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Nuclear bids too expensive: Ontario suspends plans

Nuclear Monitor Issue: 
WISE Amsterdam

Canada: the Ontario government is suspending its plans to build the province's first new nuclear reactors in a generation, saying that the competitive bidding process has not provided the province with a “suitable” option that would allow it to proceed with the project. The announcement marks a huge shift in policy for the McGuinty government, which had planned to spend Cdn$26-billion expanding and refurbishing its fleet of reactors.

On June 29, the McGuinty government in Ontario announced that it has suspended the procurement of two new reactors for the Darlington nuclear site. In 2005, the nuclear lobby promised its new reactors designs would be cheap enough to revive the moribund nuclear industry. The June 29, announcement by Ontario Energy Minister George Smitherman that he’s suspending the procurement of new reactors is yet another sign that the so-called nuclear revival is more media spin than reality. 

At his press conference, Ontario Energy Minister Smitherman reportedly said that the bids he received from AREVA, Westinghouse and Canada’s Atomic Energy of Canada Limited were ‘billions’ of dollars too high. In 2005, the Ontario government was told that a new nuclear station beat out the competition at a low cost of Cdn$ 6 billion (US$ 5.2 bn or 3.7 bn Euro). Financial estimates today peg the cost at about Cdn$ 15 billion.

Earlier in June, Greenpeace and 12 more of Canada’s largest environmental organizations asked Ontario Premier Dalton McGuinty to take down this next barrier to expanding green power by replacing Pickering nuclear station with green power when it closes in 2014 – well before any new nuclear plant could ever come online. The Pickering decision will be the next test of where the government is going on green energy.

In an open-letter, the environmental groups also told the Premier that the biggest barrier standing in the way of developing green power in Ontario is his government’s decision to reserve 50 per cent of the electricity grid for nuclear generation, which robs green energy of the space and support it needs to grow.

Ontario has good reason to drop its nuclear plans: the cost of nuclear plants has more than doubled, electricity demand is falling. The McGuinty’s government’s recently passed Green Energy Act could also spur a green energy revolution if the government says ‘no’ to buying new nuclear reactors.

Energy [R]evolution
Greenpeace has produced an Energy [R]evolution scenario for Canada that shows how this country can use current technology to make the transition to clean, renewable energy without coal or nuclear. If implemented, this scenario would dramatically cut Canada’s greenhouse gas emissions.
The scenario shows how Canada can play the role it should in helping to prevent catastrophic climate change. International climate scientists say global greenhouse gas emissions must peak by 2015 and then drop significantly if the world is to avoid catastrophic climate change

The June 29 decision to suspend buying new reactors – even if it is to extort cash from the federal government – is a confirmation that new nuclear plants aren’t economic. New nuclear plants won’t be viable without a massive bailout from the federal government. They should not be built.

Sources: Greenpeace Canada, 29 June and 2 July / Ontario Globe and Mail, 29 June 2009

Contact: Greenpeace Canada, 33 Cecil Street, Toronto, Ontario, M5T 1N1 Canada.
Tel: + 1 416 597-8408

Bids "Shockingly high".

On July 14, more became known about the bids by AECL and Areva. Sources close to the bidding, said that adding two next-generation Candu reactors at Darlington generating station would have cost around Cdn$26 billion. That price tag would wipe out the whole 20-year budget. AECL's Cdn$ 26 bn bid was based on the construction of two 1,200-megawatt Advanced Candu Reactors, working out to Cdn$ 10,800 per kilowatt of power capacity. By comparison, in 2007 the Ontario Power Authority had assumed for planning purposes a price of $2,900 per kilowatt, which works out to about Cdn$7 bn for the Darlington expansion. During Ontario Energy Board hearings last summer, the power authority indicated that anything higher than Cdn$3,600 per kilowatt would be uneconomical compared to alternatives, primarily natural gas.

The bid from France's Areva NP for two 1,600-megawatts EPR's also blew past expectations, sources said. Areva's bid came in at Cdn$ 23.6 bn, with the two reactors costing Cdn$ 7.8 bn and the rest of the plant costing Cdn$ 15.8 bn. "These would be all-in costs, including building a new overpass and highway expansion to get the equipment in" a anonymous source was quoted. It works out to Cdn$ 7,375 per kilowatt, and was based on a similar cost estimate Areva had submitted for a plant proposed in Maryland, U.S.

(1 Cdn$ is 0.62 Euro or 0.87 US$)

The Toronto Star (Canada), 14 July 2009