Thought Leadership SIEMENS
“An Exciting Ride So Far”:
Siemens Analyzes the
State of Ontario’s
Wind Industry
Published by
www.ofit2015.com
“An Exciting Ride So Far”:
Siemens Analyzes the
State of Ontario’s
Wind Industry
By Elizabeth Judd,
Canadian Clean Energy Conferences
Reflecting on the world six years after the implementation of the FIT Program, Greg Thrasher, head
of strategy and sales for the Wind Power Division at
Siemens Canada, says that Ontario has been a “very
exciting place and has seen enormous success.”
He is particularly pleased that Ontario has demonstrated a commitment to procuring at least an additional 600 megawatts of large-scale wind over the
next three years, a move that will reinforce the role
of wind power in the provincial power generation
mix for the immediate future.
“The introduction of the FIT program created an
influx of investment at all levels of the renewable
energy value chain,” explains Thrasher. “In that regard, while there might be some criticism, the FIT
Program accomplished its central tenets: to create
a green energy economy and also to eliminate coalfired power generation.”
According to figures provided by CanWEA, the Canadian wind energy market is now the ninth larg-
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“The introduction of
the FIT program created
an influx of investment at
all levels of the renewable
energy value chain.”
- Greg Thrasher,
Head of strategy and sales for the
Wind Power Division,
Siemens Canada
est producer of wind energy in the world with current installed capacity at roughly 7,800 megawatts.
Siemens holds a leading position in the Ontario
market with over 1,600 megawatts of installed capacity and counting.
Although the past few years have been undeniably
exhilarating for wind-energy companies in Ontario,
the future has a number of question marks. Thrasher
notes that “policy stability” is enormously important
and yet provincial priorities can reverse very quickly.
He cites the fact that domestic content requirements
were the basis for wind procurement in Ontario, but
this criterion “vanished” with a stroke of the pen at
the behest of the World Trade Organization.
“The province can use a transitional approach to the
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domestic content elements of the FIT Program, rather than a binary approach to driving investment in
the province and really improving the competitiveness of the renewable energy manufacturing and
service base,” says Thrasher. He notes that the current 600-megawatt procurement target is welcome,
but alternative-energy developers and manufacturers are still concerned that the region continues to
lack a long-term outlook and policy stability.
“The future beyond the next few years is very uncertain, which can be a constraint to future investment
decisions because you’re driving with your eyes
closed,” says Thrasher. “A long-term commitment
to a procurement target is something that’s really
needed. While it’s been an exciting ride so far, it’s to
be determined what we’ll see moving forward.”
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Wind Landscape in Ontario
“The province can use
a transitional approach to the
domestic content elements of the
FIT Program, rather than a binary
approach to driving investment in
the province and really improving
the competitiveness of the
renewable energy manufacturing
and service base.”
- Greg Thrasher,
Siemens Canada
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Thrasher underscores the tremendous progress
wind technologies have made over the past decade
in Ontario. With so many ambitious projects currently underway, it’s easy to forget that not so long
ago “breaking the single megawatt threshold was a
real achievement within the industry,” he says.
“Not only have the technologies associated with
wind energy improved, but the price for wind energy has decreased dramatically,” says Thrasher.
“Less encouraging, though, is the expense for constructing wind farms, which hasn’t really budged.”
Thrasher attributes Siemens’ success in the Ontario
wind market to partnerships, its technological innovations and commitment to the market in terms
of quality and service. Most importantly, though, he
views his company’s willingness to partner with
other providers in innovative, risk-sharing models
as a major success factor. For instance, he notes
that Siemens partnered with Samsung and Pattern
Energy when investing in the Tillsonburg blade facility.
Siemens opened the Tillsonburg manufacturing
plant in 2010 to provide wind turbine blades for
Siemens’ projects in the province. “At that time,
the market was very uncertain,” recalls Thrasher.
“There was a lot of political risk in the province, a lot
of policy risk and a whole lot of project risk as well.”
To underscore the importance of partnerships,
Thrasher points out that Siemens’ Tillsonburg facility just celebrated the completion of its one-thousandth blade this past February. At the same time, he
says, the company marked 1,000 days and one million hours without a lost-time case, a milestone that
underscores the company’s commitment to safety.
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Current and Future Projects
For Siemens, 2015 is “off to a shotgun start” in Ontario. In February, Siemens won the supply contract
for Veresen’s Grand Valley III project, rounding out
a partnership that installed nearly 100 megawatts
of wind energy. Specifically, the project will feature
16 Siemens SWT-3.0-113MW wind turbines, which
should come on line later this year.
Also in February, Siemens signed a contract with
Northland Power to forty SWT-3.2-113 turbines to
the Grand Bend wind farm, explains Thrasher.
These turbines are slated to be delivered in October.
“A long-term
commitment to a
procurement target is
something that’s really needed.
While it’s been an exciting ride
so far, it’s to be determined what
we’ll see moving forward.”
- Greg Thrasher,
Siemens Canada
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These new contracts solidify Siemens’ position in
Ontario’s green energy economy. Meanwhile, Siemens is currently supplying SWT-2.3-101 turbines
at the K2 wind project, which remains under construction. Along with the South Kent Wind project
in Chatham-Kent, K2 represents the largest wind
farm in Ontario to date. For K2, Siemens manufactured all 420 49-metre blades, as well as 140 towers.
K2 is on track to begin delivering 270 megawatts
of electricity this spring in order to generate clean
power for approximately 100,000 Ontario homes.
When asked about the upcoming RFP, Thrasher
pointed out that while the draft had yet to be finalized, developers are concerned about the aggressive
timelines being proposed. He is also wary about a
lack of transparency in the transmission market in
terms of where capacity actually exists.
for making community participation and sponsorship a pre-requisite for joining the RFP.
Looking Beyond Ontario
Thrasher is pragmatic about the fact that the FIT
won’t exist forever: “We never anticipated this
mechanism [the FIT] would be in place in perpetuity. We had a very focused strategy on market diversification, and we’re set up to deliver blades where
demand exists.” Recently, he points out, blades
that Siemens manufactured in Tillsonburg were
shipped to Sweden, demonstrating that made-inOntario products can compete at a global level.
Outside Ontario, Thrasher sees a wealth of wind-energy opportunities throughout Canada. Specifically,
Siemens is looking to Alberta, which has “an outstanding wind resource and positive prospects with
the government’s commitment to an alternative renewable energy strategy.” He also notes that British
Columbia “has an enormous wind potential, which
plays very well into the anticipated increase in demand with the natural gas industry picking up.”
Finally, Siemens has become increasingly active
in Québec, another province that boasts an outstanding wind resource. Thrasher notes that Siemens’ first foray into Québec will be supplying at
least 46 3.2 MW direct drive wind turbines for the
147-megawatt Mont Sainte-Marguerite wind project
in Québec.
Thrasher points out that progress on the community engagement front has been slow, perhaps because of “the residue from the FIT program.” By
revoking the authority of the municipalities in the
wind development process, the FIT “fueled antiwind sentiment in some areas,” he says. On the other hand, he applauds the new procurement program
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