The Ontario government is embarking on an ambitious plan to significantly expand its nuclear power capabilities, with an estimated investment exceeding $47 billion. This expansion involves the construction of four new small modular reactors in Clarington and a comprehensive refurbishment of four existing reactors at the Pickering Nuclear Generating Station. While the government asserts that this initiative is essential for future energy demands, concerns about escalating electricity costs and reliance on nuclear energy are becoming increasingly prominent.
Major Investments in Nuclear Power
In May 2023, Energy Minister Stephen Lecce and Premier Doug Ford announced a monumental plan to invest $20.9 billion in four small modular reactors in Clarington, aimed at enhancing Ontario’s nuclear power capacity. Later, in November, they approved a staggering $26.8 billion overhaul of four ageing reactors at the Pickering station, located just east of Toronto. These bold moves are part of a broader strategy to meet what the government projects as a need for an additional 18,000 megawatts of nuclear capacity by mid-century.
However, this ambitious expansion comes on the heels of a 29 per cent spike in electricity rates in November, attributed to rising nuclear generation costs. Ontario Power Generation (OPG) has submitted a rate application to the Ontario Energy Board, seeking to double the payments it receives for electricity generated by its nuclear facilities. If approved, this could lead to an average increase of £3.50 in monthly bills for consumers over the next five years.
The Economic and Environmental Debate
Critics of the Ford government’s nuclear strategy argue that it will lead to higher energy costs for Ontarians. David Pickup, manager of electricity at the Pembina Institute, cautions that the province is on a trajectory towards increasingly expensive energy. “Ontario is on a track to more expensive energy in the future,” he stated, emphasising the potential financial burden of relying heavily on nuclear power.
Jack Gibbons, chair of the Ontario Clean Air Alliance, warned that if the current plans proceed, approximately 75 per cent of Ontario’s electricity could come from nuclear power by 2050. “If his nuclear projects proceed, our electricity rates will rise dramatically,” he predicted, questioning whether Lecce and Ford have miscalculated their energy policies.
Rising Rates and Financial Implications
The recent rate increase in Ontario stands out as one of the most significant in North America, with the province’s electricity costs rising more sharply than those of Maine and New Jersey, which saw increases of 25.5 per cent and 21 per cent, respectively. OEB spokesperson Tom Miller noted that the rate hike was partly due to unexpectedly high nuclear generation, including the early return of a refurbished reactor at Darlington.
While the November rate increase was somewhat mitigated by a corresponding rise in the Ontario Energy Rebate, the subsidy system ultimately costs taxpayers billions each year. Although current electricity rates in Ontario remain competitive compared to some provinces and U.S. states, the proposed increases from OPG could become a long-term burden on consumers.
The Future of Ontario’s Energy Landscape
The Ford government’s nuclear ambitions are set against a backdrop of shifting energy dynamics globally, where renewable energy sources are on the rise. Critics argue that the focus on nuclear power may lead to missed opportunities in exploring cheaper and more sustainable alternatives. “Renewables and storage have come down massively in cost over the last 15 years,” Pickup contended, suggesting that Ontario should reconsider its strategy in favour of expanding renewable energy options.
Despite the potential for cost overruns and delays associated with building nuclear plants, the government remains optimistic about the economic benefits of this massive investment. Lecce has expressed confidence in OPG’s ability to manage these projects efficiently, citing the successful refurbishment of the Darlington plant as a model.
Why it Matters
The ambitious nuclear expansion in Ontario represents a critical juncture for the province’s energy policy, balancing the need for reliable power against the financial implications for consumers. As the government commits to significant investments in nuclear energy, the potential for rising electricity costs raises pressing questions about the sustainability and affordability of Ontario’s electricity system. The choices made now will shape the province’s energy landscape for decades to come, impacting both residents and the broader economy.
