Ontario approves start of $12.8-billion upgrade to Darlington nuclear reactors

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The Ontario government has approved the start of a $12.8-billion refurbishment of the Darlington Nuclear Generating Station and pushed off the closing date of the Pickering nuclear plant until 2024.

The announcement on Monday comes a month after the province signed a deal with Bruce Power for a $13-billion refurbishment. Taken together, these moves lay out the future of Ontario's nuclear power fleet, the single-largest source of electricity in Canada's most populous province.

The plans come at the end of a vigorous debate within Premier Kathleen Wynne's government, sources with knowledge of the deliberations said. The Premier, they said, wanted to explore other options, including importing hydroelectric power, before committing to long-term and costly nuclear plants.

The end result was something of a compromise. Refurbishment of one Darlington reactor will start in the fall, but the government will have to sign off individually on each following reactor to be refurbished. This gives the province the option to stop refurbishment in the future if it finds a different source of electricity instead.

"We have … options open should we not continue with refurbishment, or alternatively should we want to go in a different direction," Energy Minister Bob Chiarelli said Monday at Darlington, standing in front of a scale model of a nuclear reactor used for training the power workers who will carry out the refurbishment.

"If there are cheaper, more efficient ways of generation of electricity because of innovation or changes in the sector, we would have the discretion to move off in that particular case."

The escape hatches are also designed to allow the province to abandon the plan in the event of cost overruns, which persistently plagued Ontario nuclear projects in the 1980s and 90s.

But Ontario Power Generation president Jeff Lyash vowed that this time, the job would be done right. He said Darlington staff have been practising for the refurbishment and so will know exactly what to do when they start the work.

"OPG, with our support team, will get the job done on budget, it will get the job done safely and it will get the job done on time," he said.

Refurbishing all four Darlington reactors is expected to take 10 years. OPG will receive up to 8.1 cents a kilowatt hour, lower than the current average of 9.2 cents, to cover the cost of refurbishment. The plant, on the shores of Lake Ontario, 70 kilometres east of Toronto, provides 20 per cent of the province's power. The first stage of the refurbishment will be carried out by SNC-Lavalin Group Inc. and Aecon Group Inc. The companies received a joint $2.75-billion contract for the work. Pickering, initially slated to close in 2020, will now stay open until 2024 to help backstop Darlington during the refurbishment.

Darlington and Pickering are run by the government-owned OPG. The Bruce Nuclear Generating Station is leased to a private company.

Ms. Wynne said nuclear will remain the foundation of power generation in Ontario, but the Darlington plan will allow the government to reassess in future.

"The off-ramps are very responsible. It's a really prudent approach because, if conditions change, if there are different circumstances, then we have that opportunity to make a change," she said earlier in the day at Queen's Park.

Mr. Chiarelli acknowledged the government considered hydroelectric imports from Quebec, Newfoundland and Labrador and Manitoba, but decided these would not be enough to replace nuclear power. Ontario currently imports 500 megawatts from Quebec to meet peak summer demand, but would require 10 times that year-round to start replacing nuclear plants. Such a quantity would mean building more hydro plants and transmission lines in Quebec.

"Long-term, permanent power from Quebec, it's not affordable because the amount of infrastructure required makes it absolutely prohibitive to move forward," he said.

With a report from The Canadian Press