11 October 2013

The End of New Build in Canada?

The Liberal government of Ontario, Canada, is reported to have ruled out the funding for two new reactors at the Darlington station in the province. The expected decision follows the indefinite deferring of a decision in 2009 to build two reactors at the Bruce station also in Ontario, and cancellation of a new reactor project in New Brunswick. The decision is both a blow to Candu Energy/SNC-Lavalin and Westinghouse/Toshiba as the planned new reactor option was between the Enhanced Candu-6 or the Westinghouse AP1000.

In September 2006, Ontario Power Generation (OPG) applied for a licence to prepare its Darlington site for construction of up to four new nuclear power units. A licence to prepare the site was issued by the Canadian Nuclear Safety Commission (CNSC) in August 2012.

In June 2012 OPG signed agreements with SNC-Lavalin/Candu Energy Inc.and Westinghouse to prepare detailed construction plans, schedules and cost estimates for Darlington. These were received in June 2013. The original operational date—unrealistic from the start—for the first two units was 2018.

The only option remaining for OPG appears to be to proceed with upgrades of the existing reactors at Darlington, but there remain major unresolved safety issues as well as uncertainties over costs. The current cost estimate ranges from C$6-10 billion. The upgrade at the Pickering A plant which was supposed to cost $1.3 billion, ended up costing twice that amount, with two of the four reactors mothballed instead of being overhauled. Major uncertainties in the costs for upgrading the reactors at Darlington, and the overall economic consequences of proceeding with upgrades have led to estimates ranging from a benefit as high as C$1.3 billion to a loss of C$760 million. A final decision is expected to be announced with the publication of Ontario’s its long-term energy plan later this year.