Reactor Contract Details On Way

Queen's Park is expected to announce how it will go about selecting technology for the construction of new nuclear reactors in Ontario, with the aim of making a final selection by the end of the year.

The process will involve a request for quotation, or RFQ, from a short list of qualified bidders, and the creation of a government panel that will determine the best deal for Ontario, sources say.

While the short list is likely to include federally owned Atomic Energy of Canada Ltd. and its Advanced Candu Reactor design, or ACR 1000, the Crown corporation won't get special treatment against foreign rivals such as France's Areva SA and U.S. nuclear giant Westinghouse Electric Co.

"There will be a process that doesn't favour anyone," said one industry source.

"There will be no head start for AECL."

AECL has been counting on a home-team advantage, and Ottawa has been pressuring Ontario to buy domestically as the province embarks on a $40 billion overhaul of its nuclear fleet.

Failure to land a deal in Ontario, which has the largest fleet of Candu reactors in the world, would be a major blow for the company and its plans to sell reactors overseas.

An official from the ministry of energy confirmed that an announcement was coming but would not provide details.

"Stay tuned," said Alan Findlay, a spokesperson from the office of Energy Minister Gerry Phillips.

The short list will come out of nine initial designs jointly assessed by nuclear plant operators Ontario Power Generation and Bruce Power, and in a separate analysis by consulting firm McKinsey & Co.

Many in the nuclear industry were expecting an announcement at the Canadian Nuclear Association's annual gathering in Ottawa, but the date appears to be a moving target.

"Even people who know are not too sure," joked Armand Laferrere, president of Areva Canada.

But Peter Wallace, deputy minister of energy, assured attendees that the details would be coming shortly and that the process would be "fair and competitive."

Seemingly anticipating the news, AECL and its partners in "Team Candu" held a press conference to promote the economic benefits of purchasing the ACR 1000 in Ontario.

Company chief executive Hugh MacDiarmid said that landing a sale in Ontario was a "destiny issue" for the company, which is up against larger, deeper-pocketed foreign rivals.

Two or three reactor designs will make it on the short list, according to the Canadian Nuclear Safety Commission in a 2007 memo, obtained by Greenpeace Canada through a freedom-of-information request.

The memo indicates that the Ontario government will make a final decision in December 2008.

Shawn-Patrick Stensil, who follows the nuclear industry for Greenpeace Canada, said that creating a short list will speed up the environmental assessment process for new reactor projects that have been proposed by OPG and Bruce Power.

Submitting and reviewing information on three rather than nine designs will save time and money, he said.

But he urged the government to be as open as possible.

"Given any contract will lock the province into the liabilities and risks of running a certain reactor design for almost a century, we should definitely have transparent and accountable decision making," said Stensil.