ONTARIO HYDRO AND THE ELEPHANT IN THE ROOM

Posted: June 10, 2014 in Current Events, Election, Environment, Personal Whining, politics, Statistics and Lies

The Ontario Hydro power situation in this province is a huge complicated mess. There is no doubt that the Liberals have mismanaged some elements of it, but I’m not sure that any party would have been able to do things much differently. Like most things, it is a not a straight forward analysis.

Over thirty years ago the environmental group I belonged to clearly stated that twenty to thirty years down the line the Ontario public would be paying far higher prices for their power. There were two primary reasons. The first was that much of our petro-chemical consumption was subsidized by the government through tax breaks, hidden costs rolled into taxes, and even direct subsidization. On the Federal level we see it more clearly with the Oil Sands, but it happens at the provincial level as well. Cheap energy was an illusion. When the nuclear power plants entered the picture this became even more the case. This is the second reason, and to properly understand it requires a little history and perspective.

Canada admittedly has one of the best nuclear programs in the world. Our CANDU reactors are heads above others in safety. Even so, the drawbacks of nuclear power are legion, and some of the principle ones are economic. Power plants have a phenomenal construction price tag attached to them, not to mention regular maintenance. The original cost forecast for Darlington plant, for example, was $3.9 billion, and it finished at $14.4 billion. That’s just the construction. It doesn’t include any of the other costs that are associated with the lesser known cradle to grave life of a nuclear power plant. The government costs associated with uranium mining were huge, not to mention the environmental catastrophe that is now being swept under the rug as a retirement community in Elliot Lake. The processing of uranium into fuel grade material was primarily done at Port Hope, and is associated with huge costs related to having to move radioactive, contaminated soil. According to reports, it is still being cleaned up and still being paid for with tax dollars. Storage of spent fuel bundles, highly radioactive and toxic, is still an ongoing question. Promised storage facilities in Northern Ontario have not materialized (although it is not certain that they would be desirable anyway). Currently this highly dangerous waste material is being stored in swimming pool like enclosures near the shore of L. Ontario. And finally, nobody wants to talk about the decommissioning of the nuclear power plant. What do you do with a radioactive mausoleum after it is no longer usable? Does it just sit there for the next 2 000 years?

Like so many other things, many of the costs associated with nuclear power are hidden, and this doesn’t even consider the billions of dollars that were spent on research and development. It was a long, expensive and rocky road which is very much related to current energy costs and the situation at Ontario Hydro. And regardless of the relative quality of CANDU reactors, the plant, and especially the peripheral elements of the industry, are far from safe. As we have seen in Fukushema, we can never be prepared for all possible situations, and when you’re talking about nuclear energy, the stakes are high.

When the anti-nuclear protesters were active 30 – 40 years ago, Climate Change was not a well know issue and factor in the environmental equation. In light of the carbon emitting alternatives, a lot of modern environmentalists claim that nuclear is inevitable, and they may be correct in the short term. However given climate change and the danger of nuclear power, it is only reasonable that alternative energy sources and the real power of energy efficiency/conservation be examined seriously.

Our federal Conservatives, through PM Harper’s recent statements about Global Warming, asserting that no country can realistically be expected to take step regarding Climate Change if it will interfere with jobs or economic growth, have made it very clear where they stand. They are willing to kill their grandchildren in order to allow themselves and their children to prosper. They are giving the middle finger to the future, more concerned about current economic growth than the well being of future generations or addressing probable future environmental catastrophes. This should not be a surprise. It is very much a Conservative ethic of taking care of current business interests and the power elite.

The Ontario Liberals took a chance on the future, encouraging and supporting a fledgling wind a solar industry. There may have been some errors, but compared to the investment and the travesties of the nuclear industry, it’s nothing. After the $14.9 billion Darlington plant came on line, it was exporting surplus energy at a loss to the U.S. for years. It’s nothing new. It is part of the growing pains of a new industry. And it is a support of growing pains that requires government intervention. Standing in the shadow of nuclear and petro chemical, alternative energy doesn’t have a fair chance. Competing with two other established sources of energy, each with their own serious drawbacks, alternative energy doesn’t have a fair chance. Like nuclear, when it first was introduced, it requires government funding at both the research and the implementation level to get a foothold. In the case of nuclear, that was very much shared by the federal government. Today, that’s highly unlikely considering that the federal Conservatives are so totally in bed with the oil industry. When Harper says that no country will take action on climate change if it threatens jobs and economic growth, read that as “if it threatens the oil industry”. If the federal government cared more about the future or the environment than they did their big business friends, there would be a national funding of alternative energy research and implementation. Other countries have done this, but they are, suspiciously, not countries that have large oil interests.

But most importantly, here is a quote from an article titled “Clean Energy Myths in Ontario”.

A comprehensive analysis comparing a green power portfolio to building new nuclear plants found that renewable power would be significantly less expensive than new nuclear, $13.5/MWh for green vs. $20/MWh for nuclear. Rates paid for wind and hydro power under the feed-in tariff system are lower than the cost of new or retrofitted nuclear power – 13.5 cents/kWh for wind vs. 19-37 cents/kWh for nuclear. Ontario is still paying for past nuclear cost overruns. The province has collectively made $19.6 billion in payments on the old Ontario Hydro’s “stranded debt” and still owe another $14.8 billion. Every nuclear project in Ontario’s history has gone over budget and over schedule. On average, final costs have been two-and-half-times the initial estimated cost. The vast majority of current hydro bill cost increases have nothing to do with green energy contracts, but are mostly the result of overdue transmission system upgrades, – See more at: http://climateactionnetwork.ca/issues/clean-energy/clean-energy-learning-centre/myths/##electricity_rates.

 

I’m sure that mistakes are being made in the alternative energy sphere. It would be interesting to see what kind of mistakes or dead ends are being stacked up by the Oil Sands and to what degree those mistakes are being bankrolled by tax dollars or tax breaks. I’m sure that Oil companies can just write them off. Having researched it carefully decades ago, I can tell you with confidence that the dead ends and waste in the nuclear industry would boggle your mind.

It is not fair to spotlight the troubles encountered by alternative energy without understanding that both oil and nuclear did and do have similar issues, hidden by time and the convoluted accounting of Goliath corporations. Alternative energy becomes a scapegoat. Wind provides only 3.5% of all of the generating capacity for Ontario. As you’ve seen above, nuclear is a proportional behemoth. How can anyone take seriously that alternative energy initiatives in Ontario are responsible for huge increases in power bills. Costs sited for alternative energy development often include billions for building new hydro transmission towers and lines, as if those wouldn’t have to be built or replaced anyway. New hydro lines compared to new or retro-fitted nuclear plants? Which do you think costs more? The pattern is always to compare the existing problem to another situation where the problems are hidden. Publications like the Financial Post betray their bias in articles about energy when they claim that companies like Magna and Caterpillar had to close their doors because of high taxes, knowing full well that Ontario has one of the lowest corporate tax rates around.

Once again this is not to say that parts of Ontario Hydro aren’t broken. Their billing system is completely out of control. I know several households that have not received hydro bills for over a year. (They’re in for a surprise when Hydro catches up!) General administration seems to have been in chaos for the past 8 years or so, and needs to be cleaned up. Other problems exist as well. But a very large part of it is having to finally pay the piper, just as was predicted decades ago.

However, when talking about energy costs, the elephant in the room tends to be ignored.

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