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Canada

Relief but no joy after Ontario election

CANADA: The re-election of Ontario's Liberal government has brought more clarity concerning the future for wind energy development in the province, but questions remain about how the party's loss of seats will play out for the sector.

The 6 October election ended months of uncertainty over the future of the provincial government's feed-in tariff (FIT) programme and its long-term plan to have around 7.5GW of wind online by 2018. The opposition Progressive Conservative Party, which had been well ahead in the polls for much of the campaign, had threatened to abolish the FIT and cancel a controversial C$7 billion (US$6.7 billion) agreement with a Samsung-led consortium that includes development of 2GW of wind.

The Liberal victory takes both initiatives off the chopping block. "Generally, it's business as usual in terms of green energy," said Justin Rangooni, Ontario policy manager for the Canadian Wind Energy Association (CANWEA).

The government fell one seat short of a majority in the 107-seat legislature, however, meaning it needs at least one vote from another party in order to pass legislation. At this point, it is not clear what compromises premier Dalton McGuinty may have to make to gain the opposition support he needs, or how long he can hold on to power.

It is unlikely either the Conservatives or the New Democratic Party will demand changes to green-energy policy as a condition for keeping the government alive, said an election analysis by Fraser Milner Casgrain, a law firm active in Canada's renewable sector. But the Liberal Party's policies will almost certainly be seen as contributing to its drop from 70 seats to 53, it added.

There was clear rural-urban split in the vote, with some observers pointing to rural wind-farm opposition as a reason for the Liberals' lacklustre showing outside of city constituencies, and for the unseating of key cabinet ministers including environment minister John Wilkinson.

That could have an impact on how the government moves forward from here. "There will certainly be renewed pressure on the minority government to proceed cautiously with new initiatives in the area of green energy, and progress on already stated goals, projects and initiatives may be at risk of being slowed," said the law firm's analysis.

Even without the complication of a minority government, the Ontario's wind energy industry has been facing questions about when the next round of contracts will be awarded and at what price. Over the past 17 months, there have been 81 FIT contracts issued to wind farms with a combined capacity of 2.86GW, in addition to the 2GW set aside for Samsung.

"Longer term the opportunity is large," said Uwe Roeper, president of Ortech Consulting. "But in the short term, there are transmission constraints and we only need so much supply, so we can't keep going at the same rate we have been."

The FIT programme is due for a scheduled review, and the expectation is that the C$0.135/kWh rate for onshore wind projects is likely to be cut.

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