CANDU Refurbishment Costs Highlighted as Point Lepreau set to return to service

It will be a little while longer before rates are set for the refurbished Point Lepreau nuclear power plant (NPP), but NB Power's president has either lent credibility to my rough estimate ... or he just pulled the figure off of what I wrote last month...

New Brunswick nuclear reactor set to return to service | CTV News:

When the Point Lepreau generating station in New Brunswick was shut down in March 2008, NB Power officials said the refurbishment would span 18 months and cost $1.4 billion.
More than four years and another billion dollars later, the provincial Crown utility company is hoping the repairs will extend the plant's life by 27 years, supplying about one-third of New Brunswick's power needs.
"Point Lepreau will be a valuable asset and a great investment for $2.4 billion," NB Power president Gaetan Thomas said in an interview.
"We are still going to be able to produce clean energy from Point Lepreau -- over 700 megawatts -- for less than nine cents per kilowatt hour and that makes it a very competitive option."

But Norm Rubin of Energy Probe, a Toronto-based energy watchdog group...

Continue Reading at CTV News

Funny how the same old folks are pursued for quotes year after year.

Graph from CANDU Nuclear Station Reliability

Energy Probe's site notes Mr. Rubin is currently a member of "the Steering Committee of the Campaign for Nuclear Phaseout."

The CNP issued a report in 2003 which graphed future nuclear production in Canada, including forecast out to 2019.  That report had production falling to ~40TWh by 2010 and continuing to decline. Ontario's IESO noted production of 85.3TWh in 2011.  The charting of the CNP graph done on the Canadian Nuclear Socity (CNS) site could be updated to show production essentially flat since 2006.

Energy Probe Alumnus Tom Adams has postings on his blog regarding Point Lepreau, including this one noting:

Recovery of the sunk refurbishment costs appears likely to approximately equal the operating costs, assuming that the reactor operates well for a period of about 15 years — an assumption that can only be characterized as aggressive.

History indicates that is an aggressive assumption - aggressively pessimistic in the EP/CNP style.

Nonetheless, at ~9 cents/kWh the pricing of the ~$2.4 billion up-front costs would seem roughly equal to the operating costs.  Mr. Adams further notes that $2.4 billion includes costs of replacement supply - a curious addition as the refurbishment took place over a period of low costs and the replacement power was almost surely less than the 9 cents/kWh.  

It appears that New Brunswick is following Ontario's lead in holding costs low in current times by deferring the costs as if they belong to a nuclear project.

Image from Ontario Budget

This thinking allows Ontario's NDP energy critic Peter Tabuns to opine, "Ontario families are still stuck paying the debt retirement charge from the last time the province built a nuclear plant at Darlington," as he abandons any watchdog role and ignores the now universally agreed upon fact that the debt retirement charge has been diverted from paying down debt since 2008.

A truer cost of refurbishments may be revealed at Bruce Power, where the estimated costs of refurbishing units 1 and 2 was exceeded, but by far less than reports would indicate.  A figure of $5 billion for 1500MW of power at 27 years would be somewhat cheaper than Point Lepreau's refurbishment calculated over that timeframe (details on initial contract here - also includes some work at units 3 and 4).

Follow-Up

I received an e-mail from Morgan Brown, the writer of the CNS webpage, and graph, referenced in the original post; he provided this updated "Canadian Net Nuclear Production" graph: