Samsung Signs $6.6 Billion Deal to Build Wind and Solar Power in Canada

In what’s being described as the largest deal of its kind in the world, Samsung C&T and the Ontario government signed a $6.6 billion investment deal Thursday under which the Korean industrial conglomerate will build 2,500 megawatts of wind and solar power in the province, as well as establish manufacturing facilities that will build the equipment.
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The third player in the deal is Korea Electric Power Corp., the country’s largest utility, with 10,200 megawatts of generation capacity worldwide, including a new 1,200-megawatt wind farm in China.

The deal, initially proposed by Samsung a year ago, was spurred on by the province’s Green Energy Act, which was passed last year to provide generous incentives for clean-energy production. “This means Ontario is officially the place to be for green energy manufacturing in North America,” Ontario’s premier, Dalton McGuinty, said during a signing ceremony in Toronto.

Under the terms of the agreement, officials said, Samsung must build four manufacturing plants in Ontario, promising 16,000 direct and indirect jobs over the next five years. The energy generated will be enough for 580,000 homes.

“I think 16,000 jobs in this economy is pretty good,” said Mr. McGuinty, who has taken some criticism for selecting Samsung without an open tendering process. He rejected suggestions that Samsung’s presence would crowd out other suppliers.

The first phase will be built near Windsor, in southwestern Ontario where energy was once generated by a coal plant that is due to be decommissioned by 2014.

Korean trade officials said at the event that Samsung selected Ontario as a base of operations to make wind and solar equipment for customers not just in Ontario, but across North America.

Ontario’s green energy laws include domestic content provisions that require some of the equipment to be made in Ontario. It also gives the province a leg up in the race to supply wind and solar equipment to the rapidly transforming American electricity sector, Mr. McGuinty said. “If you ask around state capitals in the U.S., they would be secretly asking themselves why they didn’t do it first.”

Quebec adopted similar domestic content rules for its own wind sector, which is largely based in the Gaspe region on the south shore of the St. Lawrence River.

Samsung is a relative newcomer to the green energy business and says it is using expertise from its other heavy industry divisions, including its shipbuilding group, to manufacture wind turbines.

And it is not the only Korean firm pushing into the North American green energy market. Last year, Hyundai Heavy Industries moved into wind turbine manufacturing and has also been pushing to make inroads into the United States.

Source: http://greeninc.blogs.nytimes.com/2010/01/21/samsung-signs-66-billion-deal-to-build-wind-and-solar-power-in-ontario/