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$25 million penalty won’t end offshore turbine moratorium, province says

Offshore wind power remains dead in the water despite the $25 million a free trade tribunal awarded a U.S. company for a stalled project in Lake Ontario.

The Liberal government’s 2011 moratorium on freshwater wind turbines will stick until more scientific evidence is available on their health and environmental effects, Energy Minister Glenn Thibeault said Friday.

“We have to get it right,” he told reporters at Ontario Power Generation’s Darlington nuclear power plant, which begins a 10-year, $12.8 billion refurbishment this weekend to extend its operating life by 30 years.

“When it comes to offshore, there are many concerns that are being brought forward by some of the experts and by some of the stakeholders,” added Thibeault, who took over the energy portfolio in June.

Officials said more research is needed on the effects of freshwater wind turbines on inland lakes and water quality as it impacts various species, along with issues such as sound propagation and effects on humans.

The government has 20 days to review the $25 million claim in favour of Windstream Energy, which was awarded a contract in summer 2010 to build a 300 megawatt wind turbine project off Wolfe Island near Kingston.

But the effort was put on hold before construction began when the government announced the moratorium six months later, citing environmental concerns in advance of that year’s provincial election.

Windstream subsequently filed a $568 million challenge under the North American Free Trade Agreement, arguing the moratorium was “arbitrary, irrational and discriminatory.”

Opposition parties said the $25 million award – just over 4 per cent of the amount Windstream sought – from a NAFTA tribunal is just the latest example of citizens being stuck with a bill with nothing to show for it.

“Once again, it seems that Ontarians will pay a heavy price for another energy project cancelled by the Liberals out of their own political self-interest,” said New Democrat MPP Peter Tabuns, his party’s energy critic.

Tabuns (Toronto-Danforth) noted Ontario Auditor General Bonnie Lysyk has found the government’s move to scuttle natural gas-fired power plants in Oakville and Mississauga before the 2011 will cost up to $1.1 billion over 20 years as the facilities are moved to Sarnia and Napanee.

“This is more money wasted for power facilities that we did not need and that were never even built,” said Progressive Conservative Leader Patrick Brown.

Thibeault acknowledged the award to Windstream is substantial, which is why the government – and the federal department of Global Affairs whose lawyers defended the NAFTA challenge – are taking full advantage of a 20-day review period to consider their options.

“No matter what, $25 million, in my opinion, is still a lot of money,” Thibeault told reporters at Darlington, where he toured a control room simulator and a mock-up of a nuclear reactor.

It remains unclear whether the federal or Ontario governments are on the hook for the $25 million payout to Windstream, Thibeault said.

Options include applying to court to have the award set aside, but Thibeault left open the possibility that Windstream’s project in Lake Ontario could one day proceed given the company’s contract with the province remains in effect, according to the tribunal ruling.

“That’s part of some of the stuff we have to discuss with the IESO,” he said, referring to the Independent Electricity System Operator, which manages Ontario’s day-to-day electricity needs.

Toronto Star