Ontario municipalities 'ecstatic' future green energy contracts are on hold

Municipalities across Ontario are cheering the government's decision to suspend its competition for 1,000 megawatts' worth ofbig, new renewable energy projects.

But one industry association representingcompanies that were preparing to try tosnag a contract is shocked at the sudden shift in the winds at Queen's Park.

Ontario's energy minister minister said Tuesday there simply isn't the demand for power to go ahead with itssecond round of procurement.

• Ontario cancels plans for more green energy citing strong electricity supply

Instead, it can save $3.8 billion in costs related to the electricity systemand save residents $2.45 a month on their electricity bills,Thibeaultsaid.

Mayors rejoice

In the rural township of North Frontenac, Mayor Ron Higgins's phone was ringing off the hook after the surprise announcement.

His township's council was the first to pass a motion earlier this year demanding that any new project receive municipal approval in order to get the province's green light.

A one-timewind farmproposed for an area along the highway to Bon Echo Provincial Park had caused his residents much angst in recent years, said Higgins.

• Rural councillors call for greater voice in wind farm deals

After North Frontenac passed its resolutionmotion inMarch, more than 100 other municipalities followed with resolutions of their own, and pressure mounted this summer at a meeting of Ontario municipalities.

Still, Higgins only expected to have more inputin the next request for proposals.

"But it caught me off guard. I wasn't expecting them to cancel it outright at this point," said Higgins.

"I'm thrilled."

Wind association 'shocked' by decision

But not everyone was thrilled.

"We were extremely disappointed and shocked by the decision," said Robert Hornung, president of the Canadian Wind Energy Association, which represents project developers, wind turbine owners, manufacturersand others in the industry.

The association and its members will turn to making the case for a futurecompetition for renewable energy contracts, as the province embarks on consultations for a new long-term energy strategy due in 2017.

Hornungis convinced the province will need more wind powerto hit its greenhouse gas emission targets, and he hopes the decreasing cost of producing power from wind will be attractive.

But in the meantime, he questioned whether the move couldleave Ontario unprepared for future electricity needs.

"It's very true we dohave a surplus of power today," said Hornung.

"Butwhen you're procuring power today, you're looking to have that power come on line three or four years down the road and that's when new power needs are going to be emerging."

Move brings market uncertainty, says professor

Warren Mabee, a professor at Queen's University, shared Hornung'sview that the province could stand to better plan ahead, or bring on extra renewable energy for the day when one of its nuclear reactors needs to be taken off line.

He also questioned if the province might be hampering itslongtime goal of creatingan entireindustryaround green energy, which it intended to foster throughincentives and predictableprocurementplans.

"Byback-trackingon those long-term plans and saying, 'We're not going to buy as much,' they've introduced a strong elementof uncertainty into the marketplace," said Mabee.

"That's going to affect businesses, it's going to affect potentialjobs, it will have a rundown effect that's not going to have the effect they wanted."