The Financial Accountability Office (FAO) released a report in late 2017 after completing a review of Ontario’s nuclear refurbishment program under the Long-Term Energy Plan (LTEP).
Typically, when these types of reports are issued, they tend to be highly critical due to their nature, but that was not the case with this report. The FAO estimated the cost of Bruce Power nuclear, which includes life-extension investments through 2064, will be consistent with what the company announced in December, 2015.
The report also reinforces the role low-cost Bruce Power nuclear will continue to play in the supply mix over the long term. The report states, “There is currently no portfolio of alternative low-emissions generation which could replace nuclear generation at a comparable cost.”
While the FAO considered many factors and risks as these reviews are intended to do, it was recognized that Bruce Power will meet all investment requirements, and assume all risk of delivering projects on-time and on-budget.
Furthermore, the report is clear that ratepayers are protected. “As Bruce Power is a private sector entity, any transfer of risk to Bruce Power reduces the exposure of ratepayers,” the report states. Bruce Power’s Life-Extension Program commenced Jan. 1, 2016, and remains on-time and on-budget. This program includes the 13-year Major Component Replacement (MCR) Project, which begins in Unit 6 in 2020, and preparations are well under way for this.
The FAO also looked at alternatives to refurbishment from both a cost and greenhouse-gas perspective.
One of the often most-vocal groups in Ontario against nuclear in the province, has been the Ontario Clean Air Alliance, which in itself is interesting, as nuclear was a key contributor to phasing out coal. The group has argued that imports from Quebec could replace nuclear. This has been discounted many times in the LTEP, through independent reviews completed by the Independent Electricity System Operator (IESO), and now the FAO.
The FAO concluded, “The combination of American markets willing to pay higher prices for Quebec’s current surplus electricity, transmission limitations, increasing domestic demand in Quebec, and the cost of new Quebec generation, leads to the prospect of large-scale imports from Quebec not being competitive with nuclear generation.”
Nuclear power meets 60 per cent of Ontario's electricity needs. It has several major benefits including low operating costs, highly-reliable supply, and virtually none of the emissions that lead to smog and global warming. Ontario’s nuclear fleet is also a key supply for life-saving isotopes that are exported around the world.
While the report was positive, I do believe many of these benefits need to be further quantified as they are critical factors. The good news is the FAO’s conclusions were reached without taking many of these factors, particularly medical isotopes, into account.
With the policy direction clear in the LTEP, and these conclusions by the FAO, we will continue to be focused on delivering for Ontario through our daily operations and keeping our investment program on-time and on-budget.