Two nuclear companies are submitting competing bids to sell Ontario two reactors as the province struggles to decide how best to provide cheap, clean, reliable power over the next 20 years.
Pittsburgh’s Westinghouse Electric Co. LLC and Mississauga-based Candu Energy Inc. are to provide their proposals Friday outlining their designs, prices and the economic benefits that would flow if they won a contract that would top $10-billion. Ontario Power Generation had set a June 30 deadline for the proposals.
Plagued by concerns about high capital costs and safety issues, the nuclear industry faces a tough challenge in persuading the Ontario government to invest in new reactors.
But proponents argue they can beat renewable power on reliability and price and natural gas on economic benefits to the province. They also point out that nuclear power plants emit no greenhouse gases.
“The only base-load source of generation that does not emit greenhouse gases is a nuclear power plant,” Westinghouse CEO Danny Roderick said in an interview during a visit to Toronto on Thursday.
He noted his company has more than 40 suppliers in Ontario that would benefit directly from a new reactor project.
“Nuclear provides energy security, economic security and environmental security,” he said.
The nuclear bids come as Premier Kathleen Wynne is revisiting a controversial energy strategy embraced by her predecessor, Dalton McGuinty. The Liberal government has been battered by the cancellation of two gas-fired plants that resulted in huge penalties. Last week Ms. Wynne scaled back a wind-energy contract with Samsung and faces political opposition to the placement of wind turbines and transmission lines.
Energy Minister Bob Chiarelli – who last month appeared to question the need for new reactors – said the province is now reviewing its long-term energy plan and remains committed to a “diversified and balanced supply mix.”
“No decisions have been made,” he said in an e-mailed statement.
The government’s previous plan committed to maintaining nuclear power at 50 per cent of the province’s electricity capacity. At that rate, and with the planned closing of the Pickering nuclear station in 2020, new reactors would be required within a decade unless power demand is reduced dramatically.
However, the province’s demand for electricity has fallen 10 per cent since 2005 as a result of energy-efficiency efforts and the loss of manufacturing and other industrial customers.
Candu Energy – formerly Atomic Energy of Canada Ltd. and now owned by SNC-Lavalin Group Inc. – refused to comment on its proposal. AECL saw a previous bid collapse four years ago when then-minister George Smitherman pulled the plug, saying the cost was “billions” more than the province wanted to pay.
The Canadian nuclear flag-bearer has not sold a new reactor in 20 years.
Westinghouse is building four newly designed AP1000 reactors in China and four at two separate sites in the United States. It will mount stiff competition to Candu Energy, which is offering an enhanced version of its smaller Candu 6 workhorse.
In its proposal, Westinghouse – which is owned by Japan’s Toshiba – argues that the construction and operation of two 1,000-megawatt reactors would generate greater benefits to the province than constructing new gas plants or importing electricity from Quebec and would be competitive with natural-gas-fired power.
Westinghouse estimates that every $1 spent on the new reactors would generate $1.98 in the province’s economy and $15-billion more in economic activity than investment in similar-sized gas-fired plants. That’s because nuclear has more upfront costs – with a large number of suppliers in Ontario – while gas plants cost less to build but more to operate, with the imported gas being the largest single cost.
But the nuclear industry has faced new scrutiny since the 2011 meltdown at Japan’s Fukushima nuclear plant caused by an earthquake and tsunami. And the industry is still searching for a permanent solution to store its highly radioactive waste.
Critics question whether the new reactors will ever be needed.
“The reality is that electricity demand in Ontario is falling,” said Mark Winfield, an environmental studies professor at York University. He said nuclear represents yesterday’s technology – a large, centralized generation source that requires long lead times and lots of upfront capital.
Ontario Power Generation would operate the new reactors, which would be built at its Darlington site, where OPG currently has four Candus that supply 20 per cent of the province’s power.
OPG vice-president Jacquie Hoornweg said nuclear represents a critical piece of Ontario’s electricity puzzle and has the support of residents around Darlington – a valuable benefit in an age of NIMBYism.
“Nuclear is a large load, GHG-free, very predictable producer of electricity,” she said.