Globe and Mail
October 31, 2013
Adam Radwanski

Scaling back nuclear power a tempting option for cost-conscious Ontario Liberals

Homeowners are angry about skyrocketing hydro bills. Manufacturers warn that uncompetitive industrial rates could cause them to take their business elsewhere. And blame is landing squarely on a government under fire for spending $1-billion to relocate gas plants, and more than that for new wind and solar power that might not really have been needed.

In short, Bob Chiarelli will have an obvious imperative when he delivers Ontario’s long-term energy plan before the end of this year. One way or another, the provincial Energy Minister needs to show cost containment somewhere on the horizon.

There’s not much Mr. Chiarelli can do now about the gas, wind and solar costs, most of which are locked in. But within the energy sector, there is chatter that he is grappling with one very contentious option: further scaling back the province’s spending on nuclear power.

Already, it has been revealed that the province will not proceed with long-standing plans to build two new nuclear reactors at the Darlington generating station. Now, amid whispers that the long-term plan will show nuclear’s share of the energy supply mix shrinking to somewhere between 40 and 45 per cent from 56 per cent, the question is whether the province will ramp down plans to invest in existing reactors as well.

While such a move would likely be attributed to a focus on conservation, it would mostly be reflective of decreased demand caused by slower-than-expected recovery from recession. The province currently has a big surplus of power, with many gas plants sitting idle – and that’s before two new such plants and a whole lot of wind power come online in the next few years.

The lack of demand helps explain why some within the sector are arguing that the province should scrap plans to keep its aging reactors at the Pickering generating station open until 2020. Doing so, they contend, would save hundreds of millions of dollars in life-extension and surplus generation costs.

That, however, would also require Mr. Chiarelli to delay plans for refurbishments at both of the province’s other nuclear plants – Darlington and Bruce – starting around 2016. That’s because part of the reason Pickering is supposed to stay operational until 2020 is to make up for lost generation while some Darlington and Bruce reactors are taken offline. Even with decreased demand, it would be enormously risky to reduce output at all three nuclear stations at once.

While Mr. Chiarelli has been unequivocal that the refurbishments will happen at some point, slowing one of them would have the added advantage of helping put off some more costs. But both the publicly owned Ontario Power Generation (which operates Darlington) and the privately owned Bruce Power are currently arguing that their refurbishments are of the highest priority. Mr. Chiarelli has to take into account warnings that without prompt refurbishments the reactors could face untimely closings.

He also has to consider the potential impact on a nuclear sector that is already struggling mightily. Between shutting Pickering early and delaying one of the refurbishments, a government that has identified jobs as its highest priority would be taking away thousands of them.

Those caveats, not to mention worry of low-balling demand and getting caught without enough supply at peak times, could well be enough incentive to stay the course. But for a government under siege, hastening Ontario’s decreased reliance on nuclear could offer savings that are hard to resist.