Darlington B continues July 9, 2009Posted by Maury Markowitz in AECL, nuclear.
Tags: aecl, candu, darlington, nuclear power
It’s been a little over a week since George Smitherman’s announcement that Darlington B was being put on hold, pending clarification from the feds about their intensions regarding AECL. It took a while for the stories to start making sense, but now that they do I’m worried by what I see.
Its seems pretty clear that OPG was being told to buy AECL in spite of any problems, including a price tag that even AECL said would make them unattractive. Smitherman’s position is pretty clear; he wants the feds to pony up cash. Win-win for the Ontario government I suppose – they get their reactors at the market price, and keep all the design jobs in Ontario by getting the Canadian taxpayer to pay their salaries. Awesome.
Now of course it’s equally clear that the feds, and Harper personally, consider AECL to be a money sink and are more than willing to kill it. Smitherman’s delay puts them in a tough position. If they go ahead and sell it off, the Ontario Libs will beat them over the head with it, with all that Avro Arrow talk. But if they want to avoid that, they’re going to have to come up with cash, precisely what they’ve made it clear they don’t want to do any more.
Why does OPG matter?
The key to this whole debate is that the design is worth nothing if no one buys it. Even AECL admits that that won’t happen unless OPG buys one first. If they don’t buy it, no one else is going to (consider the F-20).
So if the feds are going to sell AECL, they need to have OPG building one. Maybe they can pay just a little to offset the price, and then sell the whole company for at a higher price and make some of it back.
Even with an OPG sale, sales prospects outside Ontario are just as bleak as they are now. With or without Darlington, ACR simply can’t compete in the international marketplace, as they’ve already demonstrated. Do you think Lavalin or United Technologies would be interested in buying a product who’s only sale was a blatent example of protectionism and had to be sold at a loss?
Of course it’s also possible that a company already in the market would buy AECL, like Areva or Westinghouse. But if that does happen, the ACR will disappear immediately. These companies already have designs that are more advanced and less expensive, ACR has no value at all to them.
However, there is some value in the team. To me, it seems entirely more likely that a deal could be arranged with a supplier that wants to get a new design in the ground, like Westinghouse, with the proviso that a major portion of their international sales be centered in Canada and based on the AECL infrastructure. Do that.
Its not about the power
If you really want to clearly show why this entire issue is a political one and not about actually delivering power, consider these numbers:
Darlington B, fully expanded, would provide a little more than 3.2 GW of power.
Right now, the James Bay project can provide about 16 GW, but they only sell about 12 GW on any given day.
That’s right… James Bay has more existing spare capacity than Darlington B would provide 10 years from now. What would it take to get it here? About $500 million of wiring, or less.
Sooooo, why don’t we just do that? You already know the answer… there’s no way Ontario would ever buy power from Quebec, sacrebleu!