Ontario suspends nuclear power plans

Toronto — Globe and Mail Update: Karen Howlett - June 29, 2009

See also: Reactor design puts safety into question

The Ontario government is suspending its plans to build the province's first new nuclear reactors in a generation, citing concerns about cost overruns and uncertainty surrounding the future of Crown-owned Atomic Energy of Canada Ltd.

George Smitherman, Minister of Energy and Infrastructure, announced today that the competitive bidding process has not provided the province with a “suitable” option that would allow it to proceed with the project. However, he stressed the decision does not mean the province is abandoning its commitment to nuclear energy.

“Emission-free nuclear power remains a crucial aspect of Ontario's supply mix,” Mr. Smitherman said.

The move marks a huge shift in policy for Premier Dalton McGuinty's government, which had been planning to spend $26-billion expanding and refurbishing its fleet of nuclear reactors to meet the province's electricity needs over the next two decades.

AECL was competing against two global players to build the reactors: France's Areva SA and Westinghouse Electric Co. Mr. Smitherman today said AECL was the only company that submitted a bid that complied with the terms and objectives set out by the government.

“However, concern about pricing and uncertainty regarding the company's future prevented Ontario from continuing with the procurement at this time,” he said.

The Globe and Mail reported last month that the government had selected AECL as the leading bidder to build the reactors but it wanted assurances that Ottawa would share the risks on the multibillion-dollar project.

A key issue for the province was how much risk the federal government would assume for any cost overruns. Ontario had wanted a company to design and build reactors on a so-called turnkey, fixed-price basis in the hopes of avoiding the mistakes associated with previous projects, which saddled Ontarians with billions in debts.

Just last year, the government said it would have two new reactors up and running by July, 2018 at its Darlington nuclear station in Clarington, a fast-growing community about 80 kilometres east of Toronto. Darlington is home to four nuclear reactors operated by Crown-owned Ontario Power Generation.

Nuclear power accounts for about 50 per cent of Ontario's electricity needs.


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