Pickering nuclear station shuts down for refurbishment, raising fears of higher power prices

Pickering Nuclear Generating Station’s Unit 5 reactor shut down Tuesday, the first step in taking Canada’s oldest nuclear power plant offline for a lengthy overhaul.

All four operational units at the station, located east of downtown Toronto, are scheduled to come offline before Sept. 30 to undergo an extensive, $26.8-billion refurbishment. The Ontario government said in a statement that construction work began Monday; the station’s owner, Ontario Power Generation, said work on Unit 5 is expected to begin early next year.

The Pickering B units, which OPG says produce about one-10th of the province’s electricity, are expected to return to service between 2031 and 2034. Until then, the provincial government expects gas-fired plants will step up to provide a larger portion of Ontario’s power.

Four Ontario nuclear reactors taken off-line ahead of Pickering station’s refurbishment

That expected increase in gas-fired generation has raised fears from some quarters that Ontario’s electricity prices are poised to skyrocket.

Unlike residential consumers, who pay fixed rates for electricity set by the Ontario Energy Board, large businesses and industrial users typically pay wholesale prices that change throughout the day. Natural gas generators generally incur higher marginal costs, which increase wholesale prices.

Brad Duguid is president of the Association of Major Power Consumers in Ontario, which counts among its members large automakers such as Ford Motor Co. and Toyota Motor Corp., and steel producers Stelco and ArcelorMittal Dofasco. He said large industrial users experienced extraordinary price hikes last winter; Pickering’s shutdown promises to make this winter even worse.

“We are critically concerned that we’re going to see unprecedented price spikes during that period when all of the natural gas generators will have to run to fill the gap of Pickering’s generation,” he said.

“The average mortgage in Ontario was about $3,000 a month. Imagine if that increased by 165 per cent. Suddenly, you’d be paying $8,000 a month just to stay in your home. That’s what industrial consumers are experiencing.”

AMPCO has lobbied the provincial government to create a new program that would lower electricity rates for large industrial consumers. In a letter to Premier Doug Ford and three of his ministers in August, Mr. Duguid urged them to introduce that program before this winter.

Mr. Duguid also recommended that Ontario’s Emissions Performance Standards be adjusted so that carbon costs associated with natural gas-fired generation would be reduced or eliminated from the electricity prices paid by industrial users.

“We are thankful that the province appears to recognize the magnitude of the problem,” he said, adding, “We’re running out of time.”

AtkinsRealis joint-venture to refurbish unit of Pickering nuclear power plant

In a statement, Noah Mawji, a spokesperson for Energy Minister Stephen Lecce, cited existing rate mitigation programs for large industrial consumers.

“We continue to support Ontario’s industries through programs like the Industrial Conservation Initiative,” he wrote.

“We are also calling on the federal government to work with provinces to eliminate industrial carbon pricing, which would save large industrial consumers approximately 10 per cent on their electricity bills.”

Until 2020, three nuclear plants – the Pickering, Darlington and Bruce stations – generated more than 60 per cent of Ontario’s electricity. But that proportion has steadily fallen as reactors have been removed from service, either permanently or for years-long overhauls, according to data from the Independent Electricity System Operator.

Forecasts from IESO suggest the province will have enough reserve generation capacity to comfortably weather periods of peak electricity demand. New energy storage and gas-fired generation have been added to the provincial grid in recent years, partly in preparation for Pickering’s refurbishment.

While AMPCO supports the refurbishment, several activist groups oppose it. In a submission to the Canadian Nuclear Safety Commission last month, the Canadian Coalition for Nuclear Responsibility said the cost is “prohibitively expensive” compared with alternatives, and the station’s continued operations would expose nearby residents to “unreasonable” risks.

In a statement Tuesday, the Ontario Clean Air Alliance pointed to previous overhauls at Pickering in the 2000s, which went significantly over budget. The organization said the refurbishment “is the energy equivalent of rebuilding your 1986 Ford Taurus. … Unfortunately, Pickering has been about as reliable as an aging Taurus, with a long history of shutdowns, accidents and underwhelming performance.”

OPG completed a refurbishment of its Darlington station in March. The four-reactor station has since suffered several unplanned outages this year, leaving just one of its reactors in service for much of the summer. But two reactors recently returned to service, and another is scheduled to restart in November.