NUCLEAR RENAISSANCE WILL DELIVER CHALLANGES
Toronto Star - Tyler Hamilton - Aug 11, 2007
OPG wants to build at least 1,000 megawatts of new nuclear capacity just east of
Darlington Generating Station, which is run from this control room.
The water is blue, deceptively inviting as Gregory Smith gazes into a fuel bay
at Darlington Generating Station, the youngest nuclear power plant in Ontario's
aging fleet.
Inside, hundreds of bundles of nuclear fuel rods, each of them hot and highly
radioactive after 18 months of service, are neatly stacked in an
eight-metre-deep cooling pool and remotely monitored by video camera, 24-hours a
day, by the International Atomic Energy Agency.
"It's not in the air, not in the (ground) water. It's all right here," says
Smith, senior vice-president of nuclear generation development at Ontario Power
Generation, extolling the virtues of having nuclear pollution under a strict and
watchful eye - unlike coal-plant emissions that are dispersed into the air.
Still, the image of a nuclear waste pool makes many seethe. What if there's an
accident? An earthquake? Or a plane crash that sends toxic radioactive particles
into the air? And how can we guarantee this dangerous nuclear waste won't end up
in the wrong hands 50, 100, 1,000 years from today?
Such questions aren't new, and neither is the moral debate over whether nuclear
power should be shunned for its potential dangers or embraced as an
emission-free answer to global warming. Both sides have entrenched views, and
Smith isn't likely to change that.
Besides, the OPG executive has more immediate concerns.
The McGuinty government announced last June that it intends to build at least
1,000 megawatts of new nuclear power capacity in the province as part of its
20-year electricity plan. It's Smith's job to build that capacity - possibly
much more if a decision is made to not refurbish four older reactors at
Pickering B generating station.
It won't be easy. If the "nuclear renaissance" emerges as many energy experts
predict, finding the raw materials, components and skills necessary to meet
Ontario's nuclear needs could prove tricky, and more expensive than authorities
are banking on.
On top of cost, completing such projects on schedule is shaping up to be a
logistical nightmare. All Ontario coal plants are scheduled for shutdown by
2014. A number of existing nuclear reactors must be refurbished or replaced over
the coming 15 years. Bringing one power plant or reactor online while another
goes offline will be a delicate balancing act, made more complicated by the
international rush for scarce and increasingly costly resources.
"It's going to be a huge challenge," Energy Minister Dwight Duncan told the
Star. "There are limited suppliers of nuclear technology, there are incredible
demands worldwide, and Ontario is a relatively small player in that
international market."
With 250 new nuclear reactors at various stages of development around the world,
guaranteeing supply of something as simple as concrete becomes a monumental
task. "There are simply not enough resources to meet that demand."
The issue isn't isolated to the nuclear industry; the entire energy sector is
feeling the resources crunch, particularly as China moves aggressively to power
its own economic growth. The cost of concrete, steel, copper, nickel and other
metals has skyrocketed. Skilled trades workers are harder to find, particularly
as a large swath of "boomers" approach retirement. Transportation costs are
rising because of increased fuel costs.
This is having an impact on the budgets and schedules of oil sands, refinery,
coal plant and even wind-farm projects, which are competing against each other
and the revival in nuclear construction. And the nuclear industry has a history
of low-balling costs. "Studies of the accuracy of cost estimates for pioneering
technologies have found that estimates are consistently low," says a U.S.
government report.
Even over-inflated uranium prices are affecting the long-term operating costs of
nuclear plants.
South of the border, where 28 new reactors based on next-generation nuclear
technology are planned, Wall Street isn't ready to take on the risk. Power
companies are telling the U.S. government that projects won't get financing
unless Washington ponies up $50 billion (U.S.) or so in loan guarantees. In
other words, if projects implode, U.S. taxpayers will have to cover bad loans.
And that's on top of subsidies already granted, including billions of dollars in
tax credits and insurance to cover licensing delays.
Kevin Routledge, president of AMEC NCL and project director for the Bruce A
reactor restart project, says problems with the nuclear power market include
many highly specialized components, stringent quality requirements and few
global suppliers.
"You're looking at supply chains where there's only one or two suppliers in the
world," he says. "If you're seeking to get orders now you have to get into the
queue, you have to pay, and you're looking at substantial lead times."
There's already a six-year waiting list for steel forgings that meet nuclear
standards, OPG's Smith points out. For some components there's one supplier in
Germany.
"There are 38 people proceeding with the process of building new reactors, and
only about a fourth of them have actually placed orders, so as more and more of
those orders come the line will get longer," says Smith, noting Ontario won't
place orders until late 2008 or early 2009. Routledge says tight supply could
ease as the industry ramps back up, and as countries such as China begin
manufacturing their own components - though maintaining high quality will remain
an issue.
Perhaps more concerning is the worsening skills shortage. Boilermakers,
ironworkers, welders and other trades are in hot demand, and aging demographics
are lowering the supply. Workers have their choice of projects and are in a
position to demand higher pay.
"This is going to be the battleground," says Routledge. "It's a big issue, both
on the trade side and professional side."
Duncan said all these risks explain why Ontario - about to embark on a 20-year
juggling act involving nuclear, coal, natural gas and wind power - will require
guaranteed schedules and fixed prices.
"There will be challenges along the way, but we're the first government to move
in a decisive fashion."