Samsung Begins Green Push with Ontario Deal

Samsung and Korea Electric Power Corp. will invest $6.6 billion into wind and solar projects in Ontario, the opening salvo in the conglomerate's plan to be one of the biggest names in green.

Under the deal, Samsung and KEP will build and maintain power plants as well as erect four new factories in North America for making the equipment for the power plants. The four new plants will employ 1,440 and building and maintaining the power plant will keep 16,000 busy. (Most of the jobs associated with the power plant, however, will likely revolve around construction and thus will be somewhat temporary.)

The 2.5 gigawatts of renewable capacity that will be planted in the ground through the Korean companies triple renewable capacity in Ontario.  

Like Panasonic and LG, Samsung hopes to translate its expertise in electronics, deep financial pocket, and manufacturing heft into a leading role in building management systems, energy efficient electronics and solar power. Solar panels, after all, consist of semiconductors. The overlap in manufacturing equipment and know-how is substantial and there are few companies in the world that understand LCD manufacturing better than Samsung. It has been the number one producer for years. (ex-Samsung exes at Telio Solar say that they can produce copper indium gallium selenide, or CIGS, solar cells on equipment that's essentially 67 percent identical to the machines employed for LCD TVs today.)

Besides technical capabilities, Samsung is also known for an aggressive, adaptable corporate culture that has learned to market and design products for a global market. Ten years ago, it was a more marginal brand.

Samsung has already stated a public goal of becoming number one in solar in 2015. Right now, Samsung is a barely an asterisk. Wind? It sounds like Samsung just added on a new division.

The company has already laid out an ambitious carbon reduction plan. It wants to reduce greenhouse gas emissions from both its operations and from the use of its products by 50 percent by 2013 on a normalized sales basis. In 2008, Samsung and its products emitted 9.4 million tons of greenhouse gases with about 60 percent of the emissions coming indirectly through products. By 2010, greenhouse gases will be down 45 percent from 2001. By the end of the year, it wants to reduce standby power on all of its electronics to 1 watt.

The deal also accelerates Ontario's green plan. Although it's the industrial heartland of Canada, the province also has some of the most aggressive green goals in the nation. It has enacted a wide-ranging set of environmental policies, including a goal of getting rid of all coal-burning power plants by 2014. This past May, Parliament enacted the Green Energy and Green Economy Act, which includes a German-style feed-in tariff and incentives to lure solar manufacturers to the area.

"We've got some large energy users," Sandra Pupatello, an Ontario Parliament member and Minister of International Trade and Investment, told us last year. "If Ontario can do this with its industrial base, any jurisdiction can do it."