October 26, 2013
The Power of Water
Ontario Power Generation is asking the Ontario Energy Board for approval to lift $1.5 billion from the pockets of Ontario consumers just to get the ball rolling on re-building its aging Darlington Nuclear Station despite the fact that it doesn’t know what the total cost will be.
One and a half-billion dollars may sound like a lot, but when you have to replace miles of pipes and tubing in a deadly radioactive environment, costs can easily soar into the tens of billions of dollars. In fact, OPG has never been able to finish a project like this on time or on budget and there is little likelihood that will change if it gets the green light for its Darlington project given the sheer complexity of the task. The result will be power that will cost anywhere from 19-37 cents a kilowatt-hour, and that’s without factoring in hidden subsidies like government loan guarantees, radioactive waste disposal, or taxpayers providing liability coverage for an industry that it is too risky to insure.
But there is another option. Instead of rolling the dice on another costly nuclear project, we could import low-cost water power from Quebec. Our neighbours earned an average of 4.1 cents per kilowatt-hour for power they exported in 2012. That’s less than half of OPG’s highly optimistic estimate of the cost of power from rebuilt Darlington reactors.As a consequence, water power from Quebec can reduce our electricity bills by more than $1 billion per year. We have the means to make it happen: Existing transmission lines between Ontario and Quebec can handle enough power to replace 86 per cent of the output of Darlington. And Quebec has plenty of power available for export. Its existing exports, mostly sold through short-term contracts, are equal to 125 per cent of Darlington’s output and Quebec is about to start up two new generating stations that will produce as much power as the Pickering B Nuclear Station.
In fact, Quebec needs Ontario almost as much as Ontario needs Quebec. Cheap shale gas in the United States is leading to a glut of cheap power in its traditional American export markets just as Quebec is increasing its generation capacity by 17 billion kilowatt hours per year. Plus, Quebec has the highest electricity consumption per person in the world. Just by modestly improving its energy efficiency, Quebec can free up millions of additional kilowatt-hours of water power for export at a tidy profit.
Compare that to taking on another nuclear project. Every nuclear project in Ontario’s history has gone massively over budget, on average by 2.5 times. The nuclear industry always claims that “this time it will different” but the recently completed rebuild of the Point Lepreau nuclear station in New Brunswick is now reported to be 2.4 times over budget. That’s not a big improvement.
Meanwhile, new technologies like LED lighting and energy sipping computers, are driving down our electricity consumption despite a growing economy and a growing population.
The Independent Electricity System Operator says electricity usage in Ontario will keep dropping for the foreseeable future, and that is before the Ontario government really even gets rolling with its new “Conservation First” commitment to rapidly improving our energy efficiency to keep pace with our highly productive competitors.
Quebec offers us a flexible, low-cost solution on our doorstep. OPG is offering another debt nightmare — just like the ones that have left Ontario ratepayers and taxpayers still paying down a $20 billion debt from past nuclear projects — for inflexible and high cost power from aging nuclear stations. If our Energy minister is smart, he will hop the first train to Montreal and start talking imports.
Jack Gibbons is chair of the Chair, Ontario Clean Air Alliance.