When Ontario’s Minister of Energy, Stephen Lecce, announced the $12.8 billion refurbishment of Darlington’s four nuclear reactors in Bowmanville was wrapping up slightly under budget at $150 million, and it was four months early; he didn’t say the refit was completed. Translation: the completion will be over-budget and late again, but better than before since the announcement was made early. Why is Ontario still putting billions of dollars in nuclear when the legacy auto industries for which it was built are rapidly shutting down? There are cheaper, safer, better, and more resilient electricity generating options available.
By entrenching nuclear, Ontario is fast-tracking back to the twentieth century, unlike most countries, including the US, that are adopting renewable energy and a decentralized grid with storage capabilities, like selling back to the grid the electricity stored in an electric vehicle, because if you want to modernize your grid at an affordable cost, it comes with renewables.
Recently, Utilize, a US coalition of major tech energy consumers that includes Google and Tesla, along with distributed energy providers, and grid-enabling technology companies has correctly identified the problem with their grids: the Peak Demand model. Higher demand from AI users is increasing the cost of electricity for the average consumer, and is destabilizing the grid.
Recognizing the inflexibility of Peak Demand is nothing new. It’s the same in Ontario. Peak demand needs more than enough electricity for when demand is highest to prevent the peak event snapping the capacity of the system that results in a major power outage. This is especially true for large centralized energy generators like nuclear reactors that need to operate continuously.
The operating model is not perfect, resulting in Ontario selling its large surplus electricity at a loss to New York, Minnesota, and Michigan. Ontario has implemented small measures to lure users away from peak demand times, but it’s a drop in the billion dollar nuclear bucket.
Since nuclear power stations are so costly to build, and also require an extensive grid infrastructure that is also costly, that means nuclear can only be paid for by taxpayers, and for generations. Nuclear energy’s multi-generational payback puts a lid on renewables because the province would be stuck with billions of dollars of stranded assets. That is why nuclear power is locked in at 50%--60% baseline of Ontario’s electricity generation mix, thereby ensuring its dominance, and keeping out competition from renewables. This is likely the real reason why shortly after being elected in 2018, the Ford government cancelled 758 renewable energy contracts, including the White Pines wind farm that was being constructed, at an estimated cost to taxpayers of $231 million.
Ontario has 18 operating commercial nuclear reactors, yet in July 2023 the Ford government embarked on building 4 new and untested small modular reactors (SMR) at the Darlington nuclear station to connect to the grid. The grid infrastructure will likely need to be refurbished, but the cost is unknown.
In addition, Ontario is also looking at building 2 new large-scale nuclear stations. They would be the first in over 30 years because when the existing nuclear stations that were built in the 1970s, their construction costs led to the financial collapse of Ontario Hydro in 1999. Ontario Hydro was left with a debt of $38.1 billion, of which $20.9 billion was stranded debt, or its debt was worth more than its assets. The Harris government then transferred the stranded debt to all captive electricity consumers with a fixed “debt retirement charge” until 2018 when it was removed, but not paid off. When adding the refurbishment completion cost of about $40 billion, and the construction of the SMRs at about $20.9 billion, Ontario taxpayers are already on the hook for generations more.
Undeterred, the government’s website, Powering Ontario, states the larger of of the two new builds is the Ontario Power Generation (OPG) Wesleyville site (Port Hope), and is estimated to generate $235 billion to Ontario’s GDP over the estimated 95 year project life, yet no estimated construction costs are provided. Independent construction estimates are in the range of $250-$300 billion, and counting.
The federal government has rightly commented there is an absence of estimated construction costs; an absence of its impact on ratepayers’ electricity bills over the two or more decades of construction; and as well as the financial impacts on their children and grandchildren. A future seven-generations debt.
The federal government also noted that OPG dismissed the requirement to consider alternatives as stated in Section 22 of the IAAC’s enabling legislation, and didn’t provide any qualifying statements or basis for dismissing this requirement, which was surprising to them in light of the climate crisis, and the emerging generation technologies of choice worldwide are renewables.
Regardless, the Ford government has quietly legislated a new funding model for the new nuclear builds: Start charging electricity ratepayers as the project is being constructed. Elsewhere around the world, consumers are balking at higher electricity bills. In the US and Europe, consumers are buying affordable “balcony solar panels” from IKEA and plugging them into their outlets to reduce their hydro bills.
In Pakistan, the electricity companies are worried they will be left with surplus electricity they are unable to sell since more people are installing their own solar panels. Now, when homes are flooded, solar panels are one of the valuables salvaged. Canadian charitable organizations are providing solar panels and LED lights for rural homes without electricity in Africa because it’s cheap and immediate.
The Ford government is advertising that building new nuclear facilities is how they are protecting Ontario, but that is not the case. Yes, they would provide a lot of job, but there would be more jobs in moving away from nuclear. What Ontario needs is protection from a multi-generational debt, and an environmental mess. Sharolyn Mathieu Vettese President SMV Energy Solutions www.smvholdings.com SMV Energy Solutions provides simple smart solutions that conserve energy