Lawrence Solomon savages the Ontario government’s recently announced $87 billion energy plans:
This week, the Ontario government published its Long-Term Energy Plan. Under it, the province and Ontario Hydro’s successors are committing to more uneconomic nuclear power projects and more uneconomic alternative energy generation contracts, but on a far bigger scale than the old Ontario Hydro ever undertook. The grave the government is digging this time is big enough to bury the province as well as the power sector.
Where the four reactors at Darlington cost $14-billion, the new long-range plan calls for $33-billion, more than double the previous price tag, and that’s to build just two new reactors and refurbish 10 old ones, including those at Darlington. That $33-billion estimate is more a wish than a firm projection. Nuclear reactors, notorious for their cost overruns, typically come in at two to three times their original estimates. Darlington, originally estimated at $3.5-billion, came in at four times its estimate. Refurbishments likewise run up the bills, as seen in the two Bruce reactors at Lake Huron. In 2005, the estimate was $2.75-billion. Today, the refurbishment is already three years behind schedule and $2-billion over budget. No one would be surprised to see the $33-billion estimate balloon to $99-billion or more by the time the plan is complete.
Amazingly, the nuclear boondoggle may not represent the biggest blowout. Where the original alternative energy contracts with private power producers cost $6-billion, the new round of alternate energy projects envisaged in the Long-Term Plan cost more like $27-billion — or more like $45-billion once the supporting infrastructure for these alternative projects is factored in. This $45-billion,like the $33-billion estimate for nuclear power, may itself be a gross underestimate, partly because the supporting infrastructure is subject to cost overruns, partly because the bulk of the new alternative energy projects — unreliable wind and solar — are likely to require expensive backups to avoid blackouts.
His suggested solution? Scrap the huge plan, which on past evidence will be far more expensive, slower, and less effective than they predict. The better solution? Privatize the grid. Allow market forces to set electricity rates.
