Speech at the Association of Power Producers of Ontario Conference

November 19, 2013

Speech by Heather Kleb, Vice President, Canadian Nuclear Association
at the Association of Power Producers of Ontario Conference
November 19, 2013

Thank you for that introduction. I greatly appreciate the opportunity to speak with you today, and to describe how the nuclear industry sees its place in Ontario’s energy supply mix.

The Ontario government is about to release its Long-term Energy Plan. So Ontarians need to be able to make reasoned, informed judgments on the nature of their energy supply mix. Nuclear is a significant contributor to that mix, to Ontario’s economy, to job creation, as well as to the reduction of the province’s greenhouse gas emissions.

However, if we’re going to get an accurate picture of nuclear energy in Ontario, we’ll need to start by clearing up some of the myths that we hear daily. There are three myths that we hear almost every day.

The first myth is that nuclear is not safe.

The second myth we hear is that our technology costs too much.

A third myth describes nuclear as an environmental enemy.

Let me address some of these myths so that we can see nuclear energy more clearly. The truth is that nuclear energy is safe, affordable, and environmentally responsible.

Let’s talk about safety first.

Canada’s nuclear power operations have a proven track record of being among the safest in the world. They are highly monitored, stringently regulated, and their operations are continuously improved through ongoing assessment.

In fact, Canada has an exemplary nuclear track record. We have operated nuclear power plants for decades without ever harming a member of the public. Not once. Never. In fact, we are known worldwide as a safety leader, because we build safety into our daily lives.

The people who work in our industry tend to live right next to nuclear facilities. Their children go to school, and play hockey, right next to nuclear facilities. And they believe that a good day on the job is one that ensures safety, not just for us, but for our kids, our neighbours, and our communities. Our safety culture runs deep.

We know that a country that fails to implement this strong safety culture could run into trouble sooner or later. We see a good example in Japan.

Looking at the Fukushima accident, it is important to remember that the Daiichi reactors did exactly what they were supposed to do when the earthquake struck. They shut down immediately. Then the tsunami flooded every source of electricity needed to pump cooling water into the reactor core. Without those pumps, the Daiichi reactors melted down.

Sadly, thousands died from the earthquake and tsunami. But, not a single death resulted from the meltdowns or the release of radiation. The tsunami and earthquake killed thousands. The Daiichi reactors did not.

Now, it would be fair to ask if the Japanese regulatory system was robust enough to prevent the accident, and to deal with the ongoing safety issues. And those questions continue to be asked.

It would also be fair to ask about the safety of Canadian reactors and the robustness of our regulatory system. None of our reactors would ever face a tsunami. But the Daiichi accident did compel Canadian nuclear operators to assess our defences, and to strengthen them even further.

Working closely with our regulator – the Canadian Nuclear Safety Commission – we reinforced our emergency response capabilities. We also improved our close collaboration with nuclear operators around the world.

On the government side, our federal regulator has tightened its rules, and received international recognition for its response to the events at Fukushima.

The bottom line: Our nuclear power plants are safe, and our regulatory system is strong.

Now, it is also fair to ask what happened at Three Mile Island in 1979, and Chernobyl in 1986. The accident at Three Mile Island resulted from operator error. Chernobyl also resulted from operator error, as well as poor design. While Three Mile Island produced no casualties, Chernobyl did. Fifty-six people died, the nuclear workers and first responders who ran into the reactor while everyone else evacuated. We honour their sacrifice, learn from the operator and design errors, and we work much more safely today.

Today, we are confident that our operators have the right training, and that our reactors are designed for safe operation. In fact, it’s worth noting that the 430 civilian reactors around the world have more than 14-thousand 500 years of safe operation. Here in Ontario we have operated safely for over four decades.

So, the fact of the matter is that nuclear energy here in Ontario is safe.

The second myth-busting reality is that nuclear is affordable — both today and well into the future. The evidence comes from the Ontario Power Authority. Looking at actual costs paid by consumers, and including all charges, nuclear remains remarkably affordable.

Averaging the regulated price paid to OPG and the contract price paid to Bruce Power, nuclear energy comes in at just 5.6 cents per kilowatt hour.

Compare that to hydro, at 3.5 cents.

More importantly, compare it to gas at 11 cents, wind at 13 cents and solar at 50 cents per kilowatt hour.

Yes, you’ll want to check the math. And you’ll find an excellent calculator online at brucepower.com, plus an explanation of our methodology.

The simple fact is that nuclear today is cheaper than any other energy source except hydro.

What about refurbishment, or new nuclear? The most recent refurbishment took place at Bruce Power. Two of the reactors at Bruce A have been refurbished. The four reactors at Bruce B have yet to be refurbished.

Bruce receives 6.8 cents per kilowatt hour for Bruce A, and 5.2 cents for Bruce B.

Refurbishment raises the cost of power, that is true. But power from Bruce A is still much more affordable than power from gas, wind, or solar.

Looking now at Darlington, we see OPG proposing a maximum price per kilowatt hour of 8.6 cents, up from 5.6 cents.

In other words, refurbishment raises the price of Darlington’s electricity by only three cents, and guarantees it for 30 years. That is a small price to pay for 30 years of energy security and price stability. And it is still competitive with the other energy sources.

So, based on the available evidence, refurbishment doesn’t drive nuclear’s costs as high as some critics say. It certainly won’t be the 37 cents recently claimed by the Ontario Clean Air Alliance.

Now my third myth-busting point is that, contrary to what environmental critics claim, nuclear energy is green. Nuclear power generation releases virtually no greenhouse gases, and none of the particulates that lead to smog and respiratory illness.

In contrast, coal produces the emissions that drive climate change. No other fuel produces as much greenhouse gas as coal.

That is why our industry proudly celebrates the fact that Ontario will close its last coal plant next year. Nuclear energy made that possible, as Minister Chiarelli has publicly acknowledged.

Looking at greenhouse gas emissions on a life-cycle basis, nuclear energy emits 62 times less greenhouse gas than coal, and 29 times less than natural gas. These numbers come from the Intergovernmental Panel on Climate Change.

Nuclear even beats solar. Among other energy sources, only wind and hydro score lower than nuclear on greenhouse gases.

To be clear, wind and solar hold great promise, as long as they can resolve their central challenge of intermittency. Over time, improvements in storage technology may allow these intermittent power sources to improve their reliability.

But, until that happens on a massive scale, these technologies are not suitable for base load generation — the always-on, 24/7 power that Ontario needs, that everyone needs. For the foreseeable future, wind and solar will always rely on a back-up power source; most likely gas.

However, nuclear provides the continuous, predictable, always ready power that the others can’t. That is why, from a reliability point of view, it is the right choice for base load power. But it’s more than reliable. It is also safe, affordable, and environmentally responsible.

I have talked about three myths, but there is one more myth that needs to be addressed.

Nuclear critics would tell us that the world is turning away from nuclear power. You hear this daily in the news media. And you can’t venture onto the Internet without someone declaring that the end is at hand for nuclear power.

Here’s the truth. The global nuclear industry is alive and well, and growing strongly. Anyone who tells you otherwise is ignoring the rise in global population, and the rise in demand for nuclear-generated electricity.

With the world’s population growing rapidly, the global market for electricity is growing in stride. Today we number about seven billion people. Looking forward to 2040, the United Nations forecasts that the global population will rise to nearly ten billion.

As we add another three billion people to this planet, we will certainly need more electricity.

We all know the story on China. With a population today approaching 1.4 billion, it has more people than any other country. Its fast-growing economy represents a massive opportunity for the energy industry.

Today, India has the second-largest population. By 2030, it will pass China and become number one in population size. More importantly, it will continue to grow well into the future. And its demand for energy will continue to rise dramatically.

And then there is Africa, which has very little energy infrastructure. Today the continent is home to one billion people. According to the United Nations, that number will rise by 1.7 billion by 2030, matching India in population growth. Not only will there be more people, but as they move into the middle class, their electricity consumption will grow dramatically.

So here we find one of the essential elements in any calculation about the energy industry. The world’s population will continue to grow strongly. Most of that growth will take place in the developing world. And most of that developing world lacks the electricity generation and energy infrastructure that it will need.

What are we looking at here in terms of energy demand?

The World Energy Outlook just published by ExxonMobil forecasts that China’s energy demand will double by 2040. In India, it will quadruple. And Africa’s energy demand will rise even faster, at an estimated 335 percent. These are huge increases in energy demand.

On a global basis, energy demand is forecast to rise by about 16-thousand terawatt hours. That number is difficult to imagine, but think of it this way. The United States today uses about four thousand terawatt hours of electricity. So the world demand forecast means that we’d be adding the equivalent of four Americas to our demand. That’s huge.

More importantly — which fuels will be needed to meet that demand?

We know that today the world runs largely on coal. It’s the number one fuel because it’s cheap and readily available.

However, leaders in developing nations have begun to realize that coal is cheap only if you don’t count the hidden health costs of pollution and climate change. When you price those factors into the mix, then coal becomes the energy world’s number one problem.

When countries are looking for a reliable electricity source for base load production, there are really only three possibilities. The first is hydro, generated from a continuous supply, like Niagara Falls. But there aren’t very many hydro sources like that around the planet. And so the developing world faces a choice between natural gas and nuclear power – or a combination of the two.

Given the economics of electricity production using natural gas, it’s no surprise that ExxonMobil forecasts that gas powered electricity will gain market share. Gas provides 20 per cent of today’s electricity worldwide. It could provide 30 per cent by 2040.

But what about nuclear’s role in this mix? Will the world need more nuclear power than it does now?

Today, there are about 430 nuclear reactors installed in 31 countries. Soon that number could more than double. India alone has six units under construction, 18 planned and 39 proposed. China has 28 under construction, 53 planned, and 118 proposed.

Around the world, 70 reactors are being built today. By built, I mean that the concrete has been poured, and construction is underway.

Another 173 are planned. By planned, I mean the projects have been approved, the financing has been arranged, and the reactors should begin to operate within the next ten years.

On top of that, firm proposals exist for another 314 reactors. By firm proposals, I mean that specific proposals exist for specific sites, and that these reactors could begin to operate within 15 years.

This is the real picture on new nuclear capacity — 70 reactors now under construction, 173 planned, and 314 on the drawing boards. This picture is certainly not the one that you see in the media.

The simple fact is that a new generation of nuclear power is arriving.

Now, what does all of this mean for Ontario? Where do we fit in this world of global growth?

Naturally, the nuclear industry was disappointed to hear the energy minister say that his government won’t go ahead with plans for new reactors right now.

Like everyone else, we’re looking to see how the new Long-Term Energy Plan expands on that comment, and what it says about the province’s commitment to nuclear refurbishment.

Minister Chiarelli has pointed out that Ontario has a surplus of electricity right now. It certainly does, but how long will that surplus last?

The Ontario Power Authority forecasts that demand will remain flat for many years. Even if the economy begins to grow faster than the current 1.3 percent annually, that growth would be offset by gains in energy efficiency. New buildings, new household appliances — almost everything that’s new uses less electricity than the unit it replaces. The argument for low, or even zero, demand growth makes sense for the next several years.

But what is happening on the supply side? As you know, Ontario is preparing to close the Pickering generating station in 2020. Pickering generates about 3,100 megawatts that will need to be sourced elsewhere.

Ontario is also preparing to refurbish reactors at Darlington and Bruce, one by one. Taking just one reactor offline at Darlington, and another at Bruce, simultaneously, means another 1,600 megawatts off the grid.

So, depending on the timing and pace of refurbishment, Ontario could need nearly 5,000 megawatts of additional capacity early in the next decade.

The bottom line: We can afford to delay new build for another year or so, but probably not much longer after that.

Building a new reactor is really a ten-year infrastructure project, and a delay in starting the project could lead to a nuclear supply gap. Other fuels could fill that gap, even temporarily. But they would probably be less affordable, less safe, and less beneficial to the environment.

We will need refurbishment to maintain our capacity, and we will need new build for our capacity to grow. In both cases, Ontario could certainly use the jobs. Investments in nuclear energy will help put Ontario back to work.

According to Canada’s Manufacturers and Exporters, building two new reactors would create about 80,000 person-years of employment. That’s a lot of jobs, plus an investment in a 60-year, low-carbon, safe, affordable, reliable electrical supply.

With ten reactors in Ontario coming due for mid-life maintenance, a further 65,000 person-years of employment would be created and spread over 11 years. Refurbishment alone means about $12.7 billion dollars in direct labour, mostly from Ontario. It also means a further $12.3 billion dollars in equipment and supplies mostly spent in Ontario.

And that’s on top of the 60,000 Canadians that we already employ, directly and indirectly, with most of those 60,000 jobs located right here in Ontario.

So let me return to the myths that surround the nuclear industry. Why do these myths endure?

In part, it’s our own fault. The nuclear industry is very risk-adverse. We take safety very seriously. We understand our science very well. We talk about it among ourselves, constantly evaluating our safety, and sharing our knowledge.

But when we share our knowledge with the public, we too often assume that they share our language, our knowledge, and our passion for science. Too often we forget that there are easier ways to help the public to understand the facts about nuclear.

But we can – and we should – help the public to understand. To do this, we need to use plain language, to help our fellow Ontarians understand the central role that our industry plays in our province’s economic future.

That nuclear energy is affordable today and will be well into the future. It provides clean energy, reliably and safely. That alone should make investment in nuclear an attractive proposition.

Canada is one of the very few countries with a comprehensive nuclear sector. Today we have talked about what happens in the middle of the fuel cycle. We haven’t spoken yet about the benefits of uranium mining in Saskatchewan. We haven’t talked about the spin-off benefits, such as isotope production for medical diagnostics and treatment. Most people don’t know that the cobalt treatments for cancer come from our nuclear reactors. We haven’t even mentioned how advanced manufacturers use nuclear science to improve the quality of their goods. This is what we need to convey.

And that Canada’s nuclear facilities rank among the best in the world for safety and reliability. We have an internationally respected independent regulator, a Canadian reactor designer, a rich network of expertise, and a strong supply chain.

The proof is readily available. Three of the highest-growth, most opportunity-rich developing economies – South Korea, China and India — have joined Argentina and Romania in buying our unique, Ontario-grown nuclear reactor technology.

Let me conclude.

Ontario’s investment in nuclear-generated electricity not only guarantees safe, reliable, affordable, low-carbon power. It also signals our determination to remain an advanced, high-knowledge economic player in the 21st century. The world continues to choose nuclear. Ontarians should, too.

I hope you can join with me in getting this message out, in clear language, and free of myth. So that Ontarians can make good judgments about the place of nuclear power in Ontario’s energy supply mix.

And that we remain an active player in the economy of the future, with nuclear power at our side.

Thank you.

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