Costly new nuclear plant could limit growth of green power in Ontario

Blog - April 7, 2011 - By Cherise Burda

This week, Pembina's Tim Weis gave a testimony at the joint review panel public hearings into the proposed building of a new nuclear power plant on the shores of Lake Ontario.

Last month, when the hearings commenced, some groups called for the hearings to be delayed until after lessons could be learned from the disaster at Fukushima to inform Ontario's decision on the new nuclear plant at Darlington, but the hearing moved ahead nonetheless.

However, Pembina's submission to the Darlington hearings — prepared long before the tragic disaster in Japan — argues against building the new nuclear plant for two key reasons not related to safety: cost, and the implications for Ontario's thriving green energy economy.

The monetary costs of nuclear

We haven't built a nuclear reactor in North America in decades, and so no one really knows what it will cost to build. Given the industry's track record of overpromising and under-delivering, it's difficult to put much credence in its estimates. Recent independent analyses have found that nuclear is in fact among the most expensive energy sources in Ontario.

Nuclear is in fact among the most expensive energy sources in Ontario.

Comparing the combined costs of constructing new facilities plus generation (fuel, etc.) for 20 years, Moody's investment services estimated the cost of a new nuclear plant at about 15 cents per kilowatt-hour, while new small hydro is about 12 cents per kilowatt-hour and new natural gas-fired electricity can cost more than 11 cents per kilowatt-hour. Meanwhile, 13.5 cents per kilowatt-hour is being paid for wind power under the Green Energy Act.

What's important to keep in mind is that the estimate for nuclear assumes the reactors are built on time and on budget - something that has never happened in Ontario. In fact, our hydro bills still include an expense line item for the stranded debt for over-budget nuclear reactors built over three decades ago.

As for the new Darlington reactors, since 2005 the estimated cost for the reactors has more than tripled, without a shovel in the ground, to the point where the Ontario government in 2009 suspended the decision to purchase the reactors due to expense.

cost of nuclear in Ontario

The nuclear ceiling

The Green Energy Actprovides an excellent foundation for Ontario's energy future, enabling clean and safe green energy to be developed and potentially creating 90,000 jobs in Ontario. However, Ontario's own ambitions to build a thriving green energy economy may be thwarted by its own mandate to build nuclear reactors. This because there is limited space on the electricity grid, and new green sources will be limited as soon as large-capacity nuclear facilities are built. You can witness this in Ontario's new long-term energy plan, where the development of renewables appears to flat-line in 2018, the date originally anticipated for the new Darlington stations to come online (a deadline that will not now be met).

The way forward is through a nimble, flexible, sustainable and cost-effective energy system

Developing new nuclear capacity effectively places a ceiling on the growth of green energy for decades to come. As actual electricity demand has continued to drop in Ontario, even after economic recovery, there will be even smaller pieces of the grid pie to go around.

This month, a CBC special report called energy megaprojects a "dying breed." The way forward is through a nimble, flexible, sustainable and cost-effective energy system. Ontario's Green Energy Act is Canada's most important step in this direction to date, but its long-term success may hinge on the decisions about the future of nuclear power in Ontario that are being made as we speak.

Tags: 

Cherise Burda

Cherise Burda is Ontario director at the Pembina Institute, directing research and implementation strategies for transportation and renewable energy solutions, including policy initiatives for urban form.


Subscribe

Our perspectives to your inbox.