Doug Alexander
Bloomberg.com
August 18, 2005

Ontario Power Generation, the utility that provides most of the province’s power, will spend C$985 million ($807 million) to build a water tunnel that will boost production at a hydroelectric plant near Niagara Falls. see Niagara Tunnel Project.

The German unit of Austria’s Bauholding Strabag SE has received a C$600 million contract to construct the 10.4-kilometer (6.5-mile) tunnel, which will supply water to the Sir Adam Beck Generating Complex, provincially owned Ontario Power said today in a statement.

Construction is scheduled to start in September and finish by 2009, the utility said. The tunnel will let the plant, six kilometers downstream, boost production by 1.6 terawatt-hours, enough to meet the yearly needs of a 160,000-person city.

"It’s a step in the right direction," said Tom Adams, executive director of Energy Probe, a research group that advocates energy conservation. "It is a modest increase in output, but the operating costs will be low and it’s located close to places where consumers are drawing a lot of power."

Hydroelectric plants generally cost less to operate than nuclear power plants or natural-gas-fired ones, Adams said.

Ontario faces energy shortfalls in the next decade as it plans to shut down four coal-fired plants, which represent about a fifth of Ontario’s power supply, by 2009.

Austria’s ILF Beratende Ingenieure, Morrison Hershfield of Toronto and Dufferin Construction of Oakville, Ontario, and other Ontario subcontractors will be working on the project, Ontario Power said.

The additional C$385 million will be spent on consultant fees, interest costs, environmental work, insurance and remedial work at retired power plants at Niagara Falls, according to the utility.