The development of the Lower Churchill Falls project in Labrador and hydroelectricity imports from Quebec can replace Ontario's aging nuclear reactors, according to a report released by the Ontario Clean Air Alliance.
Recommendation Three of the report, completed by the alliance's research arm, is for the Ontario's government to make a high priority of negotiating long-term electricity supply agreements with Hydro Quebec and Nalcor Energy, Newfoundland's energy corporation.
"It's a very good option, much lower cost and more reliable than new nuclear reactors," said Jack Gibbons, chairman of the alliance, a public-interest group of 90 different organizations in Ontario, including the City of Toronto and several other major cities in Ontario.
"Water power from Quebec and Labrador are Ontario's lowest-cost supply options for additional renewable electricity. The cost of water power from Quebec and Labrador would be at least 40 per cent lower than the cost of building new nuclear reactors at the Darlington Nuclear Generating Station east of Oshawa.
Gibbons said the idea of going with two new nuclear reactors will require a federal subsidy to Atomic Energy of Canada's costs, which could be seen as unfair to other provinces.
Hydroelectricity from the Lower Churchill Falls project has the potential to fill 28 per cent of Ontario's 2021 electricity supply gap at a cost of about six cents per kWh plus transmission costs, according to the alliance. The total market cost for Ontario consumers could be about nine cents per kWh, the alliance estimated.
The study quoted Moody's Investors Service as saying the cost of electricity from new nuclear power plants is likely to be at least 15.1 cents per kWh U.S. (about 18 cents Canadian as of May 2009).
"In addition, a history of cost overruns, late delivery, premature aging and unexpected breakdowns suggests that new nuclear reactors may be the least reliable option to meet Ontario's future electricity needs," the study said.
"Ontario has numerous options to replace the electricity produced each year by its aging nuclear power generators. Nevertheless, the government of Ontario is planning to sign, by June 20, 2009, a contract for the construction of two new nuclear reactors at the Darlington Nuclear Station east of Oshawa."
The study noted that the transmission service agreement Newfoundland and Labrador Hydro signed with Hydro Quebec requires Hydro Quebec to wheel power from the existing Churchill Falls generating station to the U.S./Canada border.
"This agreement creates a precedent for a future agreement which would facilitate the transmission of hydroelectricity from Labrador to Ontario via Hydro Quebec's transmission system," the alliance said.
Nalcor has said it remains confident it can finance the proposed Lower Churchill hydroelectric project, estimated at about $10 billion. Any project sanction date for the Lower Churchill likely won't happen until the summer or fall of 2010 a year later than initially expected.
The project, if successful, will produce more than 3,000 megawatts about 250 MW higher than previous estimates and enough to power 1.5 million homes.