When unit 2 at the Bruce nuclear plant comes back online this fall after a 14-year layup, it will, every year, inject around 6.5 billion kilowatt-hours of cheap, carbon-free power into Ontario’s grid. How much carbon will it offset? Between 3.5 and 6.5 million tonnes. At the often-mentioned price of $15 per tonne of carbon, Bruce 2 would save Ontario at least $52.5 million worth of carbon per year.
It gets better. When Bruce unit 1 comes back (it was laid up in October 1997), it will supply an equal amount of electricity and avoid an equal amount of carbon. Not to mention avoiding paying for that carbon.
If all this happens before the end of 2010, and Ontario Power Generation’s Pickering and Darlington fleets continue performing well, the Ontario electricity sector will be eligible for federal carbon offset credits.
Under the federal climate plan, any industrial sector that reduces carbon emissions by 18 percent from 2006 levels will be eligible for emission credits. As I mentioned back in December 2007, this makes the federal climate target tougher than the original Kyoto target—at least when it comes to Ontario electricity.
There’s a very good chance that Ontario will meet or better the federal target by the end of 2010. Back in 1994, when all four Darlington nuclear units had joined the Pickering and Bruce fleets, Ontario electricity-sector carbon emissions were around 16.5 million tonnes—more than 8 million tonnes below the eventual Kyoto target. By 2010, that situation will have almost returned. Only Pickering 2 and 3 won’t be in service.
So when Ontario’s electricity sector meets the federal climate change target at the end of 2011, what will be the value of the emission credits?
More important, could any of that value be collected now?