Nuclear energy in Ontario: friend to both friend and foe

Ontario power lines: by far most of the electricity flowing through them comes from nuclear plants. Because nuclear is cheap, Ontario power is still affordable

Most of the electricity running through these transmission lines is made in Ontario nuclear plants. Good thing, too: nuclear-generated electricity is Ontario’s second cheapest source. Ratepayers pay between 5.6 and 7 cents per kilowatt-hour for it. Wind power costs us more than 11 cents, and under the Ontario feed-in tariff (FIT) program it costs 13.5 cents.

Given that our nuclear plants typically run 24 hours a day, seven days a week, for hundreds of days at a time, it is fair to assume that the off-peak rate that we rate-payers are now charged—indicated on my most recent electricity bill as 6.2 or 6.5 cents per kilowatt-hour—is about the closest reflection of the true cost of electricity that we all pay.

The 13.5 cents we pay for most current FIT wind is also a close reflection of cost. Bear in mind that the off peak hours are when wind often kicks in, i.e., when we don’t need it. But whenever the wind kicks in, whether it’s during off peak hours or not, we ratepayers are forced to pay the owners of wind turbines 13.5 cents per kWh—more than twice the off-peak rate. Why should we pay top dollar for low-quality, unpredictable power that typically kicks in exactly when we don’t need it? Because the owners of wind turbines would go bankrupt if we only paid them the off-peak rate. It’s all about capacity utilization: wind turbines do not produce enough power often enough for their owners to make a profit if they are only receiving normal electricity rates. So we ratepayers pay top dollar to keep the turbine owners from going out of business.

So the FIT rate for wind does reflect cost: it’s the cost of making sure turbine owners make a profit. But is it a cost we ratepayers should cover? Are we the ratepayers obliged to ensure that someone who goes into the electricity generation business makes a profit? Isn’t that a risk that the business owner should bear? After all, business owners are covered by bankruptcy laws if things go wrong. Is that not enough risk protection?

Bear in mind also that the 13.5 cent FIT rate is just the tip of the iceberg. Ontario’s alleged push for wind power is really a push for more fossil-fired power; in our case, because coal is politically incorrect, the preferred fossil fuel is natural gas. This is why the government has been scrambling to build as many natural gas-fired plants as possible. The issue of the cancelled gas plants, which has laid the current [now former] premier low and now bedevils the current premier, shows how difficult it is to find appropriate sites for these new plants. Nobody wants them, as is evidenced by the opposition to the Holland Marsh peaker plant (the only supporters were “greens” who don’t live in the area) and the cancelled plants in Mississauga and Oakville.

And why does nobody want gas plants in their neighborhood? Because of scenes like the one in the video below, the infamous San Bruno gas-line explosion of 2010:

The San Bruno natural gas explosion occurred in a fairly populated area. Likely the people who live near the line would rather not coexist with it. And likely the residents of Mississauga and Oakville who opposed the gas plants in those communities based their opposition on exactly this kind of explosion.

Bruce Sharp, an energy analyst, told the Toronto Star that the Oakville gas plant cancellation will end up costing Ontario upwards of $700 million (Sharp wrote in the Financial Post that the cost would be $733 million). With the Mississauga cancellation running at at least $190 million (a figure acknowledged in July by the provincial finance minister), those two gas plants could end up costing Ontario nearly a billion dollars. While both plants have been re-sited, none of the planned capacity has even been built yet.

The Ontario legislature was prerogued a week ago because of the gas plant projects, and as mentioned the gas-plant fallout has also ended the current premier’s political career. If the premier’s successor is looking for a way out of this energy mess, he or she would be well advised to revisit the political calculus surrounding nuclear energy. Nuclear is the government’s friend: during the nine years of the McGuinty premiership, the atom repaid the premier many times over for his good decisions regarding refurbishing the Pickering and Bruce units. These good decisions kept Ontario’s lights on and its power cheap.

Cheap power also makes nuclear the anti-nuclear crowd’s friend. Because most of the electricity running through provincial transmission wires comes from nuclear plants, and because nuclear fetches a relatively cheap regulated and contracted price, the atom acts as a giant economic flywheel that keeps prices stable and low. The FIT rate for wind power is, as mentioned above, uneconomic and anti-consumer. Nobody in his right mind would voluntarily pay top dollar for a commodity—electricity—when he can get the exact same thing for half the price. But wind currently generates small amounts of power. Its high price is moderated by the huge amounts of cheap nuclear-generated power. So the anti-nuclear crowd, who want Ontarians to believe we can power the whole province with wind, can continue to tout wind and revel in self-congratulatory political correctness. Nobody notices, because nuclear keeps power prices cheap.

Building nuclear reactors: this is what real green jobs look like. Wouldn’t this scene look beautiful at Darlington? Imagine the boost such a project would give to Ontario’s workforce and economy.

Nuclear is a friend to the government for another reason. Any nuclear construction project is a major capital infrastructure project. These kinds of projects represent high-paid, high-skilled jobs, which are in short supply in Ontario today.

4 comments for “Nuclear energy in Ontario: friend to both friend and foe

  1. James Greenidge
    October 25, 2012 at 22:01

    The most ironic “backwards” thing to me is seeing all the mass anti-clear protests in Fukushima; don’t you usually protest AFTER a horrific incident actually KILLS someone? I bet there were victims at those exploding oil/gas facilities during the quake in Tokyo who would’ve happily traded places with their countrymen in Fukushima! That’s why nuclear plants technically shouldn’t have any problems with community acceptance near towns or neighborhoods; Unlike oil, gas and even coal, nuclear facilities don’t have a long grim track record of KILLING/injuring/afflicting anyone’s health worldwide, forget Canada, even under rare worst case situations. It’s called a no-brainer decision powerplant choice (though I can understand the aesthetics concern of those monstrous cooling towers.) A lot of people need some serious public nuclear education and enlightenment out there! I also hope Ontario holds on those gas plants for nuclear conversion though!

    James Greenidge
    Queens NY

  2. donb
    October 26, 2012 at 15:06

    I think the public should vote with their dollar about the power source(s) they wish to use. If you want wind power, you should be able to have it, and pay the higher price for it. If you want nuclear, then elect that source of power and pay a lower rate.

    My local power utility had a program like this going for a while, where one could buy wind energy in blocks (100 kWhr per block, if I remember correctly) and pay extra for it. The take rate was really low – only a few percent of their customers did this.

    This did not satisfy the pseudo-environmentalist, so they pushed a ballot initiative here in Washington State to force power utilities to buy 15% “renewable” power (Oh, by the way, existing hydro power doesn’t count in the 15%). The voters approved (I didn’t), and are now wondering why their power rates are going up so much.

  3. Andrew Jaremko
    October 26, 2012 at 23:22

    Steve – thanks for the post, as always. Other people are also conscious of our absolute reliance on reliable and cheap energy to power our lives.

    I think you would be interested in the paper Renewable Energy Limitations by Leo Smith, MA (Electrical Sciences), which I found in his comment on the post Why Natural Gas Isn’t Likely to be the World’s Energy Saviour on Gail Tverberg’s excellent and thoughtful Our Finite World blog.

    In his Introduction he discusses his approach against the

    backdrop of extreme emotional attachment to ‘renewable energy’ and extreme ignorance of the principles underlying power generation, and in the face of extreme opposition to any contradiction of its precepts, that we have to – perhaps vainly – attempt to lead those who are prepared to be led, down a path of a somewhat technical nature, in order to understand why, despite its seeming usefulness, it is in the end a deeply disappointing, wasteful and ultimately fruitless exercise.

    And why simply spending more money on it will never achieve the hoped for results.

    In this case the Devil is firmly in the detail. hiding in tacit assumptions about the nature of power and energy and electrical systems, that are simply wrong by any technical engineering standards, and yet look superficially to be mere details.

    He does a basic cost-benefit analysis to show why and how adding unpredictably intermittent power ‘sources’ to the electrical grid drives cost and complexity upward with no benefit to power purchasers or the environment. And in his discussion of the ‘Real Economics of Nuclear Power’ he has a photo of people climbing what may be a glacial erratic on a moor captioned ‘Day trippers enjoy an area slightly more radioactive than the ghost town near Chernobyl, and several times more radioactive than Fukshima’s exclusion zone’. (my emphasis) And for the UK, at least,

    a nuclear power station could never be built on Dartmoor or Exmoor. The background radiation would exceed the maximum permitted dose for nuclear workers.

    I encourage everyone to read Leo Smith’s analysis. I don’t imagine there’s any way to make it a requirement for our politicians, with quizzes so they can demonstrate their comprehension…. but I can always dream.

    • Leo Smith
      October 29, 2012 at 14:08

      I was intrigued to see a request from this site to download my paper!

      It is not of the quality I would have liked, but it seems to be answering its major purpose – to actually identify the real fundamental issues and the questions that have to be asked about renewable energy policy.

      And whether down to my efforts or not, at last a UK political group has called for the one thing that will really settle the matter, and that is to identify the OVERALL reduction on emissions that so called ‘green energy’ delivers, and at what cost.

      By the way the picture in the article is Hay Tor. An old volcanic plug of mainly granite – and a popular tourist attraction on Dartmoor mainly because it is only 200 meters from the car park, a distance the few seem able to exceed on foot these days ….The South West of the UK and the North East of Scotland are both notable for radioactive levels high enough to require special building ventilation to control radon build up.

      It is sad to see that Ontario is not exempt from nuclear scares … an article outlining an attack on the government for not knowing what the background levels of radiation were post Fukushima concludes:

      “To put the levels of radiation in Ontario into perspective, Health Canada said a five-hour airplane flight exposes a person to 50,000 times more radiation.”

      Canada to my mind has an almost ideal power generation mix. Hydro electricity to cover the peak demands of the day and the winter, and a potential nuclear baseload covering the rest. And access to uranium and its own nuclear technology (CANDU) inside its own borders.

      And coal if global warning turns out to be a bust, in terms of it actually happening.

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