The Toronto Star
March 20, 2012
John Spears

Nuclear power too costly, Ontario Clean Air Alliance argues

Abandoning nuclear power in favour of imported electricity from Quebec and new, high-efficiency natural gas plants, would save Ontario billions, says the Ontario Clean Air Alliance.

The money saved could be spent on health, education or other provincial programs, the alliance argues in a new report.

The Liberal government’s long term energy plan calls for the province to continue getting half its power from nuclear until 2030.

Plans call for two new reactors at Darlington. Massive overhauls of Darlington’s four existing reactors, and four reactors at the Bruce B station are also part of the plan. Nuclear spending would total $33 billion over 20 years.

That’s a mistake, the alliance argues in a report released Tuesday.

Under the best-case outlook, new nuclear units would produce power at 8 cents a kilowatt hour, it says

But given the history of cost over-runs on nuclear projects an actual cost of 19 cents or higher is more likely, it argues. (Moody’s, the credit rating service, projects costs of 15 cents or higher, it notes.)

What’s the alternative? The alliance says other sources are much cheaper.

Imported hydro power:

Quebec signed a deal to sell electricity to Vermont for 5.8 cents a kilowatt hour, the report notes.

“Pursuant to the National Energy Board Act, Hydro Quebec must give Ontario an opportunity to purchase electricity on terms and conditions as favorable as its export sale,” it says.

Ontario, which now gets only 1.8 per cent of its power from Quebec, could boost that to 17 per cent without expanding transmission links, the report says.

Conservation and efficiency:

Ontario also has plenty of room to reduce its consumption, it argues: Ontario uses 27 per cent more power per capita than neighbouring New York.

And boosting efficiency is cheap. It costs about less than 5 cents a kilowatt hour to save power, which is cheaper than any form of new generation.

Ontario’s local utilities could drive down consumption by financing energy-saving home retrofits and the purchase of high-efficiency air conditioners, alliance chairman Jack Gibbons said in an interview.

They could also place more devices that switch off home air conditioners for short periods when peak demand is straining the system. About 10 per cent of home now have them; 50 per cent would be a better goal.

Combined heat and power plants:

These plants – which generally use waste heat to produce steam for industrial use – can also be expanded, the report argues. That costs about 6 cents a kilowatt hour.

The cost of filling half of Ontario’s energy needs through imported power from Quebec, plus combined heat and power plants and efficiency would be $3.7 billion a year, the report calculates.

Meanwhile, the annual cost of the same amount of power from nuclear units, even at 8 cents a kwh, would be $5.4 billion.

Gibbons argues that a non-nuclear strategy is also lower risk. The risks of mega-projects like nuclear stations going over budget are well known.

Long-term, fixed price contracts for imported power are very low risk, he said: “Hydro Quebec is a very reliable supplier.”

Pursuing a multitude of smaller scale generation and efficiency projects is also lower risk than nuclear mega-projects he said.

Ontario has another quick source of money, the report argues, which is shutting down last units of the Nanticoke and Lambton coal stations immediately. They’re due to shut down in 2014.

Ontario Power Generation has kept some units running at a loss, because they were needed for technical reasons to balance the grid. But the report argues that equipment put in place by Hydro One has now eliminated that need.

That would save a subsidy of $367 million a year that OPG is now receiving to keep coal units available.