Ontario invites international bids

10 March 2008

Ontario's Minister of Energy, Gerry Phillips, has announced a two-phase competitive Request For Proposal process to select a nuclear reactor vendor. Four international vendors, Areva NP, AECL, GE Hitachi and Westinghouse have been invited to bid.


Ontario flagThe announcement is the next step in the government's 20-year energy plan, first announced in June 2006. That plan focuses on reducing greenhouse gas emissions and Ontario's overall carbon footprint while ensuring a "reliable, affordable and environmentally responsible electricity supply."


Minister Phillips said "Building replacement nuclear facilities will bring economic benefit to Ontario. It will help Ontario meet its future energy needs, keep prices stable, cut our carbon footprint and reduce greenhouse gas emissions."


A commercial team directed by Infrastructure Ontario will manage the procurement process. Team members will include Ontario Power Generation (OPG), Bruce Power, the Ministry of Energy and the Ministry of Finance. A two-member decision review board will review the competitive process. The process will be scrutinized by a "fairness monitor."


The Ministry of Energy, OPG and Bruce Power have already carried out a review of available nuclear technologies and have invited "four internationally recognized vendors" to participate in the first phase of the proposal process. The four vendors are Areva NP, Atomic Energy of Canada Limited (AECL), GE Hitachi Nuclear Energy and Westinghouse Electric Co. The same four vendors are currently competing for new nuclear build in the United Kingdom.


In phase one of the process, the prospective bidders will have to demonstrate the capability to execute a plan to provide the support necessary for a successful construction licence review and demonstrate a plan to deliver a construction licence application on schedule and in compliance with Canadian regulatory requirements. The winning bidder will also need to have the capacity and financial strength to deliver the project by 2018, with ground-breaking taking place in 2012.


Ontario's 20-year energy plan seeks to achieve energy efficiency gains of 6,300 megawatts of electricity and double renewable capacity to 15,700 megawatts by 2025, eliminate coal-fired generation by the end of 2014, add additional gas-fired generation for use in peak periods and maintain nuclear energy capacity for baseload operation up to the current level of 14,000 megawatts.


The Organization of Candu Industries, representing 101 domestic companies supplying Candu reactors, is lobbying the province to "shop Ontario" and choose AECL and its ACR-1000 Advanced Candu reactor. However, Minister Phillips has said that the selection process will be "fair, transparent and competitive."
Nanticoke touted as possible future site


Communities surrounding the 3920 MWe Nanticoke coal-fired power station, which is set to shut down in 2014, are strongly urging the Ontario government to consider the area for a new nuclear power plant.


Energy Minister Gerry Phillips has already stated that the next new nuclear power plant to be built in Ontario will be at an exisiting nuclear power plant site (i.e. at Bruce or Darlington). He told the Toronto Star that, whilst being focused on the next new plant, he did not rule out Nanticoke as a possible site for a second future plant, if needed. He noted that environmental assessments started for the Darlington and Bruce sites were filed a year ago, adding "We're not going to lose a year for an environmental assessment somewhere else."


Nanticoke has the advantage of established transmission infrastructure, compared with constraints in that regard at Bruce. Nanticoke is on Lake Eerie, making the delivery of construction equipment easy, as well as providing the required cooling water for a nuclear power plant.


An economic study prepared in 2007 by Harry Kitchen, a professor of economics at Trent University, concluded that the construction of a nuclear power plant in Nanticoke would create some 1000 full-time jobs over the next decade and inject as much as C$660 million into the local economy annually.