Power for Less
Electricity available, low prices
Next-door neighbour, Québec, offers electricity much cheaper than our nuclear plants can provide
By Jack Gibbons
If someone offered you renewable energy at half the cost of nuclear power, would you buy it? I think most Ontarians would jump at a deal like this and that’s why our government should be sitting down with our neighbours in Québec to talk power.
Québec has a problem: it is about to bring two new hydroelectric plants online just as demand—and prices—for the electricity it exports to the United States are being squeezed. Cheap natural gas, robust energy efficiency programs in places like Vermont and New York, and big changes in industrial demand are making it harder for Québec to market its power. Last year the province earned, on average, just over four cents a kilowatt hour for its power exports.
Compare that to the 8.6 cents per kilowatt hour that Ontario Power Generation (OPG) currently estimates will be the cost of power from a rebuilt Darlington Nuclear Station. That means that even in the most optimistic scenario (and OPG is always highly optimistic about its nuclear repair bills), power from Darlington will cost twice as much as what Québec is selling: clean, renewable power for right now. That translates into Ontarians paying over $1 billion a year more for electricity from Darlington.
It’s not like we can’t use Québec’s power. Existing transmission lines between our provinces can carry enough power to replace 86 per cent of the output of Darlington. Yet last year, we used low-cost Québec power to meet less than 2 per cent of our electricity demand.
For a taste of what will happen if we continue to turn our back on this readily available source of affordable power, all you have to do is look at OPG’s current application to the Ontario Energy Board for a 30 per cent increase in the price it is paid for power from its nuclear stations. This is just the tip of the iceberg of what will be an ongoing series of rate increases to pay for enormously expensive reactor rebuilding.
Let’s remember that every nuclear project in Ontario’s history has gone vastly over budget—on average by 2.5 times the quoted price. If that happens again with Darlington (and it likely will, just as it recently did at New Brunswick’s Point Lepreau nuclear station), we are looking at a true cost of 19 to 37 cents a kilowatt hour—five to nine times the cost of power from Québec.
Instead of waiting the eight or more years it will take for an expensive Darlington rebuild, we can flip the switch on Québec power right now. Almost all of Québec’s exports are sold under short-term contracts, meaning this power is essentially up for grabs. Among other things, that would allow us to shut down the badly aging Pickering Nuclear Station in 2014 instead of rolling the dice on operating this increasingly unsafe plant past its best before date as OPG wants to do.
It would also give us the flexibility to adapt quickly and economically to a rapidly changing electricity market. Electricity usage in Ontario has fallen by 10 per cent since 2005 despite a growing population and economy. This is not just some temporary blip tied to a soft economy—it is an early indicator of big changes in the ways we use energy.
The Ontario government itself recently took a group of visiting journalists on a tour of some impressive Ontario energy innovators, including to the ArcelorMittal steel mill in Hamilton where new efficiency measures are expected to cut energy demand by 60 per cent. Similarly, according to the US Environmental Protection Agency, new energy-efficient servers can reduce the energy consumption of data centres by up to 54 per cent. LED lighting and intelligent controls have been proven by pilot studies right here in Ontario to cut power usage by up to 70 per cent. Our world is changing—fast.
Meanwhile, costs for renewable power continue to fall so fast that banking giant Citigroup is warning that sources like wind and solar will easily outcompete even cheap fossil fuels in the next decade. Of course, another advantage of working with Québec is that our neighbours can help store Ontario renewable power by using our surplus green power while holding back water in their reservoirs—thereby creating a steady 24/7 source of clean, renewable power.
The last thing we should do right now is lock into high-cost, inflexible nuclear power for another 40 years, especially when we have a lower cost and safer option right next door.
Jack Gibbons is chair of the Ontario Clean Air Alliance.