John Spears of the Toronto Star published an interesting piece the other day about the performance of Ontario Power Generation’s Pickering nuclear plant. Its headline reads “Pickering nuclear units among the most expensive, least reliable in the world,” but readers should keep a couple of facts in mind. First, as Scott Luft points out, price figures are nowhere to be found in the TorStar piece. This is important, because Pickering electricity fetches a regulated rate, 5.585 cents per kilowatt-hour. That is cheap—much cheaper than most of the other generators in the province. It is less that Bruce Power’s output, and far less than what gas-fired generators get, and far, far less than the allegedly green sources wind and solar.
Second, Pickering represents 16.2 percent of OPG’s total generating capacity but generates nearly 23 percent of OPG’s actual electricity. An under-performing nuclear station still out-performs all other types of generation.
And third, OPG turned a profit in 2011, as it does every year. i.e., OPG turned a profit even though a big chunk of its output came from an allegedly under-performing station selling power at a regulated low price.
However, in case anyone thinks Spears is taking a shot at Canada’s domestically developed nuclear reactor technology, CANDU (for Canadian Deuterium Uranium), he is not. Spears points out that OPG’s other nuclear plant, Darlington, is an excellent performer. (Those who know, know that Darlington is a CANDU plant.) My numbers say the same thing: Darlington at 3,440 megawatts represents 18 percent of OPG’s capacity—two percent more than Pickering. But at 30 billion kilowatt-hours, Darlington produced over 34 percent of OPG’s power in 2011.
But Pickering: the Spears article underlines what has happened as the result of decisions, made in the mid- to late-1990s, on the management of Ontario’s nuclear fleet. It is, or should be, a case-study in the management of public assets. Essentially, seven CANDUs were taken out of service, and Ontario’s electricity generation shifted hugely to coal.
Why did this happen? Readers may recall the Darlington construction project. This was originally approved in 1977 and envisioned a final in-service date of 1988 at a cost of $5 billion. Of course that is not how it turned out. Unit 4 of 4 came into service in 1993; the pricetag for the whole shebang was over $14 billion.
When unit 4 entered service in 1993, the government of the day was the NDP, led by Bob Rae. The NDP is, and was then, fairly leftist and anti-nuclear. As I discussed in “Ontario’s electrical future,” Rae decided early on that he would overcome his party’s bad rap in the business press by pandering to the privatization ideology of the day. Accordingly he decided he would deal with Darlington specifically by privatizing Ontario Hydro, OPG’s progenitor. He appointed Maurice Strong, a former oil man, to head Ontario Hydro and get the privatization ball rolling.
Strong took the ball and ran. His main contribution was to transition Hydro from a nuclear utility with remarkably low carbon emissions back to a fossil utility with high emissions. He was an Amory Lovins acolyte and had believed Lovins’s breezy predictions of a future in which windmills and solar panels provide more power than Ontario auto plants, steel mills, and nickel smelters could possibly use. (And if that future proved elusive, then Lovins’s “negawatts” would kick in—negawatts are the power you don’t use. In other words, when wind and solar couldn’t muster the energy to smelt nickel, well then nickel would remain unsmelted, and the company would either lay off workers or keep them busy with make-work projects and lose money.) The Darlington B plant was cancelled, and in line with the MO of all who advocate similar moves, Strong dressed this up as a commitment to “sustainable development.” Black is white for those who tell the world they are “green.”
It should be noted that during the entire Darlington construction project, Ontario Hydro’s operating nuclear plants, Pickering and Bruce, had the best operating records in the world. But by the time Rae’s term as Ontario premier was finished, 1995, the original units in the fleet—4 at Pickering “A” and another 4 at Bruce “A”—needed refurbishment. (Jeremy Whitlock of AECL has an excellent summary of the role of refurbishment in the life of a CANDU.) Rae’s successor as premier, Mike Harris, did not want to spend any money on refurbishment. At the time, he didn’t need to. There were over 8,000 megawatts of perfectly good coal-fired capacity that had seen little action while the 16 Pickering and Bruce units were running at full power for hundreds of days at a time.
So the decision was made, on the recommendation of a consultant brought in to give an ostensibly objective seal of approval for privatization, to lay up seven of Ontario’s CANDUs: the entire Pickering A station, plus one unit at Bruce A.
Why was it necessary to lay up seven units at once? There never was any doubt these machines would some day return to service. Notwithstanding Lovins’s platitudes about wind, solar, and negawatts, everyone knows electricity is simply too essential to society. No class of generators is as capable as nuclear of powering entire jurisdictions from such tiny patches of land. So everyone knew the laid-up Pickering and Bruce units would re-enter service.
In light of this, it is remarkable that seven units were laid up at once. Nuclear reactors are systems, an interaction of humans with machines. Take machines out of the equation, and there is not much for the humans to do. With Maurice Strong’s “you’re not wanted on this voyage” message ringing in their ears, and with reactor after reactor summarily yanked out of service, many of the humans sought more appreciative employment elsewhere.
Bill Garland, retired reactor physics prof at McMaster and someone who worked on the CANDUs at Darlington and elsewhere, points out that the mass layups and consequent exodus of talent virtually guaranteed systemic difficulty in approaching the mid-life refurbishments. So when the Pickering unit 4 refurbishment was approved in 1999, the refurbishment team started with an institutional memory deficit—many of the “supreme experts of CANDU” who knew Pickering A like the back of their hand had departed in the Strong onslaught. The memory deficit, totally avoidable if only the senior political decision-makers had had an appreciation of the value of sound succession planning, ensured that the Pickering 4 refurbishment would be costly and embarrassing to the utility.
Garland says that a crack refurbishment team should have been formed early on to tackle the projects one by one, immediately applying lessons learned. This would have built efficiency into the refurbishments. It would have been the logical and economical way to manage these extremely valuable public assets.
And it is not as if Ontario Hydro did not share this point of view. I am told that Pickering A station management recommended exactly this approach. Obviously the recommendation was declined.
In light of this, Pickering’s issues today are more understandable. And remember—OPG turned a profit on our, Ontario’s, behalf using these reactors. Under-appreciated if not outright disrespected, the workforce continues to unfailingly provide essential electricity to us. We should salute them.