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New reactors to be pricey, McGuinty warns:

TheStar.com - Canada - New reactors to be pricey, McGuinty warns

Queen's Park Bureau: Rob Ferguson - June 12, 2008

Premier won't put figure on `expensive proposition' but Hampton forecasts big hikes to pay for plans.

Ontarians should brace themselves for sticker shock when they see the price of new nuclear reactors, Premier Dalton McGuinty suggests.

While the province's electricity supply plan estimates the cost of new and refurbished reactors at $26.3 billion over the next 20 years, there's no way of pinpointing the new reactor cost.

"It's an expensive proposition, there's no doubt about that," said McGuinty, whose government will reveal this month if a new nuclear power plant will be built at Darlington or at the Bruce nuclear station.

"It's really hard to nail down precise costs today given ... we don't know what's going to happen to so many of the costs of so many of the inputs."

A recent analysis by Massachusetts-based Cambridge Energy Research Associates Inc. found the cost of building nuclear power plants has, since 2000, risen 173 per cent. Countries are turning to nuclear-generated electricity in a bid to cut greenhouse gas emissions that contribute to global warming.

That trend has pushed up the price of nuclear plant parts and labour, with some components in such demand that suppliers have a backlog of several years for delivery.

McGuinty's warning means Ontario residents should hold on to their wallets, said NDP Leader Howard Hampton.

"I think the McGuinty government has underestimated the cost of their big nuclear scheme," he told reporters.

"I think it's going to be double what they originally said it was and that will mean huge increases in hydroelectricity rates and it will make it even more difficult for manufacturers to stay in the province."

The premier wants nuclear plants to remain the source of half of Ontario's electricity in coming decades. Heavily polluting coal plants, which contribute to deadly smog, are slated to close in 2014.

"We are determined to keep costs down as much as we can" for the new nuclear plant, said McGuinty.

Experts have estimated new plants can cost $8 billion to $15 billion, depending on size.

The government is looking at a two-reactor plant with a total generating capacity of between 2,000 and 3,500 megawatts.

Ontario's nuclear power plants are notorious for cost overruns in both construction and refurbishment. The current upgrading of two reactors at the Bruce station is running $350 million over budget.

Choosing a new nuclear site at the existing Darlington or Bruce nuclear stations will help the three bidders for the new plant nail down their cost estimates as the government decides on a winning bidder by the end of the year, said Energy Minister Gerry Phillips.

Three companies are bidding for the massive job Atomic Energy of Canada Ltd., Westinghouse Electric and Areva of France, the world's largest nuclear reactor company.

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