Ontario nuclear competition: which Team Canada will show up?

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Atomic Energy Canada Limited (AECL) is, for the first time in its history, in a competitive process to sell nuclear reactors in Ontario. It is competing against two deep-pocketed giants of the international nuclear industry, Areva and Westinghouse.

As the incumbent vendor—all power reactors in Canada are CANDUs—does AECL have the inside track? Yes and no. Yes, in that its machines provide roughly half of Ontario’s electricity on any given day. Without them, we would be powering most of the province with coal. If you think power-sector emissions are high now, consider the alternative.

And no, for the exact same reason. Every glitch in the performance of Ontario’s reactors reflects on AECL. And there have been many glitches.

I don’t envy the bid evaluators, or the provincial Energy Minister who will have to explain the results of their evaluation. This is because there are really two AECLs to consider. There is the Bruce/Pickering AECL—the original sixteen-reactor fleet whose construction began in the 1970s. The Ontario government yanked eight of them out of service in the mid-1990s, well before they were scheduled for decommissioning. The day-to-day performance of the still-operating units in this part of the fleet is a bit spotty, to say the least. Tracking their operation—and their impact on Ontario’s power system and its total emissions—is like watching a young fireball closer throwing heat in the bottom of the ninth. You hope he does well but he makes you nervous.

And then there’s the post-Pickering AECL. This consists of fourteen units in five countries. These include the four at Darlington on Lake Ontario just east of Oshawa.

The performance of this part of the AECL fleet has been good. AECL likes to point to Nuclear Engineering International’s yearly Power Plant Performance rankings, which regularly put three of South Korea’s Wolsong CANDUs in the top ten global performers. Not bad for a technology that represents about seven percent of the world power reactor fleet. Neither Areva nor Westinghouse has a unit on the top-ten list, though the South Korea–developed PWRs at Yonggwang and Ulchin were based in part on Westinghouse technology.

The question for the Ontario bid evaluators, then, is which AECL will show up?

This question becomes positively fascinating when you delve into the reasons for the layups at Bruce and Pickering in the mid-90s. I recently sat down with Steve Paikin, host of The Agenda, to discuss the Ontario nuclear competition. He asked me how our province’s experience with the construction of the Darlington station, which saw cost overruns of around $10 billion, might affect the bid evaluators’ perception of AECL.

Not an easy question to answer. I tried to explain that this wasn’t strictly AECL’s fault, that the huge overrun was a function of the convergence of many factors, including high cost of borrowing, the shifting in regulatory requirements in the wake of Three Mile Island and Chernobyl, etc. By the time I finished my answer, I felt like a political science professor. There are reasons, and there are excuses. The fact remains that AECL was the reactor vendor.

All of which is to say, incumbency is a double-edge sword.

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Vern Austman
12 years ago

Darlington over-run was primarily a result of government mandated suspension of the building schedule after commitment of a large part of the capital. You ask which AECL will “show up”, obviously the latest design based on the successes and failures of the past ones. Consider what a new technology entails: the reactor in an NGS requires the largest portion of the manpower expertise and skills in all phases from design to operation. Canada has a body of manpower expertise and skills for Candu developed over 40 years; that will be required for the next 40 to run the existing units. If a new reactor technology is chosen we must buy that body or build it in parallel to the Candu body. The bid process must recognize that cost. What are the successes and failures of the PWR designs; which of those will “show up”?

12 years ago

Thanks Vern, good points.

PWR successes: the high average capacity factor of the U.S. fleet.
PWR failures: TMI was a PWR. There has been no even remotely comparable incident involving a CANDU.

Plus, we can find Darlington-esque cost overruns with every PWR that was under construction during the same time. Darlington’s cost had less to do with reactor design than with political decisions, as you point out.

Good point also about higher workforce costs in the case of a PWR decision. But parallel workforces might be good, and especially if Ontario/Canada were able to wrangle PWR supply chain investments out of Areva or Westinghouse. Maybe that could give Ontario’s manufacturing sector a shot in the arm.

That’s why I wish the RFP said “vendors ” instead of just “a vendor.” It’s not too late.

Vern Austman
12 years ago

I imagine that the supply chain will be well protected by the outside bidders. Some portions are not possible for Canadian industry and world capacity will be stretched for some critical components, i.e., forgings.
The critical manpower is in the utility and the regulator on the reactor side. When you examine what they both have invested already in Candu, it is a daunting task, and it cannot be provided by outside parties. This must be very carefully considered.
If that cost is added to bids other than Candu; the selection would be obvious.

12 years ago

I made exactly this point to
Steve Paikin
last week: the LWR bidders’ technology will have to rate much higher than AECL’s in order to outweigh the jobs and spinoffs advantages of CANDU.

You may be right about heavy forging when it comes to the possibility for Ontario or Canada becoming a link in the global LWR supply chain. But is there really no opportunity for Ontario manufacturing anywhere along the chain? We have steel plants located close to ports, and a sophisticated fabrication sector. Plus, Westinghouse and Areva make local content assurances.

12 years ago

Nope – you are way off with that.. Wrong on too many levels to count..

12 years ago

Thanks Bud,

You don’t need to count them all, one or two of the main levels will do for starters.

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