Ontario nuclear power subsidizes gas and renewables: an inquiry into the price of political correctness

I recently participated in a very interesting discussion on Tyler Hamilton’s blog. Tyler as you may know also covers energy for the Toronto Star, and is generally anti-nuclear—especially when it comes to the CANDU. As you can see in the comments, I and others suggested that revenues from Ontario’s nuclear-generated electricity are actually subsidizing the competition. To me this is a fairly simple conclusion once you look at even the meagre public data that’s out there.
What do the data say? First, nuclear energy provides more than half Ontario’s electricity most of the time. Go to www.ieso.ca any time of the day, and look at the pie chart under the heading “Generation by Fuel Type”; it shows data from two hours ago. Nuclear is always the single biggest contributor, and most hours of the day it contributes well over half Ontario’s power.
This by itself proves my point. Ontario rate payers, as you’ll see below, are paying for all sorts of policy initiatives related to electricity. The mechanisms through which they are paying, the Global Adjustment and Debt Retirement Charge, are tied to every kilowatt-hour that is consumed in Ontario. If the nuclear plants generate the bulk of those kWhs, then nuclear power also generates most of the add-on revenue. As one of Tyler’s other commenters said, that’s not speculation. It’s math.
The second thing the data tell us is that most nuclear-generated electricity comes with an average price of roughly 5.8 cents per kilowatt-hour. How do I get that number? The output from Bruce units 3 and 4 (the “A” station) fetches something like 7.1 cents per kWh according to Ontario’s Auditor General. Bruce units 5 through 8, a.k.a. Bruce B, fetched 5.8 cents per kWh in the first 9 months of 2010, according to Cameco (which has an interest only in units 5 through 8). Output from Pickering and Darlington gets 5.5 cents per kWh according to Ontario Power Generation. More at:

http://canadianenergyissues.com/2010/11/17/ontario-nuclear-power-moderates-subsidizes-the-cost-of-gas-and-renewables-an-investigation-into-the-price-of-political-correctness/

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