John Barrett is the president and CEO of the Canadian Nuclear Association, a non-profit organization that represents the nuclear energy industry in Canada.
In an opinion piece published August 25, energy analyst Richard Laszlo wrote that nuclear power was a costly, dying technology. Nothing could be further from the truth.
In Ontario, the average cost of nuclear energy is about seven cents per kilowatt-hour of generation. That’s 41 per cent less than the average residential rate. Only hydroelectricity is cheaper, but marginally so.
Laszlo insists that nuclear power, along with gas generation, accounts for “the lion’s share of price increases.” The reason is that nuclear power makes up most of the province’s supply, at about 60 per cent. Renewables don’t account for increases of the same magnitude because they provide so little of the overall supply. Thus, cutting nuclear out won’t decrease prices. That’s why the Ontario government calculates that keeping the Pickering plant open will actually save $600 million.
Laszlo further claims that Ontario Power Generation has applied to the Ontario Energy Board to raise the price of nuclear power to 16.5 cents per kilowatt-hour. In fact, the OEB’s decision will result in only a small increase to the average monthly residential bill over the next five years. Some of the cost of refurbishing the Darlington plant will be deferred, moderating price spikes. OPG’s submission is for 2017 to 2021. By the latter date, the price of nuclear power would reach nine to 10 cents per kilowatt-hour. OPG has not officially asked for rates beyond 2021, and price projections beyond that date could change.
What OPG charges for nuclear power would peak in 2026 with the completion of Darlington refurbishment. Subsequently nuclear payments would fall annually. Over the full period of operation to 2055 nuclear payments would average eight cents per kilowatt-hour (in 2015 dollars).
In arguing that the province can ditch some of its nuclear facilities, Laszlo notes that Ontario’s energy system often generates extra electricity that must be sold to other jurisdictions at a loss. It’s true that the province sometimes has to sell surplus power, just as it sometimes has to purchase power from other jurisdictions. All power grids buy and sell surplus electricity, and to imply that this is a flaw ignores the realities of power generation and consumption. It’s all but impossible to maintain a perfect balance of supply and demand at all times.
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Laszlo’s vision is to cancel the refurbishment of the four reactors at Darlington (which produce about 15 per cent of Ontario’s electricity), close Pickering’s six reactors immediately (instead of by the planned date of 2024), and replace them, for the time being, with energy from natural gas plants.
This would cause a dramatic increase in Ontario’s greenhouse-gas emissions. Closing down the province’s nuclear facilities would require increased reliance on natural gas further into the future than Laszlo suggests. There is no credible evidence indicating that renewables will be able drastically increase the electricity they generate in an affordable way. Moreover, the fact that renewables can only produce power intermittently (requiring sunshine in the case of solar panels, for example) precludes them from providing the consistent baseload power Ontarians rely on — and nuclear plants provide.
Then there’s the economic impact. A 2015 study by the Conference Board of Canada concluded that the Darlington refurbishment would contribute $15 billion to Ontario’s GDP over the course of the project, with employment increasing by an average of 8,800 jobs between 2014 and 2023.
As for historical cost and scheduling overruns, Laszlo overlooks that the province has built in protections to ensure the Darlington refurbishment is delivered on time and on budget. The government has the right to halt the refurbishment program at certain points in the event of significant overruns. In July, OPG reported that work on the first unit was 30 days ahead of schedule and $40 million under budget.
Nuclear power is the backbone of Ontario’s electricity system. As jurisdictions around the world strive to meet global emissions targets and gear up for the electrification of the transport sector, Ontario needs the affordable, low-carbon energy the nuclear industry offers now more than ever.
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