Ontario Power Generation (OPG) is working to ensure nuclear power is part of the province's future with approved plans for a $12.8-billion refurbishment of four nuclear reactors at the Darlington generating station, just east of Toronto.
In a news release, the province says nuclear refurbishment at Darlington will add $15 billion to Ontario's gross domestic product and will create up to 11,800 jobs annually. The project including all four reactors will involve roughly 30 million hours of work over a decade with the involvement of more than 180 companies, the statement said.
"Proceeding with the refurbishment at Darlington will ensure that nuclear continues to be Ontario's single largest source of power," said Energy Minister Bob Chiarelli.
The refurbishment is slated to begin this October and will provide 3,500 megawatts of emission-free power, according to the province. All four units are scheduled to be completely refurbished by 2026.
OPG will have to come back to the government for approval of each subsequent reactor refurbishment project, a move the government says will protect consumers.
"Refurbishing Darlington is an investment in Ontario," said OPG president and chief executive officer Jeffrey Lyash. "It's good for the customers, it's good for the economy and it's good for the environment. We're confident we have done the work and have the people in place to deliver this project safely, on schedule and on budget."
Sources familiar with the announcement say the final budget includes a $1.7-billion contingency fund in case of cost-overruns on the $4.5 billion portion of the project done inside the reactor itself — the nuclear science work deemed as "subject to execution risk" versus the fixed contracts for the majority of the supporting infrastructure.
OPG estimates it would need between 7.2 cents-to-8.1-cents-per-kilowatt-hour to recover the total cost of the refurbishment, below current averages of 9.2 cents-per-kwh, but more than privately-owned Bruce Power will be paid under a new contract.
Energy Minister Bob Chiarelli says nuclear power is "playing the role in the future that it has played in the past." pic.twitter.com/IMwj3hgodp— @MakdaGCBC
Bruce Power refurbishment plans
Bruce Power announced plans last month to spend $13 billion to refurbish six nuclear reactors at the generating station it operates under contract in Kincardine, on Lake Huron. It will be paid between 6.57-to-7.7-cents-a-kwh for the power generated by the refurbished reactors.
The Liberal government wants to extend the scheduled lifespan of the reactors at both generating stations, which would normally end around 2020, by about another 30 years.
OPG was "limiting risk by including contractual provisions that keep contractors and subcontractors accountable for any delays or overruns," on the Darlington refurbishment, said one source.
Bruce Power assumed all risks of cost overruns for its nuclear rebuild project, which will start in 2020, four years later than originally planned.
Energy Minister Bob Chiarelli says Ontario is well served by nuclear initiatives being a part of energy solutions. pic.twitter.com/sQlhH2rbTS— @MakdaGCBC
Pickering may operate until 2024
Ontario's only other nuclear generating station, in Pickering, is also scheduled to be decommissioned in 2020, but the province has approved OPG's plan to continue operation until 2024, protecting 4,500 jobs. OPG will be in talks with the Canadian Nuclear Safety Commission and the Ontario Energy Board to obtain the necessary approvals to extend operations, according to the province.
"The plan to refurbish the Darlington nuclear units and to keep Pickering in operation longer during the refurbishment period is a cost effective way to meet our future power needs," said Bruce Campbell, president and chief executive officer of the Independent Electricity System Operator.
OPG president and CEO Jeff Lyash touted the benefits of the Darlington refurbishment in a recent speech, citing a Conference Board of Canada report showing it would generate $14.9 billion in economic benefits to Ontario and create 11,800 jobs a year during the peak of construction.
Premier Kathleen Wynne wants to keep generating about 50 per cent of Ontario's electricity from nuclear power, and points out that her government cancelled plans to build a new nuclear generating station, which would have cost at least $15 billion.
Ontario's opposition parties say the Liberals have made a mess of the electricity sector and have driven rates so high they are forcing companies to leave the province for cheaper-power in neighbouring provinces and states.
Anti-nuclear activists such as the Ontario Clean Air Alliance say nuclear projects always run over budget and they want OPG to abandon the refurbishment plans and instead import more electricity from Quebec.
Greenpeace Canada is concerned about possible accidents at nuclear generating stations and says refurbishing the aging reactors at Darlington is not worth the risk.
OPG Pres. Jeffrey Lyash says Pickering nuclear can keep running while Darlington plant is being refurbished. pic.twitter.com/UEkCXFvdZL— @MakdaGCBC
Here's a look at the mock reactor on display for today OPG announcement. pic.twitter.com/rZWCPZUDTi— @MakdaGCBC