Ontario weighs nuclear options

Ontario's "green" energy minister has made clear that the province is not deterred from its plan to build a new nuclear plant at the Darlington generating station east of Toronto. The goal is to get shovels in the ground by 2012 and have a plant up and running six years later.

Federally owned Atomic Energy of Canada Ltd., France's Areva SA and U.S.-based Westinghouse Electric Co. have spent the past year preparing their bids for the Ontario contract, which calls for the construction of a two-reactor nuclear plant that can supply between 2,000 and 3,500 megawatts of power to the grid.

Final bids are expected "pretty soon," said Lorne Burger, a spokesman for Infrastructure Ontario, the agency that is overseeing the bidding process.

"Our expectation is that we'll be accepting bids from all three vendors."

Burger was cagey when asked for a specific deadline, saying only that the date is known but won't be revealed publicly.

Sources say Feb. 27 at 2 p.m. is the official deadline, but another delay is always possible.

Under the government's original schedule, the winner was supposed to be chosen back in December. That has been extended to sometime this spring. Until then, all participants are under a communications ban and can't talk about their proposals.

There's much on the line.

It's the first time AECL has had to participate in a competitive process on its home turf. The troubled crown corporation is also fighting for its survival, given that a snub in Ontario would make it difficult to sell its next-generation reactors worldwide.

At the same time, Ontario has been burned by the cost overruns and delays of nuclear projects in the past – it doesn't want to be burned again.

The province wants to offload as much financial risk as possible to avoid a repeat of the past.

"It's going to be a political choice in the end," said Glenn Harvel, associate professor of nuclear science at the University of Ontario Institute of Technology.

"All three companies have produced nuclear reactors, so we know they're capable.

"It's not a question of will the product work, it's a question of how much time or how much money it's going to take to get it to work," he said.

Other issues are also unsettled.

Ontario has been anticipating steady annual growth of electricity consumption as part of its long-term planning strategy, but since 2006 power use in the province has actually fallen every year.

The trend is expected to continue this year and into 2010 – possibly longer as the economy struggles to recover from a recession that has pummelled the province's energy-intensive manufacturing sectors.

Falling demand for power, combined with a Green Energy Act that's expected to accelerate deployment of renewables, has some groups asking whether a new nuclear plant is even needed.

Other groups argue that the push for electric vehicles, combined with economic recovery, makes nuclear power more indispensable than ever.

Meanwhile, the cost of nuclear power plants has soared since Ontario's power-planning agency conducted its first cost projections, which were based on 2006 data. A number of utilities in the United States, including Entergy, Progress Energy, and Florida Power & Light, have found that cost estimates for new plants are coming in two to three times higher than originally projected.

The range of estimates over the past year puts the price of a new plant in Ontario, depending on its size, at between $10 billion and $20 billion.

All eyes will be on Smitherman for signs of sticker shock when the final bids come in.