The nuclear power plants that generate about 60% of Ontario's electricity will continue to provide good value to the province's ratepayers even when costly refurbishments are taken into account, a government financial watchdog said.
The cost for nuclear power in Canada's most-populous province will average C$80.70/MWh through 2064, the Financial Accountability Office, or FAO, said in a report released Nov. 21. Nuclear power prices will average C$69/MWh in the year that spans May 2017 to April 2018, second only to hydroelectricity prices, which will average C$58/MWh in the same period, the report said.
The province gets its nuclear power from two nuclear operators, government-owned Ontario Power Generation Inc. and Bruce Power LP, which leases reactors from Ontario. Consumers have raised concerns about the cost of refurbishment programs at both companies, which will be borne by ratepayers, because of past overruns at Ontario Power facilities. Both companies have refurbishment projects underway. The FAO expects prices to peak during the refurbishments.
"The FAO projects that the nuclear price will be higher than the average price of [C]$80.70/MWh during the majority of the time that reactors are being refurbished from 2016 to 2033," the report said. "The nuclear price is expected to peak in 2027 at [C]$95.40/MWh and then gradually fall [in real terms]. Once the refurbishments are complete, the FAO projects a lower than average nuclear price."
Ontario Power started a C$12.8 billion refurbishment of its Darlington station near Toronto in October 2016. The company said in a separate statement that the project is about 40% complete after its first year and remains on time and budget. Bruce Power's C$13 billion program began in January 2016 to refit six of its eight reactors, with major component work starting in 2020.
Nuclear generation has become an important source of electricity in Ontario since the province introduced aggressive climate change-mitigation programs that included increasing reliance on renewables and shuttering Ontario Power's coal-fired plants. The current cost of power in the province, which includes rate riders to cover the cost of renewables, is about C$114.90/MWh, the FAO said.
"Overall, despite near-term nuclear price increases, the Base Case Plan is projected to provide ratepayers with a long-term supply of relatively low-cost, low-emissions electricity," the report said.
