Even nuclear energy may not overpower the uncertainty in this plan

The Globe and Mail: Murray Campbell - March 11, 2008

You can hear the chops being licked. Ontario is getting back into the nuclear power business with a splash and there is big money to be made.

Four companies - three of them non-Canadian - have answered the bell as the McGuinty government finally set in motion plans to spend up to $40-billion to build two new nuclear reactors and refurbish perhaps half a dozen others.

The plan, as laid out by Energy Minister Gerry Phillips, is straightforward. By the end of this year, the province will have selected the site of a new reactor, the technology to be used and the contractor to build it. Shovels will go into the ground in 2012 and electrons will be banging around by 2018. There might be a gap in the electricity supply to be filled - especially since the government is sticking to its pledge to phase out its coal-fired plants by 2014 - but this will be filled. Mr. Phillips assures us that the lights will stay on.

But his optimism may be unwarranted because, as anyone who has ever done a home renovation will attest, anything that can go wrong usually does go wrong. Many observers of the nuclear industry suggest that 2022 is a more reasonable date for the startup of a new reactor.

The key word for any nuclear project is risk. It is never a simple matter to commit $5-billion to build a 1,200-megawatt reactor using technology that is constantly evolving. The global landscape is littered with examples of nuclear facilities that came in late and over budget. The world is on the verge of a nuclear renaissance, but there's little reason to think that the future will be any different from the past.

Mr. Phillips says any deal signed by his government will have to be justified to Ontarians who are going to want a great deal of assurance that costs are contained and that the winning company can actually deliver electricity. To achieve that, he will need to negotiate a contract that severely limits the government's liability for the cost overruns that are certain to arise. There will be carrots dangled in front of him in the form of offsetting work on boilers and other reactor components, but negotiating this complex interplay will eat up great hunks of time.

The government is also at the mercy of the federal regulatory system and, if there are any lessons to be drawn from the Chalk River fiasco, this is not a good thing. Saskatchewan Premier Brad Wall is not alone in his recent complaint that the Canadian Nuclear Safety Commission takes too long to approve new projects. A dramatic speedup seems unlikely, however, given the efforts of increasingly sophisticated anti-nuke organizations such as Greenpeace.

But even assuming that there is timely approval to begin construction of a new nuclear plant, the question remains who is going to actually build it. There is already a dire shortage of skilled workers in Ontario, and it will get much worse if New Brunswick and Alberta proceed with their own nuclear projects. The government is expected to deal with the shortage in its March 25 budget.

All these risks hold true for all potential vendors, but Atomic Energy of Canada Ltd. carries added uncertainty. The revelation that Chalk River's planned Maple reactors are a decade behind schedule shows the Crown corporation has difficulty getting projects off the drawing board. And that's exactly where its ACR-1000 is, still needing years of engineering work.

AECL is also plagued by political uncertainty. The Harper government wants to sell it, which undercuts assurances that it can guarantee a project on time and on budget and, if it can't, that its shareholder will guarantee the cost overruns.

A new nuclear era has begun, but it's far from clear how it will turn out.

<< Back to Previous Page