What’s happening in the Ontario reactor competition?

I saw an interview with George Smitherman, the Ontario Minister of Energy and Infrastructure, on TVO last night.

As the person in charge of the Ontario reactor competition, he said that Westinghouse was still in the competition in spite of some of his senior officials previously saying it was out. I think the confusion arose because Westinghouse wants to sell its technology rather than constructing and delivering a fully operational reactor itself.  The construction and commissioning would be done by some other firm. This is the pattern Westinghouse seems to be following in their other sales. In China the builders are local electrical utilities that have purchased the AP1000 technology and in the US the constructing partner is the Shaw Power group, at least for the Florida reactors.  

In my opinion this is a very smart way to do business but probably not very attractive to the Ontario government since the only local reactor construction capability resides in Team CANDU, another contestant. Perhaps Bruce Power might attempt constructing an AP1000 with the technology supplied by Westinghouse; they certainly have reactor refurbishment experience but as far as I know they have never built a reactor. OPG no longer has a reactor construction capability and instead concentrates on operations.  In my previous post on the AP1000 I expressed my admiration for this reactor design but I also mentioned rumours that Westinghouse was not all that engaged by the Ontario competition preferring instead to concentrate on the US and Chinese markets.  This may also be true.

The Minister rejected the idea of constructing one each of two of the competing designs which I agree would be impractical. He also talked about announcing the decision “at the end of the spring”. While there may be a decision at that point, for reasons I’ll mention in my next post I don’t believe there will be any significant expenditures until well after the decision.

To me the most interesting thing he had to say was in response to the interviewer’s probing about AECL. Although he acknowledged the advantages of awarding the contract to a domestic company, AECL, he implied that the ball was really in the federal government’s court. He had been looking for indications of federal support for AECL but wasn’t seeing any, or enough of them, to satisfy him.

Federal support is the key for AECL winning the bid, in particular would the feds ante up for the inevitable cost overruns? Probably not in today’s economic climate. Perhaps, the feds are planning some kind of ‘triple play’ whereby, for example, AECL is sold to the winning bidder, Westinghouse or AREVA. The winner would at one stroke obtain a skilled local labour force and the CANDU repair business. AECL would be revitalized as a division of a big multinational with deep pockets and the feds would finally succeed in riding themselves of AECL after all these years.  

By the way, what ever happened to the National Bank report on AECL’s future?





3 Responses to “What’s happening in the Ontario reactor competition?”

  1. Steve Aplin Says:

    I took from the minister’s comments that (1) only AECL can demonstrate an Ontario supply chain and workforce and (2) the feds must ante up for overruns if they want Ontario to choose AECL. For the feds to let Areva or Westinghouse win and then sell AECL to the winner guarantees a lousy price for AECL. If the feds backstop cost overruns for AECL (and only AECL), they win and if Areva or Westinghouse still wants AECL (and they might) we—the taxpayers—get a better price. In my view, Canada should hang on to AECL. There’s potential for reactor sales in the U.S.—don’t laugh—and elsewhere, depending on how GNEP shapes up under Obama. Why hurry to a sale? The only federal decision at this point should be to agree to backstop overruns in Ontario. No problem selling this in a shaky minority government: it’s part of a jobs stimulus.

  2. Dr Singh Says:

    For anybody out there fighting for Canadian protectionism:
    AECL will NOT disappear if they lose Ontario new build contract!!

    1. Why must AECL win ALL the contracts? There is also NB and Alberta, and plenty interest worldwide.
    2. Design is not ready for first wave of builds anyway. Its not like this is final new build in all of Ontario history. I’m sure by ’20-’25 more aging CANDU’s will need to be replaced.
    3. Over 20+ years of refurb work on Bruce, Darlington and all the CANDUs abroad etc.
    4. non-AECL design will still get majority of work done by factories here in Canada.
    5. Imagine EC6 chosen for Ontario – AECL continue whining about ACR-1000. Even if ACR-1000 chosen, and onbudget, and ontime, absolutely no guarantee anyone else will buy it. And even if China or South Korea buy a few, what benefit is that to Ontario rate payers? I’m sure there are hundreds of projects with higher ROI Ontario could be funding…

    #1 reason to chose foreign design – if AECL wins feds, hence all Canadians are on hook for overbudget, leading to tension between Ontario and everyone else (especially Alberta and BC). With foreign design, worst case Ontario rate payers and foreign company split the overbudget… non-involved Canadians not affected.

  3. A.N.Kumar Says:

    Areva’s reactor proposed for Ontario is still an unproven design. In Finland, Areva is currently nearly 3 years behind schedule and has a cost overrun of $ 5 billion (US) and counting. The installed crucial reactor core steel work is full of cracks with missing Q/A. Westinghouse ‘s AP-1000 is also an unproven design. In view of these Major problems faced by competition, the AECL design is still stands out as the most viable.

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