CNA Responds Nuclear Energy

Finding Facts in the Fog of Fiction

By John Stewart
Director of Policy and Research
Canadian Nuclear Association

Have you seen the email that says, “The nuclear industry doesn’t want you to think about Quebec”? Well, we actually do want you to think about Quebec, because the argument that Ontario could import cheap electricity from Quebec and scrap the refurbishment of the Darlington generating station just doesn’t work.

Commission report on Quebec's energy futureQuebec’s commission on energy policy turned in a report in February 2014 on its public consultations – the same report used as the foundation of the import-from-Quebec argument.

As we pointed out last week, the business case to import Quebec electricity just isn’t there in today’s power market. Don’t just take our word for it. Look at these direct quotes from the commission’s report. (The translation is ours.) It turns out that Quebec is awash in supply that it’s been overpaying for in costly, misplaced efforts to encourage alternatives:

“Electricity demand has flattened…. Despite this, Quebec has added important sources of production: wind, small hydro, biomass…. This reality results in an annual subsidy to electricity producers that will reach $1.2 billion in 2017, at the expense of power consumers and taxpayers.” (p. 21)

“In North America, including Quebec and Ontario, authorities subsidize renewable energy on their own territory… rather than pay a premium for clean energy imported from outside….” (p. 181)

That new supply has been costing Quebec much more than its traditional big hydro. To cover that cost, Hydro Quebec needs to export power at peak periods. Otherwise, it loses money:

“Today, these surpluses can only be disposed of on export markets. The first 10 TWh are exported at peak periods at high prices and are profitable for Quebec. The rest, about 20 TWh, is exported in off-peak periods at an average price of $0.03/KWh. But, the cost of energy from new production sources added since 2008 varies between $0.06/KWh and $0.12/KWh.” (p. 21)

The export channels, or “interconnects,” that export those profitable 10 TWh/year cannot handle a greater load:

“The additional (20 TWh) cannot be sold at peak periods because the current interconnects with neighbouring markets are saturated; it can only be sold in off-peak or base periods at prices that are too low to make recent investments profitable….” (p. 176)

More interconnects are not the answer in this market. Rather, the commission recommends against new export deals, and it calls on the Quebec government to trim the subsidized sources of supply within the province:

“There is no doubt in the Commission’s mind that the government of Quebec must immediately cease new requests for the production of electricity and that it must cancel contracts in the process of renewal….” (p. 184)

As we pointed out last week, this is one reason why actual deals for long-term electric power have been expensive in 2014 (more than 10 cents per KWh in the New England power pool).

Electricity exporters have to earn much more than the average cost of production from their big, efficient base-load generating stations – hydro dams in Quebec, and nuclear energy stations in Ontario. They also have to subsidize pricey alternatives. That’s why they need a sales price that covers production costs plus subsidies.  And any power supply that replaces Darlington must be not only large (over 3,000 MW), but available around the clock – not just off-peak or whenever the interprovincial connections allow it.

The bottom line: facts are facts. The price of power is what people pay for it, and not some made-up number based on flawed assumptions. In today’s market, a profit-seeking Hydro Quebec wouldn’t want to sell electricity to Ontario on a sustained basis below the cost of its most expensive production.

Here’s another fact: nuclear energy safely delivers reliable, low-cost power to Ontario. And, in displacing coal and natural gas from Ontario’s supply mix, nuclear energy reduces Ontario’s greenhouse gas emissions by nearly 90 megatons per year.

You’d think an organization that promotes clean air would celebrate nuclear’s zero-carbon emissions rather than generate a fog of fiction.

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Hill Times Ad Targets the Oil Sands

This is the half-page ad that appeared in the July 28 edition of The Hill Times. It is the second in a series of three ads that were selected to run during  the paper’s policy briefing on Canada’s energy sector.

Hill Times Ad - Oil Sands

Check out the first ad here!

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Using Hydro to Displace Nuclear is Wrong-Headed

This letter deconstructing the Ontario Clean Air Alliance’s proposal to cancel nuclear refurbishments and replace the lost capacity with hydro from Quebec appeared in the Toronto Star on July 28 and is worth highlighting

While importing some hydroelectric power from Quebec may make sense, if the price is right, using that power to displace nuclear is wrong-headed. High electricity costs in Ontario have little to do with nuclear power. The electricity that it produces costs about six cents per kWh, which is half the price of wind power and about one-eighth the price of solar power.

About 75 per cent of the electricity generated in Ontario is from greenhouse gas (GHG) emission-free sources, hydro and nuclear. Most of the remaining electricity is generated by fossil fuels, primarily burning natural gas.

If you are really committed to clean air, it would make far more sense to use any imported hydroelectric power to displace natural gas, rather than displace one GHG-free generation source with another. It does not make sense for an organization committed to clean air to advocate a policy that would perpetuate the burning fossil fuels in Ontario.

Michael Ivanco, President, Society of Professional Engineers and Associates, Mississauga

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Hill Times Ad Speaks to Parliamentarians

Check out the half-page ad that appeared in the July 14 edition of The Hill Times! It is the first in a series of three ads that were selected to run during the paper’s policy briefing on Canada’s energy sector.

Hill Times Ad - Parliament Hill

CNA Responds

Buying Power from Quebec: Opportunity Mugged by Reality

By Dr. John Barrett
President and CEO
Canadian Nuclear Association

Over recent months, a number of opinion pieces have appeared in Canadian newspapers advocating an Ontario Clean Air Alliance call for Ontario to cancel nuclear refurbishment plans in favour of purchasing what they call “cheap” electricity from Quebec. In response to this, Canadian Nuclear Association President John Barrett has written an opinion piece appearing in yesterday’s Toronto Star explaining why such a proposal ignores the realities of Ontario’s power system. 

At first glance, the idea of bringing electricity from Quebec into Ontario makes sense. After all, Ontario’s electricity prices are rising; Quebec already exports vast quantities of electricity to the New England states.

However, the Ontario Clean Air Alliance (OCAA) and its Quebec ally, Equiterre need to do their homework before pressing this case much farther. Their argument to replace Ontario nuclear power with Quebec hydroelectric power ignores the value that nuclear power provides to the province. It also overlooks the realities of Ontario’s power system.

Ontario’s nuclear plants produce power safely and reliably every day around the clock. Refurbishing the Bruce and Darlington plants will extend their lives for decades, providing an economical, long-term supply of clean electricity for Ontario. Refurbishing 10 reactors also means Ontario will create thousands of jobs within the province.

The reality of an Ontario-Quebec power deal is that it will be purely commercial. Quebec is a very sharp and tough contractor for whom electric power is a rock-hard commercial business. There will not be any nation-building discounts or new Fathers of Confederation.

If you doubt this, consult the power authorities in Newfoundland and Labrador. In 1969, they signed a generation contract with Hydro-Québec that drove power prices steadily lower over 65 years. Even the onset of massive inflation – the general price level has jumped more than 500 per cent since 1969, according to the Bank of Canada – brought no upward adjustment in the price Newfoundland receives for its power.

The six New England states buy electricity from Hydro-Québec through their Independent System Operator (ISO-NE). Since the start of this year, wholesale power contracts for this New England grid have averaged $100 per megawatt-hour – roughly a dime per kilowatt-hour. OCAA and Equiterre suggest that Hydro-Québec would sell power to Ontario at 5.7 cents per kilowatt-hour. Why should Hydro-Québec accept that price when it can get almost twice as much from New England?

Even if Hydro-Québec cut a special deal for Ontario, the needed infrastructure does not exist. Ontario built its electrical grid with self-sufficiency in mind, and its ability to meet electrical demand in Toronto depends on the wires that would carry power from Quebec.

Imagine that Ontario imported all the electricity from Quebec that it could. Interprovincial connections can carry 2,545 MW, or about 70 per cent of the capacity of the Darlington nuclear generating station. But once it crossed the provincial border, Quebec’s electricity would travel through Ottawa on power lines that more resemble a one-lane cart path than a four-lane highway. Upgrading these lines would cost hundreds of millions of dollars, and raise power bills accordingly.

Even if Ontario upgraded its lines, however, there remains the issue of Quebec’s export reliability. Hydro-Québec would not meet Ontario’s needs year-round.

In a May 22 letter to Ontario’s system operator, Hydro-Québec writes, “commitment periods need to take seasonal diversity into account.” Quebecers heat with electricity, making winter the season of peak power demand. Feeling a capacity squeeze last winter, and the winter before, Hydro-Québec asked its customers to turn down their thermostats. Even now, Hydro-Québec is issuing contracts to buy power for the next four winters. This hardly sounds like a reliable, year-round power supplier.

What can we learn from these realities? Do the homework, and don’t jump at too-good-to-be-true options.

There are reasons Ontario built its power system the way it did. It sought energy security and self-sufficiency. Ontario could have built a grid that relied on Quebec imports. Instead, it chose nuclear. Along the way, it gained a nuclear industry that has created thousands of jobs in Ontario.

Nuclear-generated electricity was the right choice for Ontario decades ago. It remains the right choice today.

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Gaia Theorist James Lovelock Turns 95

By John Stewart
Director, Policy and Research
Canadian Nuclear Association

Saturday will be James Lovelock’s 95th birthday. Lovelock is an English scientist, a commentator on change in our ecosphere, and the originator of the Gaia theory, which holds that the Earth is a self-regulating organism.

Rather than struggle by myself to write a fitting tribute, I have pulled out a copy of one of his more recent books, The Vanishing Face of Gaia (2009), to reprint a few choice quotes. If you haven’t read Lovelock yet, here’s a good start.

It was good to recognize the huge efforts of the Intergovernmental Panel on Climate Change and Al Gore with the Nobel Peace Prize. . . As we hold our meetings and talk of stewardship, Gaia still moves step by step towards the hot state. . . Perhaps we were celebrating because the once rather worrying voice of the IPCC now spoke comfortably of consensus. . . Do not suppose that conventional wisdom among scientists is similar to consensus among politicians or lawyers.  Science is about the truth and should be wholly indifferent to fairness or political expediency. . . It is said that truth is the first casualty of war and it seems that this is also true of climate change. . . the Kyoto Agreement was made more than ten years ago and we have done little more to halt climate change since then other than almost empty gestures. (pp. 4-8)

James Lovelock

James Lovelock.

In its way the green ideology that now seems to inspire Northern Europe and the USA may be in the end. . . damaging to the real environment. . . we will soon discover that nearly all of what remains of our countryside becomes the site for fields planted with biofuel crops, biogas generators and industrial-sized wind farms – all this when what land we have is wholly needed to grow food. Don’t feel guilty about opting out of this nonsense: closer examination reveals it as an elaborate scam in the interests of a few nations whose economies are enriched in the short term by the sale of wind turbines, biofuel plants and other green-sounding energy equipment. Don’t for a moment believe the sales talk that these will save the planet.  (p. 12)

Nuclear energy is by far the most effective way to reduce the emission of carbon dioxide. . . A wind farm of twenty 1 MW turbines requires over 10,000 tonnes of concrete. It would require 200 of these wind farms covering an area the size of Dartmoor to equal the constant power output of a single coal-fired or nuclear power station. Even more absurd, a full-sized nuclear or coal-fired power station would have to be built for each of these monster wind farms  to back up the turbines for the 75 per cent of time when the wind was either too high or too low. As if this were not enough to damn wind energy, the construction of a 1 GW wind farm would use a quantity of concrete, 2 million tons, sufficient to build a town for 100,000 people (and) release about 1 million tons of carbon dioxide into the air. . . Wind farms are hopelessly inadequate to the UK as a source of energy (and) costly and inefficient sources of energy. You will soon discover this when your electricity bills and taxes rise to pay for renewable energy we do not need. . . These bills are imposed upon us so that politicians can appear green and good. . . it does nothing for the Earth and will only add more stress. . . (pp. 16-18)

The plight of the British in 1940 [when Lovelock was 21] resembles the state of the civilized world now. At that time we had had nearly a decade of the well-intentioned, but quite wrong belief that peace was all that mattered. The followers of the peace lobbies of the 1930s resembled the green movements now; their intentions were more than good, but wholly inappropriate for the war that was about to start. (p. 20)

I think we fail to welcome nuclear energy as the one good and reliable power source because we have been grievously misled by a concatenation of lies. Falsehood has been built on falsehood and is mindlessly repeated by the media until belief in the essential evil of all things nuclear is part of an instinctive response. (p. 69)

What is remarkable about nuclear waste is that it fades away. In 600 years the high-level waste from a nuclear power station is no more radioactive or dangerous than the uranium ore from which it originated. Far more importantly, there is hardly any nuclear waste to worry about. The yearly output of waste from a 1000 MW nuclear power station is  enough to fill a London taxi. Now perhaps you see why I would welcome its burial at my home in Devon.  It would be a useful source of heat. . . The nuclear waste is a minor burial problem but the carbon dioxide waste will kill us all if we go on emitting it. (p. 70)

The Vanishing Face of Gaia

The Vanishing Face of Gaia, by James Lovelock.

My wife Sandy and I live in a remote part of England. . . our BlackBerry mobile telephone keeps us always in touch. What madness it would be for us to reject the chance to communicate because we feared cancer from the microwave radiation of mobile telephones. But this is what more than half of us do nationally by rejecting nuclear energy on the same insubstantial grounds. (p. 73)

The cash flow of nuclear industry is tiny compared with that of oil, gas or coal companies, and the money available for advertising the advantages of nuclear is proportionately less. . . If an engineer in a Japanese nuclear power station drops a wrench on his foot and needs first aid it is given headline exposure in our newspapers as a “Serious accident in Japanese nuclear power station.” The death of a hundred or more Chinese miners in an underground coal mine explosion rates not more than a small paragraph in the depths of the same paper. What I have just written is no exaggeration. (p. 76)

I applaud our present Prime Minister, Gordon Brown, for having the strength and wisdom to start rebuilding nuclear energy. It must have taken guts to go against the political pressures from Europe and those members of his party still reliving the fun of marching to Aldermaston proclaiming the need to make Britain a nuclear-free zone. (p. 90)