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Critics pan Alberta nuke plan

The Globe and Mail: Shawn McCarthy - March 19, 2008

OTTAWA -- Bruce Power's ambitious plan to build nuclear reactors in Alberta is unlikely to find the customers it needs in the province's booming oil sands sector, critics say.

Bruce Power filed an application last week to build up to four reactors - at an estimated cost of $10-billion - in northwestern Alberta. The company will be looking to sign long-term power purchase agreements with oil sands producers in order to finance the project, chief executive officer Duncan Hawthorne said in an interview.

But experts on Alberta's power system were quick to slam the proposal as pie-in-the-sky, saying most major oil sands producers generate their own power and that nuclear is ill-suited to Alberta's competitive electricity marketplace.

"There's no obvious market for the output from a nuclear facility in Alberta," Mark Winfield, a York University professor who has studied the province's electricity sector for the lgary-based Pembina Institute, said yesterday.

Mr. Winfield said he believes Bruce Power - a private sector consortium that operates a nuclear site in Ontario - wants to "create a buzz" around the concept of a nuclear enaissance, as Ontario and New Brunswick look to purchase new reactors.

He said oil sands companies produce their own electricity from co-generation plants that create both power and steam, with the latter being used to recover bitumen from in situ projects or to prepare it for upgrading in mining operations.

At the same time, Alberta has a competitive electricity system, unlike Ontario where the government-run Ontario Power Authority is the principal broker of wholesale electricity. As a result, it will be difficult for Bruce Power to win price guarantees and offload construction risks as it has done in Ontario.

"The only way you could do nuclear would be to abandon the market model that Alberta uses for its electricity," Mr. Winfield said.

Greg Stringham, a vice-president with the Canadian Association of Petroleum Producers, said he doesn't see much demand for nuclear- generated power from oil sands producers, which are net producers of electricity.

"They are mostly driven by their steam requirements, which means they end up normally for most of the projects generating an excess amount of power," Mr. Stringham said.

At the same time, most companies that upgrade or refine in the industrial area northeast of Edmonton also generate power from natural-gas-fired co-generation plants.

Bruce Power is also examining the possibility of producing hydrogen from its proposed nuclear site, but Mr. Stringham said there are plenty of eager suppliers for the expected growth in demand for hydrogen, which is used for upgrading bitumen.

Robert Page, a University of Calgary environmental economist and former vice-president of Alberta utility company TransAlta Corp., said there are enough plans for new generation now in the works - excluding nuclear - to create a surplus of power in Alberta. (Bruce Power said there are projections for a 5,000-megawatt shortfall around 2019.)

"Everyone is going to be real cautious on [nuclear] because there is a real potential for surplus power in Alberta," Mr. Page said.

There are plans for new power plants fired by coal and natural gas, as well as a rapidly growing wind power supply, he said. With a potential surplus looming, few buyers will want to lock into the kind of long-term contracts that Bruce will need to back up its financing, Mr. Page said.

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