Pearl Ing, the director of the for Ontario�s Ministry of Energy and Infrastructure, helped author the province’s famed Green Energy Act. Ing has detailed, inside knowledge of the legislation, which has attracted billions of dollars in new� green investments.� But the Green Energy Act is facing challenges, including from Japan which is considering filing a complaint with the World Trade Organization (WTO), arguing the Ontario legislation unfairly favors provincial firms.
Green Energy Reporter: First off, are you concerned by the impact the Japan-led WTO consultation will have on the Green Energy Act?
Pearl Ing: I understand that the Department of Foreign Affairs and International Trade� are working with Word Trade Association� officials to identify whether the EU and US have a �substantial trade interest� in the complaint required to participate in the consultations. We are reviewing some preliminary information we�ve received about Japan�s claim. We do not have full details. Our position is that Ontario’s Green Energy Act is consistent with Canada’s international trade obligations under the WTO. Ontario�s measures are designed to encourage renewable energy development in Ontario. Ontario will work closely with the Canadian Government during the consultation process to ensure that Ontario�s position is understood, and its interests are protected.
G.E.R.: Tell us about the process that led to the implementation of Ontario�s feed-in tariff system?
PI: At first, it was a lot of brainstorming and discussions with our policy team at the energy and infrastructure ministry in Toronto. At the time, the global financial crisis was unraveling and GM and other automobile makers, which are big employers in the province, were shedding jobs. All in all, these events highlighted the need to find new sources of jobs and economic growth for the province. One obvious route was the continuing development of our renewable energy sector. A few years back Ontario implemented some popular programs as part of our bid to cut our CO2 emissions, like the RESOP (Renewable Energy Standard Offer Program). However, we felt more could be done to create long term, well-paying, green collar jobs. Based on these conclusions, the government directed the development of the Green Energy Act, which has as one of its signature policies a province-wide, feed-in tariff program for solar and other renewable energy projects.
G.E.R.: How does the Ontario feed-in tariff differs from similar European subsidy programs?
PI: The Green Energy Act�s feed-in tariff program , as an economic program, first and foremost, seeks to create jobs to make up for the jobs we’ve lost because of the contraction experienced by the North American automobile sector. Therefore with the feed-in tariff also comes a strong Domestic Content Requirement (DCR). Our DCR ensures that a majority of the parts and technology that make up a solar or wind farm are actually manufactured in Ontario, by Ontario workers. So, while we are very happy to support investors with subsidies, in return we expect companies setting up shop in Ontario to create jobs. If you will, the DCR is our return on investment. Specific to the Ontario feed-in tariff, unlike some similar programs in Europe, we cover the whole renewable energy spectrum; we back wind projects as well as bio fuel and bio mass projects.
G.E.R: What are your DCR requirements?
PI: Currently, 25 percent of the components supporting wind projects have to be manufactured in Ontario. By 2012, 50 percent of wind projects and 60 percent of the parts that make up a solar project will have to be produced inside the province.
G.E.R: Will project developers be able to meet the ambitious goals set up by your DCR and at the same time remain competitive?
PI: From an Ontario perspective, the DCR is an economic decision that, if successful, will be a real job creator. Obviously, we are ready to work with existing and potential investors and help them meet our DCR requirements. So far, though, what we are seeing is strong investor interest. Just this year the Ontario Power Authority (OPA) awarded contracts supporting the construction of 2, 421 megawatts of solar projects backed by our FiT program. From the start, we�ve been very transparent and have actively communicated on our program and its requirements with investors.
G.E.R: It seems that despite concerns over your DCR, investors are heading north to Ontario. What’s motivating them?
PI: Stability! While some developers might be concerned by our DCR program, what the Green Energy Act offers is what many investors seek: long term stability and predictability. Unlike our neighbors to the south who are still trying to implement some sort of comprehensive energy and climate change legislation, Ontario, with the Green Energy Act is a step ahead, having already deployed its own road map to a clean energy future. Add to that, our proximity to the very big U.S. energy market, and I think investors consider Ontario as an ideal place to set up shop.
Photo: Ontario Ministry of Energy and� Infrastructure