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Early 2022 in Ontario was marked by a series of electric vehicle supply chain announcements that accelerated the province’s transformation from laggard to leader in the space of a few months. But some are concerned the province’s electricity supply may not be able to meet increasing EV battery project demand.

More questions than answers surround the fate of a potential LG Chem factory deal in Windsor, but the resulting scrutiny has turned electricity supply into a hot topic in the Ontario election campaign

Early 2022 in Ontario was marked by a series of electric vehicle supply chain announcements that accelerated the province’s transformation from laggard to leader in the space of a few months.

Each announcement — several worth billions of dollars, including two in the Windsor region — brought with it a sense of crashing momentum forward in Canada’s rust belt. That is, until mid-May when Invest in WindsorEssex CEO Stephen MacKenzie told a reporter that the city had missed out on a $2.5-billion EV battery supply plant from LG Chem because it doesn’t have the electricity capacity to support it.

“To be faced with this situation is extremely disappointing,” MacKenzie said, according to a story published by the CBC.

Electric Autonomy Canada reached out to MacKenzie for more information, but was told, “We will not be making any further comments.”

Potent topic

MacKenzie may not be speaking, but many others have. In the heat of a provincial election campaign that ends June 2, the notion that Ontario might lack the electricity infrastructure needed to lock up a major investment in the important EV battery industrial sector, is an understandably potent topic.

Meanwhile, the fate of a plant that had never been mentioned publicly prior to MacKenzie’s comments, remains unclear.

Days after the original news broke, Windsor’s mayor, Drew Dilkins, said at a press conference, “Energy will not be the limiting factor for that facility and I’m thrilled to announce that.”

Dilkins, who was speaking at a campaign stop for Ontario Premier Doug Ford, also went on to say that he expects Windsor will be able to make its bid for the plant to LG Chem in the near future.

For its part, LG Chem — the sister company to LG Energy, which in March committed to a $5-billion battery cell factory in the region with Stellantis that is unaffected by this news as it has already secured its electrical supply — says the 1,000-to-1,500 job plant its planning is not totally out of Windsor’s grasp.

In an email statement cited by CBC in a follow-up story, the company said: “LG Chem is in the process of evaluating potential production sites in North America and Europe as part of its global expansion strategy. No decision has been made at this time and anything to the contrary is speculation.”

Ford’s policies under scrutiny

When Premier Ford was elected in 2018, he subsequently scrapped all of Ontario’s planned renewable energy projects to the tune of $230 million in cancelled contract costs.

In the wake of MacKenzie’s comments about LG Chem, Ford’s political opponents seized on that earlier decision to blame the provincial Conservative Party leader for the alleged electricity shortfall.

In recent days, both provincial NDP party leader Andrea Horwath and Liberal leader Steven Del Duca used campaign stops in Windsor to call out Ford’s moves.

For his part, during this campaign, Ford committed to adding five new hydro transmission projects in southwestern Ontario, with three being fast tracked, he claimed, in order to support the jump in demand. Most hydro projects take between two to four years to complete.

“We will stop at nothing to build the necessary infrastructure just to support these investments,” said Ford during an appearance in Windsor to address concerns that an energy shortage would curb the region’s ambitions.

Quebec a different story

Meanwhile, next door in Quebec, where 2022 has also brought its share of major EV battery supply chain investments and announcements — anchored by the province’s vast 100 per cent renewable electricity supply — the month of May ended in markedly different fashion.

On Friday, South Korea’s Posco Chemicals and General Motors Corp. held a modest press event to mark the finalizing and signing of their previously announced joint venture agreement to establish a cathode active materials processing facility in Bécancour, on the St. Lawrence River near Trois Rivières.

The new venture, called Ultium CAM, comes with a combined investment by the two companies of more than $400 million. While news of the deal was first reported last December, the Bécancour location was only revealed in March.

Last week’s announcement fleshed out a few of the finer points — namely that Posco will hold a majority 85 per cent stake in the venture and the plant will have an annual capacity of 30,000 tons of material.

“The Ultium CAM JV with Posco Chemical supports GM’s rapid scaling of EV production, as we build a more sustainable and more North America-focused supply chain,” said Doug Parks, GM executive vice president of global product development, purchasing and supply chain in a press release.

Bécancour Industrial Park, where the Ultium CAM plant will be located, is touted as one of the most energy-secure points in Canada with the intersection of three hydro-electric networks. Quebec also has some of the cheapest electricity in Canada — another key negotiating advantage, industry experts tell Electric Autonomy.