Unpopular Natural Gas Project in Ontario to Be Relocated, Not Cancelled

Ontario’s provincial government has persuaded the owner of an unpopular 280-MW natural gas-fired power plant that was already under construction in the City of Mississauga to relocate the project to an existing power plant site in southwestern Ontario. The agreement settles legal challenges to the government’s proposals to cancel the project.

After nearby residents expressed concerns about ongoing construction at the Greenfield South Power Plant on a 4.5-hectare site just west of Toronto, the Ontario Power Authority (OPA) in November struck an agreement with the Greenfield South Power Corp. to halt construction of the plant.

OPA and the power plant owner on Tuesday reached an agreement to relocate the plant at a total cost of C$180 million to OPA’s Lambton Generating Station site on the Saint Clair River, south of Sarnia. "The new site will take advantage of existing transmission and other infrastructure, as well as the expertise of local workers," Ontario’s Energy Minister Chris Bentley said on Tuesday.

The deal includes C$88 million that will be paid to EIG, the financier of the Greenfield South Power project, on behalf of Greenfield, the OPA and the province. EIG had sued the Ontario government C$300 million when the province proposed to cancel the community-protested plant last fall, shortly before a key provincial election.

"The settlement is necessary in order to relocate the plant and resolves all outstanding legal proceedings," Bentley said. "The total relocation cost also includes all payments made in relation to the original site, including construction costs, design costs, and permitting costs."

Greenfield South says it has a 20-year energy supply agreement with the OPA and the project has been included in the province’s plan to end its use of coal power by 2014. The plant’s major equipment consists of one combustion turbine, one heat recovery steam generator, and one steam turbine. Plant cooling is to be achieved via a wet mechanical draft cooling tower.

Sources: POWERnews, Ontario Ministry of Energy, Greenfield South Power Corp.

—Sonal Patel, Senior Writer (@POWERmagazine)