Earlier today, the provincial Financial Accountability Office (FAO) released a report assessing the financial risks associated with Ontario’s Nuclear Refurbishment Plan. The plan pertains to refurbishing ten nuclear reactors at Darlington and Bruce Power and extending the life of Pickering, at an estimated total capital cost of $25 billion.
The Honourable J. David Wake, Ontario’s Temporary Financial Accountability Officer, has released An Assessment of the Financial Risks of the Nuclear Refurbishment Plan.
The Province plans to refurbish 10 nuclear reactors at the Bruce and Darlington Nuclear Generating Stations, and extend the life of six reactors at the Pickering Nuclear Generating Station. The FAO’s report reviews how the nuclear refurbishment plan will impact electricity ratepayers and the Province, and identifies how financial risk is allocated among ratepayers, the Province, Ontario Power Generation and Bruce Power.
If the nuclear refurbishment plan is executed as planned, the FAO estimates that nuclear generation would supply a significant proportion of Ontario electricity demand from 2016 to 2064 at an average price of $80.7/MWh in 2017 dollars. Nuclear prices are projected to increase in the near term while the reactors are being refurbished. The price is projected to peak in 2027, and then gradually decrease (in 2017 dollars) as the refurbished reactors return to service. Overall, the nuclear refurbishment plan is expected to provide ratepayers with a long-term supply of relatively low-cost, low emissions electricity.
The nuclear refurbishment plan requires a $25 billion upfront capital investment and price projections are based on costs being spread over a large amount of electricity generation over a long period of time. The FAO reviewed four key financial risks to the nuclear refurbishment plan and assessed how the impact of those risks, if realized, would be allocated to ratepayers and the Province. The risks reviewed by the FAO were refurbishment cost overruns, higher than anticipated station operating costs, lower than expected electricity demand, and the potential for a lower-cost, low emissions alternative generation option to emerge.
To learn more about how the risks to the nuclear refurbishment plan could affect ratepayers and the Province, click here for the FAO’s report.