CLICK FOR NEWS UPDATES
CLICK FOR
NEWS UPDATES


OPG earnings take a hit, Pickering outages contribute to problem

Torstar Network, Aug 18, 2007

http://newsdurhamregion.com/news/business/article/84610

Several unexpected outages at Pickering nuclear station contributed to a 13 per cent decrease in Ontario Power Generation's second-quarter profits and triggered a heavier reliance on coal-fired power, the company said yesterday.

Profit for the three months ended June 30 was $125 million, down from $143 million in the same period a year ago. A 23 per cent increase in fuel and maintenance costs also contributed to lower profits.

Chief operating officer Pierre Charlebois said the increased use of fossil-fuel generation a jump of nearly 20 per cent compared with the same period a year earlier will lead to a proportional increase in greenhouse gas emissions.

The company said the poor performance at Pickering was partially offset by "near historically high" performance from OPG's Darlington nuclear station and its hydroelectric stations.

But the string of outages at Pickering comes at a sensitive time for Premier Dalton McGuinty, who wants to rejuvenate and expand the province's nuclear fleet to help wean the province from coal-fired power and associated emissions. With an election two months away, emissions from coal are back on the rise and several nuclear reactors have proven unreliable. Had the summer been hotter, experts say, the reactor outages could have left Ontario in a difficult power squeeze.

"In theory Premier McGuinty's plan is already out the window," said Dan McDermott with the Sierra Club of Canada.

Pickering A, the oldest of Ontario's generators, has been a particular trouble spot. Reactor units 2 and 3 were mothballed in 2005, but units 1 and 4 were refurbished in 2005 and 2003, respectively, at a cost of $2 billion. In early June both units were taken offline for unplanned maintenance on a backup system and aren't expected to be back in service until early September.

OPG reported yesterday that during the second quarter Pickering A's capacity factor that is, electricity generated during the period as a percentage of potential output was 61.6 per cent, down dramatically from 84.3 per cent a year ago.

The much younger Darlington station, by comparison, had a capacity factor of 84.4 per cent during the quarter.

The fact that both Pickering A units will be down for the rest of the summer likely means continuing reliance on coal plants and increased emissions during OPG's third quarter.

British Energy, the operator of nuclear stations in the United Kingdom, has experienced similar problems. The energy company reported Thursday that its operating profits fell 22 per cent in the quarter because of unexpected reactor outages.

McDermott said the problems at Pickering A should be a warning sign as Ontario moves forward on its nuclear strategy and considers refurbishments at Pickering B.

"We got taken to the cleaners and we got taken knowing that we were going to be," he said. "I fear that the people who are in charge of our electricity system the nuclear priesthood are committed to the same course of action no matter what the available evidence is."

Charlebois said Pickering A is a different station built at a different time in history than Pickering B. "Therefore its performance would be less relevant in terms of what the Pickering B program should be."

He said the performance of Pickering A was strong in 2006 but this year was "not as high as we want it to be."

The current outages are a "one-time issue" that will not impact future performance, he added. "We expect it will continue to be a solid performer as we go down the road."

But the summer outages go beyond Pickering A. An 822-megawatt reactor at Bruce Power was unexpectedly shut down Thursday and won't be back online until later in the month.

Pickering Unit 5, which was out for three months between April and June and briefly in mid-July, was taken offline again for nearly a week this month because algae was blocking a water-intake system used for cooling. Unit 8, meanwhile, was powered down on Wednesday for a "brief" fix of a leaky valve.

As of yesterday evening, 2,300 megawatts of nuclear capacity or 20 per cent of Ontario's nuclear reactor fleet was offline for unplanned maintenance.

<< Back to Previous Page