Ontario Announces Continuation of Offshore Wind Turbine Moratorium
Ontario announced earlier this week that it would be extending its moratorium on offshore wind turbine projects. The province had initially announced the moratorium back in 2011.
The government has indicated that it requires further research before authorizing the development of off-shore wind farms. Since the moratorium was put in place, five studies have been commissioned, with the last two being publicly released in December. No further studies have been commissioned. The province appears to be waiting until the impacts of the first off-shore wind project in the Great Lakes—which has been approved by Ohio and will be located in Lake Erie—are known.
The province has faced two lawsuits as a result of the initial moratorium. US company Windstream Energy successfully sued the province under Chapter 11 of NAFTA, and a tribunal awarded the company $25 million in damages plus $3 million in legal costs. The company had planned to build a wind farm in Lake Ontario.
The tribunal found that the province had breach its duty, under article 1105 of NAFTA, to provide Windstream with fair and equitable treatment. The moratorium was based to some extent upon a lack of certainty as to the environmental impacts of off-shore wind projects. However, the NAFTA tribunal found the moratorium was also inspired by provincial concerns over the impact of the project on electricity prices and a desire to appease public opponents to such projects in light of an impending election. The province had also failed to take necessary measures within a reasonable time after the moratorium was imposed to clarify the regulatory and contractual uncertainty that Windstream was facing in the development of its project.
The province has also been sued by Trillium Power Wind, a Canadian company, in relation to an offshore wind project it had planned in Lake Ontario. The province’s announcement of the moratorium occurred only minutes before financing for Trillium’s project was scheduled to close. Trilliums suit alleges misfeasance in public office and seeks $500 million in damages. A related criminal investigation is also currently underway, as Trillium has alleged that government officials destroyed relevant documents upon the initiation of the lawsuit.