Windsor loses out on $2.5B LG Chem plant
Business groups fault Ford’s move to scrap renewable energy projects
The Ontario government’s decision to scrap hundreds of renewable energy projects early in Premier Doug Ford’s tenure may have cost the city of Windsor a major chemical plant and more than a thousand jobs, business groups say.
In May, local business association Invest Windsor-Essex said the city is losing out on a $2.5-billion plant from LG Chem, a South Korean chemical company, because the region doesn’t have the electricity capacity needed to host the facility.
The plant would have supplied cathodes and other materials to the $5-billion LG Energy Solutions battery facility being built in Windsor.
It also would have brought between 1,000 to 1,500 jobs to the region, said Invest Windsor-Essex, boosting the city’s economic growth and bringing jobs to an area of southwestern Ontario that has faced workplace closures and layoffs.
According to Invest WindsorEssex, LG Chem required as much as 15 megawatts of power to begin building the 1.5-millionsquare-foot plant in 2024, but the province determined it will not have the electricity available by that time.
Brent O’Connor, an energy consultant with Energy Development Partner, said Essex County could have had the electricity to meet LG Chem’s energy needs by 2024 if the Ontario government had not cancelled nearly 800 renewable energy projects, including two in the region, in 2018.
Several cancelled energy contracts, all based in southwestern Ontario and part of the previous government’s Large Renewable Procurement (LRP), would probably have made up for lacking energy supply, O’Connor said.
Several of those contracts would have been completed already had they not been cancelled in 2018 and would have produced 188.4 megawatts of electricity, according to projections from the Independent Electricity Systems Operator (IESO), the Crown corporation responsible for
operating the electricity market in Ontario.
Otter Creek Wind Farm, which was set to develop 12 wind turbines north of Wallaceburg starting in the spring of 2019 before it was cancelled, would have had a generation capacity of 50 megawatts.
The Strong Breeze wind farm in Dutton-Dunwich, just south of London, was supposed to generate 57.5 megawatts of wind capacity.
“These contracts would have likely produced more than enough energy to have met LG Chem’s demand,” said O’Connor.
“It appears Doug Ford’s lack of foresight may have directly resulted in Windsor losing this multibillion dollar investment.”
The IESO anticipates demand for electricity in southwestern Ontario will double over the next five years — the equivalent of adding a city the size of Brampton to the grid.
Over the next two decades, greenhouse gas (GHG) emissions from Ontario’s energy grid are poised to surge more than 400 per cent as the province cranks up the dial on its underused fleet of natural gas plants, according to the IESO.
Since those renewable energy projects were cancelled, the province currently has no other way to compensate for the shutdown of a major nuclear reactor in Pickering, responsible for 16 per cent of provincewide power.
In 2019, not long after the renewable energy projects were cancelled, Associate Energy Minister Bill Walker defended the government’s decisions, arguing they were necessary to lower taxpayer costs and help shrink the province’s ballooning deficit.
“Our government has been very clear it would act to cancel any unnecessary contracts. Ontario has an adequate supply of power right now,” Walker told reporters at the time.
Spokespeople for Ontario’s Ministry of Energy did not respond to the Star’s request for comments.