Ontario’s electrical future: another go at Darlington?

“Live better electrically.” Remember that slogan? It used to be how Ontario Hydro, formerly the world’s biggest electric utility, promoted its product,  electricity. With that slogan, Hydro promised customers a better life if they used more of its product. Though the slogan, together with the underlying concept, fell (and has till now stayed) out of fashion, Hydro delivered on that promise. The utility’s successors in the Ontario generation market, Ontario Power Generation and Bruce Power, are delivering on it as I write this.

How did “Live better electrically” fall out of fashion? It almost boggles your mind, but somewhere along the line somebody got the notion that electricity is bad. Even more astonishing, they got people in power to not just listen to them, but to implement their ideas.

If you don’t believe me, click here. You’ll see a photo of Maurice Strong, former OH chairman, with Amory Lovins, a man who can best be described as a relentless self-promoter in the area of energy policy and someone who possesses serious Green Kavorka.

The caption under the photo is worth repeating here:

Maurice Strong, left, and Amory Lovins. As the NDP-appointed chair of Ontario Hydro (1992–95), Strong transformed the giant utility from a money-losing albatross intent on building more nuclear and coal stations, to a profitable public asset committed to sustainable development. Strong often consulted with Lovins, the world-renowned energy efficiency expert and head of Colorado’s Rocky Mountain Institute. Lovins coined the term “negawatts” to quantify the amount of generation capacity not needed as a result of energy efficiency measures.

That caption is itself a remarkable piece of relentless self-promotion. It comes from a book entitled Public Power, which was written by Howard Hampton, former leader of the Ontario NDP. Though it was Hampton’s former boss, Bob Rae, who had appointed Strong, and though Hampton (like most of his NDP colleagues) had bitterly fallen out with Rae over Rae’s ideological apostasy, Hampton still regarded Strong’s achievements at Ontario Hydro as positive. We’ll see a little later on that they were actually extremely damaging.

Hampton published Public Power just ahead of the 2003 Ontario provincial election, hoping it would resonate among those segments of the public who were concerned about the future of the provincial electricity supply. If it did, the resonance proved counter-productive: the NDP in 2003 lost two seats (they had only nine going into the campaign) along with their official-party status in the Ontario legislature.

Still, Hampton’s fond recollections of Strong and Lovins point up what can happen when good ideas, like “Live Better Electrically,” fall out of fashion. Strong, a former oil company executive, took the advice of Lovins, a consultant to oil companies, on a matter of crucial importance to Ontario: how to ensure a clean, stable supply of cheap electricity and create high-skilled jobs. Lovins is ideologically anti-nuclear, a fact which is painfully obvious to anybody who has ever read through the tedious and poorly formulated arguments in the promotional brochures he passes off as “studies.” Somehow this obvious prejudice didn’t matter to Strong. Possibly because Strong is anti-nuclear himself.

And what steps did Strong take to implement Lovins’s ideas and transform Ontario Hydro into “a profitable public asset committed to sustainable development”? He cancelled the Darlington B project, which would have (1) added around 3,000 megawatts of new carbon-free generating capacity alongside the existing Darlington reactors and (2) created thousands of high-skilled jobs—during a recession which his boss, Bob Rae, had pledged to get out of by… creating jobs. The new reactors would have come online in the late 1990s, just in time to offset the skyrocketing greenhouse gas (GHG) emissions coming out of Ontario Hydro’s five coal-fired power plants.

Of course they didn’t come online in the late ’90s, because Strong had cancelled them, at Lovins’s urging, in the early ’90s. So Ontario grid power from 1999 to 2003 came with nearly twice the GHG emissions as it had earlier—and from the five coal plants Hampton claims Strong steered Ontario Hydro away from. That’s what Hampton means by “sustainable development.”

The Harris government, after winning power in 1995, decided to lay up the Pickering A and Bruce A CANDUs instead of refurbishing them. It was a relatively risk-free decision from the viewpoint of electricity supply. As I mentioned, there were five perfectly operational coal-fired plants, representing nearly 8,000 megawatts of capacity, ready to be pressed into service as baseload suppliers. (In fact, Harris could not have afforded the luxury of putting off refurbishing the CANDUs had there been no coal generators.)

It is important to note at this point that none of the shortfall from the loss of the Pickering and Bruce CANDUs (some 5,000 MW) was met by Lovins’s famous “negawatts.” That’s because negawatts is a bogus concept, designed as a cover to introduce more fossil-fired generation into power systems. No, the shortfall was met by megawatts, with an “M.” And not from some politically correct source. From coal. It turns out that people really do believe that life is better with electricity than without it.

Which brings us to today. The McGuinty government won power in 2003. One of its most problematic promises was to phase out all coal-fired generation by 2007. That didn’t happen, but only because the price of natural gas—which, according to the fossil-fuel advocates who had taken over from Lovins in advising the Ontario government on environmental matters, was supposed to replace coal—went into the stratosphere.

So McGuinty went into a Plan B that he hadn’t pushed in the 2003 election: nuclear power. The laid-up CANDUs at Pickering and Bruce represented 5,000 MW of capacity. Against skyrocketing natural gas prices, refurbishing them was starting to look like an excellent idea.

So McGuinty moved the deadline for coal phaseout to 2014, and approved the refurbishment of the laid-up CANDUs. And, since OPG had decided not to refurbish Pickering units 2 and 3, he also approved new reactors: the Darlington B station that Strong had killed.

But, politics being politics, short-term factors confounded that too. In 2008 the world plunged into the worst recession since the Great Depression of the 1930s. That coincided with unusually mild weather during the summers of 2008 and 2009. Demand for peaking power was low, meaning demand for natural gas was low. The price of gas dropped. Suddenly, gas—the fuel of choice for phoney environmentalists—was viable again as a replacement for coal.

The competition to choose the reactor design to build at Darlington was held in the middle of the low-gas-demand period, i.e., in  the first and second quarters of 2009. Three vendors put in bids: Atomic Energy Canada Limited, the maker of the CANDU; Areva, the French light-water giant; and Westinghouse, the Japanese-American light-water giant. AECL “won”—i.e., it had the best levelized cost per kilowatt-hour—but its bid included a huge estimate of the cost of schedule delays.

The McGuinty government, spooked by that estimate, shelved the competition. And it has been on the shelf ever since. AECL’s offer has long-since expired. So here we are today, back to debating once again how to replace the 6,000 MW of coal-fired capacity by 2014.

If we had known in the early 1990s how decisive a role a Darlington B station could have played in the late 1990s, would we have built it?

That is precisely the question we have to answer now.