Energy Minister Bob Chiarelli has good reason to cancel the proposed life-extension of the Pickering nuclear station when he releases his government’s new Long Term Electricity Plan next month. Electricity demand is falling while the cost and risks of running the Ontario’s aging nuclear reactors are increasing. It makes sense to retire Pickering.
Pickering: Electricity We don’t Need
Imagine spending billions on something you don’t need. This is exactly what we’re doing with Pickering.
Ontario electricity consumers pay Ontario Power Generation (OPG) over a billion dollars annually for Pickering’s output, but as the graph below shows we don't need Pickering at all.
The graph contrasts the Independent Electricity System Operator’s (IESO) projection for overall electricity demand (the blue line) with the projected need for “baseload” supply (the redline).
Ontario’s electricity planners consider “baseload” to be the minimum amount of supply to meet constant demand. Because they run twenty-four hours a day, hydro and nuclear plants are currently used to meet baseload demand (although this could change in the future).
All of Pickering's output - the checkered yellow bars - fall above the red line.
The take-away message: Pickering’s entire output will be surplus for the next five years. We’re spending billions on something we don’t need.
And while the surplus does drop in 2019 and 2020 as reactors at Bruce and Darlington go offline for refurbishment (this could also change with adjustments to refurbishment schedules), this graph most likely underestimates baseload supply because it doesn’t include production from other baseload sources, such as Combined Heat and Power (CHP) facilities.
Indeed if Minister Chiarelli follows through on his government’s promise to put ramp up energy conservation demand will drop even further by 2020.
Pickering: A Money Pit
What do you do after buying electricity you don’t need? Right now we’re typically selling it at a loss to the United States.
At present, Ontario’s grid operator pays OPG about 5.5 cents a KWh for Pickering’s output and then sells it a rebate to the Americans. OPG wants more for running its aging reactors and has asked the Ontario Energy Board to increase the payments for its nuclear plants to 6.9 cents KWh – a 30% increase. This would increase the average Ontarian’s electricity bill by $5.36 a month.
Indeed, a 2012 review by Ontario Power Authority (OPA) characterized Pickering’s continued operation as a potential $760 million “dis-benefit” to the province’s electricity system.
In short, Pickering is a massive money pit.
Pickering is operating beyond safety limits
Continuing to run the agining Pickering reactors also comes with increasing accident risks.
Even if there's no need for the power, OPG hopes to get paid for running the Pickering reactors until 2020. This is highly risky because Pickering reaches the end of its design life next year.
And despite years of preparation, OPG failed to provide proof it could safely operate Pickering beyond its design life during hearings of the Canadian Nuclear Safety Commission (CNSC) last May.
Worse still, Greenpeace submitted evidence to the Commission showing the risk of an accident at Pickering had increased significantly and the station’s operation exceeds safety limits. The evidence was OPG’s own risk studies.
In response, the Commission - in an unprecedented move - denied OPG permission to run Pickering beyond its design life. It instructed OPG to come back next year with a full safety case including “an action plan” for system upgrades if warranted.
What would such an action plan entail? Potentially expensive engineered upgrades. The cost of these upgrades would eventually get passed onto electricity consumers.
Time to Retire Pickering
Last month, Energy Minister Bob Chiarelli announced he was cancelling plans to build new reactors. He admitted new reactors weren’t needed due to declining electricity demand.
What Minister Chiarelli didn’t say was this decline in electricity demand has also eliminated the need for Pickering.
New reactors were meant to replace Pickering when it closes. And the proposed life-extension of Pickering was intended to bridge a perceived electricity gap between Pickering's end of life in 2014 and when new reactors were hoped to come online in 2020.
Declining electricity demand, however, has eliminated the need for new reactors and Pickering.
Minister Chiarelli has good reason, then, to cancel the proposed life-extension of Pickering when he releases the government’s new Long Term Electricity Plan next month.
Indeed, it doesn’t make any sense to spend billions on something we don’t need.