariff contract, including those with Applicant of Record status. MNR will not be accepting any new Crown land applications for offshore wind development. When there is greater scientific certainty, consideration of offshore wind development will resume.”
Kourtoff contends that what the government did was not a moratorium. “They confiscated all the registrations and site leases for the offshore wind sites in the Great Lakes. So they’ve stripped all developers of their wind sites,” he says.
Losing Applicant of Record status is a critical point, according to Kourtoff. “It’s akin to saying you bought some property from a municipality, were given the go ahead to build a house and then after the house was built, the municipality decides it didn’t want a house there,” explains Kourtoff, noting money spent to acquire the property may get refunded but none of the investment to build the house. “That canceling is really code for confiscation of all registrations done to date no matter how much work you’ve done, now how matter many studies you’ve done and for no good reason.”
On February 11 at 2:00 pm, the Ontario government announced its moratorium because it says little is known regarding the potential impacts of offshore wind on “drinking water and the effects of ice build-up on support structures.” The government says it will be monitoring two freshwater offshore wind projects: one in Sweden and another in Lake Erie near Cleveland OH with the goal of working with the US on future offshore wind energy in the Great Lakes.
“A bi-national collaborative approach to conducting research would leverage resources and expertise from within the entire Great Lakes region to focus on the scientific and technical challenges of developing offshore wind power in a freshwater environment,” says one of the notices. “These challenges include a better understanding of how noise behaves over water and ice, foundation designs, water quality impacts, and impacts to shoreline ecosystems and wildlife.”
This isn’t the first time the Ontario government has studied offshore wind in the Great Lakes. After a two-year moratorium beginning in November 2006, then Minister of Natural Resources Donna Cansfield gave offshore wind the green light on January 17, 2008. The news release stated that over the previous two years the Ontario government partnered with the US National Renewable Energy Laboratory to evaluate offshore wind potential in the Great Lakes; analyzed lakes Erie, Huron and Ontario, including depth, wind speed and other social and ecological values; developed wind power guidance documents for birds and bats; and established a partnership with Bird Studies Canada, the Canadian Wind Energy Association and Environment Canada’s Canadian Wildlife Service to set up a common database for monitoring wind power’s impact on birds and bats.
Canadian Green Tech asked Ontario’s Ministry of the Environment what had changed in the passed two years to force a change of heart on offshore wind. This is what the department had to say:
“MNR’s work leading up to 2008 related more to assessing the potential for offshore wind and possible suitable locations in the Great Lakes. Specifically, MNR’s work with the US focused on the evaluation of the wind resources in the Great Lakes in order to help identify locations that could support wind power development. While this research helped to develop new modeling and mapping products, we still need a solid scientific foundation that we can use to develop rules that we are confident will be protective of the environment and human health. Until we have this sound scientific foundation to use as a basis for developing the framework and rules for how future offshore wind projects can proceed, we will continue to take a cautious and protective approach.”
Kourtoff says there is no need for further scientific study, particularly as it relates to water quality issues. With Trillium proposing to site turbines between 17 km and 28 km offshore, it’s impossible to measure their impact on water quality.
“Water intakes are usually a half a kilometre out from the shoreline and then around that there is one kiliometre radius in which you can’t build,” he says. Besides, he adds, Trillium’s turbines will be located on bedrock, meaning there won’t be any impact on sand, silt and soil.
Despite an uncertain future for offshore wind in Ontario, Kourtoff says he will continue to fight. He insists that the province has lost, perhaps for a very long time, tens of thousands of jobs and major investments in manufacturing and aims to let the province know how many jobs it has flushed down the toilet. The company plans to issue press releases pertaining to the number of jobs that would have been created in the province if the offshore wind industry hadn’t been shuttered.
Of the $1.6 billion that was going to be invested in Trillium’s first project TPW 1, $1.2 billion was going to be invested in Ontario. About $500 million was going to be in the Niagara region, upwards of $110 million in ridings near Progressive Conservative leader Tim Hudak’s riding and even one manufacturer in Hudak’s riding was going to get additional work from offshore wind. There are studies that demonstrate the significant economic driver that offshore wind can provide. Most recently, the Conference Board of Canada released a report about three months ago, highlighting the economic impact that the offshore wind energy industry could bring to Ontario. That seems to have been lost on Ontario.
In addition, Trillium was doing its part to bring jobs to Ontario. It had reached an agreement with offshore wind turbine leader Vestas to set up at least parts of its manufacturing in the province. There were others, Kourtoff says, that were willing to set up entire supply chains in Ontario. That’s not going to happen now, he notes.
When asked what’s next for the firm, Kourtoff says the company is going to try and get the government to change its mind with respect to offshore wind and issue a clarification that the moratorium doesn’t apply to developments further out in the Great Lakes. He notes that there are differences for near-shore wind (developments less than 10 km from the shoreline) and recognizes that there may be issues that need to be dealt with. But he insists that confiscating the site leases isn’t the right way to go.
Kourtoff doesn’t rule out the possibility of launching legal action against the government as the other offshore wind developers are considering.
“If the government decides to maintain the confiscation of registrations and site leases, then it will be actionable and we will have to then protect investors’ rights,” he says.
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