Despite official hype that electricity from a re-built Darlington Nuclear Station will be a good deal, the truth is that the cost of power from Darlington is just going up and up while the cost of power from renewable and efficiency sources is going down, down, down.
Ontario Power Generation (OPG) claims that electricity from a re-built Darlington Nuclear Station will cost 7.2 to 8.1 cents per kWh (before inevitable cost overruns). That means power from a re-built Darlington will cost anywhere from 30% to 45% more than OPG’s average sales price for nuclear electricity in 2014 (5.6 cents per kWh).
The Darlington deal also explicitly recognizes that once you open up 30-year-old reactors, costs can – and almost certainly will – skyrocket. The new Darlington deal includes a $1.7 billion contingency fund – recognition of just what a high-risk project this truly is. No renewable power, efficiency or water power import deal signed by Ontario includes a giant contingency fund.
The rising cost and inflexibility of nuclear power is not going to help Ontario’s economic competitiveness. Underwriting increasingly costly nuclear power is going to be a tough pill to swallow for major manufacturers like our auto industry. GM’s Oshawa Plant is already on uncertain ground. Will paying for giant nuclear bailouts push it over the edge?
OPG also expects the Ontario government to provide all the financing it needs for the Darlington project at below-market rates. That is $13-$32 billion of government borrowing tied up in one project instead of being used to develop crucially needed infrastructure like transit, roads, schools and hospitals.
Darlington is also no climate saviour. This giant plant has been offline for one in every six hours it has operated since starting up. Gas-fired generation has been used to fill the gap.
It all adds up to a very bad deal for Ontarians, who would be far better served by a long-term deal with Quebec to import low-cost water power. Our neighbour has the lowest cost power in North America. How long before our businesses start to turn their eyes eastward?