Tag Archives: Hydro-Quebec

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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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

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.

CNA Responds

Closure of Gentilly-2 Nuclear Generating Station

Hydro-Québec has confirmed the Gentilly-2 nuclear power plant which has been operating safely and reliably since 1983, will stop producing electricity on December 28, 2012. This follows the September 20 announcement by the Government of Québec on its decision to shut down Gentilly-2 rather than proceeding with a refurbishment.

“The Canadian Nuclear Association is disappointed with this decision. The Gentilly-2 Nuclear Generating Station employs roughly 800 people in stable, well trained, well-paid jobs, and powers the equivalent of 275,000 households in Québec,” said Association President and CEO, Denise Carpenter.

The increase in project costs, combined with falling market prices prompted Hydro-Québec to recommend to the Québec government that the generating station be closed. In light of the feedback it has obtained on the complete refurbishment cycle, the company has reassessed the cost of the project to $4.3 billion.

“Hydro-Québec made a decision based on their plant and their economics, for a plant that supplies three per cent of their demand,” continued Carpenter. “However, new project costs are subject to interpretation considering other refurbishment projects in Ontario, where nuclear supplies almost 60 per cent of demand, have lower estimated costs.”

Candu Energy Inc. President and General Manager, Kevin Wallace, has stated Candu Energy Inc. believes the government’s decision to close the Gentilly-2 nuclear facility was made before all options were considered. Candu also hopes that the government will reconsider its decision and engage in further dialogue on a possible lease agreement with a partner to refurbish, operate and potentially decommission the plant.

Despite this announcement, Canada’s nuclear industry is strong and moving forward. In Ontario, nuclear is an integral part of the electricity supply and is expected to continue to account for 50 per cent of the province’s energy supply as indicated in the Government’s Long-Term Energy Plan. For example, a decision to issue a licence to prepare for the new units at the Darlington station was announced in August 2012, and one of the most complex engineering challenges in Ontario’s history of infrastructure is coming to a successful conclusion as workers at Bruce Power prepare to return Units 1 and 2 to commercial service.

The Canadian nuclear industry provides a broad spectrum of products and services that benefit Canadians, generating approximately $6.6 billion per year and contributing $1.5 billion in tax revenue and $1.2 billion in export revenues, and supports over 71,000 direct and indirect jobs.

Background:

Candu Energy statement on decision to close Gentilly-2 nuclear facility in Quebec (October 3) 

Hydro-Québec Confirms Gentilly-2 Closure at the End of 2012 (October 3)

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Nuclear Power as a Foundation for a Sustainable Energy Future

Recently we were asked by the Canada West Foundation (CWF) to provide a guest blog post about nuclear for their Let’s Talk Energy blog — an initiative under the CWF’s Powering Up for the Future project. The post is basically a nuclear primer for an audience which may not be familiar with all of the benefits and contributions of the technology.

Let us know what you think!

Nuclear Power as a Foundation for a Sustainable Energy Future

Originally posted at Let’s Talk Energy

Given recent events in Japan, the first thing that anyone wants to know about Canadian nuclear is: Is it safe? The answer is yes, and I’ll tell you why.

Safety is our number one priority. Canada’s nuclear power operations have a proven track record of being among the safest in the world. They are highly monitored, stringently regulated and continuously improved through the daily efforts of qualified professionals who are committed to ensuring public safety. In over 45 years of operation there has not been a single significant incident at a Canadian facility.

Our industry continues to make investments and improvements as part of our ‘Safety First’ culture. In response to the Fukushima accident, Bruce Power has taken concrete action on a number of fronts following the events in Japan. For example, they recently announced the re-organization of their emergency response organization, which involves approximately 400 employees who form the basis of their industry-leading emergency response capability. Building on lessons learned from the Fukushima event is a top priority for our industry.

At Ontario Power Generation (OPG), a four-month examination of its nuclear operations following the events in Japan uncovered no major safety issues. OPG carefully studied the safety of its facilities and re-evaluated the potential of unlikely events such earthquakes, severe flooding, tornadoes, hurricanes, fire and ice storms having major impacts on nuclear operations. The studies showed that the plants continued to be safe, but as part of continuous improvement OPG will make investments to increase safety margins during these unlikely events. This includes accelerating the installation of hydrogen recombiners and the purchase of additional back up generation and diesel pumps.

Currently there are 17 operational CANDU reactors in Canada that supply 15% of all electricity in Canada. This 15% means the potential emission of 90 million tonnes of greenhouse gases each year is avoided. Imagine, without nuclear power, if that same amount of electricity was fossil-fuel generated, Canada’s total GHG emission would increase by a whopping 12%.

Canada’s nuclear facilities are located in Ontario, Quebec and New Brunswick. Communities in these provinces are benefiting not only from an available, reliable and clean source of energy, but an affordable one as well. According to studies conducted by the Organisation for Economic Co-operation and Development (OECD), a multi-country organization working to further growth and development of its member nations, the overall cost to the consumer of nuclear power over the life of a nuclear power facility is similar to that of large-scale hydro, natural gas and coal, and much lower than wind and solar.

What about the rest of the country, you might be wondering. What are the benefits of nuclear for the rest of the country not currently powered by nuclear? Power generation is only one of the many great things about nuclear, and it isn’t only Canadians who benefit from the Canadian nuclear industry, both today and historically, what with the countless Canadian innovations in the field.

The Canadian nuclear industry provides a broad spectrum of products and services that benefit Canadians and people around the world. The application of nuclear science improves the health and well-being of us all through nuclear medicine and food safety technologies. Innovation in nuclear science is also being applied to address a number of societal challenges such as public health and transportation.

Our nuclear industry is made up of over 70,000 Canadians employed directly or indirectly in exploring and mining uranium, generating electricity, advancing nuclear medicine, and promoting Canada’s worldwide leadership in science and technology innovation. Through the efforts of these Canadians, our nuclear industry is a $6.6 billion per year industry, contributing $1.5 billion in tax revenues and $1.2 billion in export revenues.

Our commitment to public safety and environmental stewardship includes the safe, secure and responsible long-term management of all of the used fuel produced by Canadian nuclear power plants.  Used fuel is initially stored in secure water-filled bays on site of the nuclear power plants for 5 –10 years. It is then placed in large concrete and steel containers safely stored on site. In order to address the long-term care of Canada’s used nuclear fuel, the Nuclear Waste Management Organization (NWMO) was established by nuclear energy producers in 2002 in accordance with the federal Nuclear Fuel Waste Act.

NWMO has worked with industry, research and government organizations to develop a management approach for the long-term care of Canada’s used nuclear fuel, including development of a deep geological repository in a suitable rock formation. Initial stages of the plan are now being implemented. NWMO’s plan and its implementation is highly monitored and regulated by the Canadian Nuclear Safety Commission to protect the health, safety and security of people and our environment. In fact, radioactive waste facilities are monitored by the licensees and by the provincial and federal authorities, and they are kept extremely secure.

Let’s see, we’ve covered: safety, zero-emission power generation, affordability, contributions to medicine, heath, science and technology innovation, various industries, and the Canadian economy, and talked about how we clean up after ourselves. These reasons all illustrate why nuclear energy should be considered not only in the discussions about a Canadian energy strategy, but also as a component for a sustainable energy future.

I’d love to continue this discussion with you. We have a blog at TalkNuclear.ca and we talk nuclear on Facebook and Twitter. Come join the conversation about all things nuclear and energy related.

If you want to know more about the daily benefits of nuclear beyond energy generation, visit our new microsite. Find out how the future is NU.

Originally posted at Let’s Talk Energy

 

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Canadian Nuclear Worker Newsletter September 2011

A Publication of the Canadian Nuclear Workers’Council

This issue includes:

  • Message from the President
  • Five-Year License Renewal for Hydro Quebec
  • Point Lepreau Refurbishment Makes Progress
  • CNWC Hall of Nuclear Industry Leaders
  • Clarington Receives Good News from OPG
  • Cameco Updates Port Hope Community
  • Bruce Power Achieves Major Milestone
  • In short…

Download a PDF of the September issue of the Canadian Nuclear Worker newsletter

CANADIAN NUCLEAR WORKER
is published four times a year by the
Canadian Nuclear Workersʼ Council,
244 Eglinton Avenue East,
Toronto, Ontario M4P 1K2.