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Ontario to build Darlington reactors by 2018: Critics accuse government of low-balling estimated $26-billion cost for nuclear upgrades

The Globe And Mail: Karen Howlett - June 17, 2008

TORONTO -- The Ontario government says two new nuclear reactors will be up and running by July, 2018, as part of its ambitious plan to spend $26- billion expanding and refurbishing its fleet to meet the province's electricity needs over the next two decades.

But nuclear critics and opposition MPPs said yesterday that the government is low-balling the price, which they said can only go up as the cost of raw materials and labour continues to escalate. They also said there is little likelihood the reactors can be built in just a decade, given the province's dismal track record for meeting deadlines and the delays plaguing nuclear projects in other countries.

"They seem pretty intent on falling down this slippery slope of cost overruns and delays, which we've seen in the past," said Greenpeace energy campaigner Shawn-Patrick Stensil.

Energy Minister Gerry Phillips announced yesterday that the government has chosen the Darlington nuclear station as the site where it will build the province's first new reactors in more than two decades. The station in Clarington, a fast-growing community about 80 kilometres east of Toronto, already has four nuclear reactors operated by Crown-owned Ontario Power Generation. There is strong community support for the project.

Mr. Phillips refused to say yesterday whether the $26-billion cost estimate - initially made last August - is out of date. He said he will have a better idea later this year when he sees the bids from three companies competing to build the reactors. Atomic Energy of Canada Ltd., France's Areva SA and Westinghouse Electric Co. have until Oct. 1 to submit bids.

"I think the public expects that we are going to, on their behalf, get the best possible deal," Mr. Phillips told reporters.

New Democratic Party MPP Peter Tabuns, a nuclear opponent, pointed to the province's unhappy experience with building the Darlington nuclear station.

The project was supposed to cost $5-billion when it was approved in 1978. But by the time the reactors went online in 1992, the cost had reached $14.3- billion. Electricity consumers have been on the hook for those overruns.

"I think it's entirely reasonable to say the cost [for the new reactors] will come in double," Mr. Tabuns told reporters yesterday.

Mr. Phillips said many of the mistakes made with Darlington will be avoided this time. He blamed much of the cost overruns on a succession of governments stopping and restarting the project.

But nuclear opponents said the McGuinty government's experience with cost overruns for refurbishing reactors at a privately operated nuclear station calls into question its nuclear plan.

Bruce Power, the privately owned consortium that operates the nuclear station on Lake Huron, initially estimated that the cost of getting two idled reactors up and running would be $2.5-billion. It now says the cost will be more than $3.5-billion.

Progressive Conservative MPP John Yakabuski, the party's energy critic, said the government is dragging its feet.

"This government diddled for four years," he told reporters. As a result, he said, the project will end up costing a lot more.

Ontario has 16 nuclear reactors that generate a total of 11,400 megawatts of electricity, about half the province's supply.

The government plans to build new reactors and refurbish existing ones to maintain nuclear power's share of the province's overall electricity production.

Mr. Phillips said the Darlington project will create about 3,500 engineering and construction jobs.

ONTARIO'S NUCLEAR FUTURE: THREE COMPANIES IN COMPETITION

ATOMIC ENERGY OF CANADA LTD.

Owner: The Canadian government.

Technology: AECL is completing design work on its Advanced CANDU Reactor, known as the ACR-1000, which uses heavy-water technology. The company hopes to sell the new model in New Brunswick and internationally as well as in Ontario. AECL got a boost earlier this year when the federal nuclear-safety regulator - under new leadership - agreed to conduct a prelicensing design review of the ACR-1000.

Current projects: The company is involved in refurbishing its CANDU reactors at Point Lepreau, N.B., and at the Bruce Nuclear Station on Lake Huron in Ontario. AECL has 30 CANDU

reactors in operation worldwide. The last new reactor it built was in Romania, where a CANDU 6 went online in September of 2007.

AREVA GROUP

Owner: The French government has an 85-per-cent interest. The balance is publicly held.

Technology: The EPR, Areva's third-generation, pressurized-water design, generates about 1,600 megawatts of electricity and features enhanced safety and simplified operations and maintenance. It also has a projected service life of 60 years, compared with a 40-year life cycle for other reactors. Areva has built 98 reactors worldwide, including 58 in France.

Current projects: Areva is building the EPR in France and Finland and two reactors in China.

WESTINGHOUSE ELECTRIC CO. LLC

Owner: Toshiba Corp. of Japan, with a 77-per-cent interest, leads this consortium.

Technology: About one half of the 440 nuclear power plants operating worldwide are based on Westinghouse technology. Westinghouse says its AP1000 is the safest and most economical nuclear power plant available in the global commercial marketplace, and is the only third-generation reactor whose design has been certified by nuclear regulators in the United States.

Current projects: Westinghouse is building four new nuclear power plants in China. These will be the first to use its AP1000 pressurized-water technology. The company also recently signed two contracts with electricity utilities in the United States to build another four reactors.

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