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Soaring nuclear costs make green option more attractive

TheStar.com: Cherise Burda - July 15, 2009

Back in 2005, the Ontario Power Authority began drafting the province's long-term electricity plan on the assumption that nuclear costs would be low and electricity demand would be high.

Four years later, nuclear costs have nearly tripled and electricity demand is dropping, not growing as was assumed when the province decided it needed additional nuclear plants. Last year, the OPA admitted that nuclear had exceeded the threshold where it is no longer a cost-effective energy option.

Already the province is paying companies on both sides of the border to consume surplus electricity because it cannot turn its nuclear reactors down fast enough. Ontario's Independent Electricity System Operator predicts that demand will continue to drop even after the economy recovers and warns that continued excess nuclear inflexibility will cause system instability.

Thus, the Ontario government made a wise decision when it suspended the purchase of two new nuclear reactors to be built at Darlington. Yet the province and the nuclear industry maintain that these new reactors are needed to keep the lights on and ensure the phase-out of coal, and the public is being cornered into two unpalatable choices - either the Ontario ratepayer or the Canadian taxpayer has to bail out the nuclear industry.

This is a costly distraction from what the real solutions are.

To build a sustainable energy economy and guarantee the phase-out of coal in 2014, we need cost-effective and flexible energy options that can be deployed quickly, not new nuclear plants that take at least a decade to build.

Renewable energy projects can be active in as little as two to three years, and there are dozens of projects that are already shovel-ready. And if the new Darlington plants are actually built by 2018, it will be long after the coal plants have shut down.

Green energy has the potential to generate 90,000 jobs in Ontario, according to a 2009 study by the Green Energy Act Alliance and the United Steelworkers. That's more than the nuclear industry provides in all of Canada.

The 85,000 Americans currently working in wind energy already outnumber coal miners in the U.S., the world's largest wind energy market. Globally, wind energy is expected to be a $1 trillion industry by 2020. Green energy is an economic stimulus, not a drain on public coffers.

Ontario took leadership in North America by passing the Green Energy Act this year. However, without dedicated space on the grid for the growth of green energy in Ontario, the province risks falling behind in the global new energy economy; investors will go elsewhere.

Green energy development in Ontario is being squeezed out by the province's overcommitment to nuclear energy (more than 50 per cent of the supply mix). By comparison, Ontario's current electricity plan limits the growth of new renewables to less than 8 per cent of the province's electricity supply mix for 20 years.

Fortunately, an elegant solution exists. Pickering B is the first station in Ontario's aging nuclear fleet to reach its end of operational life, and this year the province must decide how to replace Pickering B when its reactors start retiring in 2013.

Despite claiming green energy is a priority, the Ontario government has so far only considered rebuilding Pickering B or replacing it with new reactors. A better option is to replace Pickering B with green energy. A survey done this year by the OPA found more than 15,000 megawatts of renewable energy projects already in the planning or development phase right now - nearly triple what the current electricity plan calls for in 20 years. And this doesn't include the massive potential for other green power sources beyond just renewables.

A recent report by the Pembina Institute shows how Pickering B's 2,000 megawatts of baseload generation can be replaced with a carefully planned portfolio of clean energy technologies, renewable energy, conservation and energy efficiency. Two recent studies show that such a portfolio would be more cost effective than either rebuilding the old station or replacing it with new reactors.

The province should suspend the decision to purchase expensive new reactors for three years until the next review of the province's electricity plan. At that time we will know better where costs, demand and the economy are headed.

For now, replacing Pickering with green energy is the best opportunity to open up much needed grid space, and it would provide the Green Energy Act with the time, space and investment focus it needs to produce results.

Cherise Burda is the Ontario policy director with the Pembina Institute.