ontario nuclear: debunking costs

Ontario nuclear: Debunking costly myths is not what Coalition proponents of nuclear power want to hear. The subsidies for citizens’ electricity bills exceed $7.3 billion a year from general revenue. The data contradicts the Coalition’s claim that nuclear reactors would drive power prices down in Australia. 

You couldn’t make this up
Prof Mark Winfield, York University, Canada

Eelectricity prices are highly regulated in Ontario, Canada. Nuclear power generators don’t need to recover their costs via a competitive wholesale market. Consumers pay a specific regulated levy to pay to Ontario Power Generation for it to recover the costs associated with its nuclear power plants. The decision and order EB-2020-0290 sets out the total amount Ontario Power Generation can recover from consumers each year from 2022 to 2026. The total nuclear payments range from $CAD104 to $CAD118/MWh over 2022-2026. This is for nuclear power plants built several decades ago. Most of the construction cost was written off as unsustainable debt. 

Ontario embarked on a massive building spree between the 1960s and the 1990s. As Winfield says in 2024, “Private capital won’t touch it and the cost curve just keeps getting steeper – unlike renewables and batteries”. The government of Ontario is planning to commit the province to a $100 billion nuclear construction and reconstruction program.

Australian Coalition Leader  Misinformation

“In Ontario, that family is paying half of what the family is paying here in Perth for their electricity because of nuclear power,” “Why wouldn’t we consider it as a country?”
Mr Dutton, March 2024

In July 2024 he said “Canadian consumers paid about one-quarter of Australian prices for electricity.”

SMR are Expensive

Ontario is planning for new generation. The four small modular reactors (SMRs) are currently planned. They have no license . There are no existing SMR approved. Existing nuclear power station sites in Ontario are headed for a $25 billion-plus price tag. That is for a total generation capacity of 1.2 GW, the equivalent of a single large coal-fired power station, and only about a 5 per cent of the outgoing coal generation capacity (21GW) which Australia needs to replace over the next decade or so.

Assessing Risks of Catastrophic Accidents 

The estimate for a catastrophic accident at a nuclear plant is “$2 trillion for a Fukushima type accident” at one of Ontario’s major reactor sites according to Winfield. “In terms of liabilities, governments also assume ultimate liability for waste management and decommissioning costs. And fundamentally, I mean, unless governments de-risked this, there is no way private capital will touch it.”

Raising Costs to Australians

A switch to nuclear energy would increase the median power bill for households with two people by $665 per year and $1000 per year for 4 people. The Institute for Energy Economics and Financial Analysis summary modelling image is shown below.

Ontario nuclear power subsidies
Summary from IEFFA 2024 [4]

References

  1. You couldn’t make this up’: Expert pans Ontario nuclear option https://www.smh.com.au/environment/climate-change/you-couldn-t-make-this-up-expert-pans-ontario-nuclear-option-20241028-p5klx1.htm
  2. The only curve for nuclear energy is an ever steeper cost curve. Murray Hogarth 2024 https://thefifthestate.com.au/columns/columns-columns/the-nuclear-files/the-only-curve-for-nuclear-energy-is-an-ever-steeper-cost-curve/
  3. Nuclear power would raise household power bills by $665 a year 2024 https://ieefa.org/articles/nuclear-power-would-raise-household-power-bills-665-year
  4. Nuclear in Australia would increase household power bills 2024 https://ieefa.org/resources/nuclear-australia-would-increase-household-power-bills
  5. Ontario Energy Board. Regulated Price Plan. 24 March 2024.  https://www.oeb.ca/sites/default/files/fact-sheet-rpp-20240324.pdf
  6. Ontario Energy Board. Decision and Order EB-2020-0290. 15 November 2021. https://www.oeb.ca/node/3204
  7. Ontario Energy Board issues decision on Ontario Power Generation’s application for payment amounts  2021 https://www.oeb.ca/newsroom/2021/ontario-energy-board-issues-decision-ontario-power-generations-application-payment