Energy Probe

Richard Blackwell
Globe and Mail
October 1, 2006

It’s the world’s biggest nuclear power company, and a major player in Canada’s electrical distribution, nuclear maintenance and uranium mining business, but Areva Group’s name is no household word in this country.

The French nuclear giant wants to change that, and it hopes a higher profile will help it gain a huge breakthrough in Canada: the sale of a new nuclear reactor for Ontario’s power grid.

The task of beefing up the company’s image with the public, politicians and the business community has been handed to a Frenchman, Armand Laferrère, who landed in Canada in July to become president of Areva Canada Inc. A former vice-president of strategy based in Paris, he spent much of the summer introducing himself at Areva’s far-flung operations across Canada.

It’s the first time Areva has had a Canadian-based executive responsible for all of its businesses in Canada. Previously, each unit reported directly to divisional or regional heads in France or the United States. “That wasn’t the best way to be visible in Canada or to be [perceived as] Canadian,” Mr. Laferrère, 38, acknowledged in an interview at his spartan office in a low-rise building in Pickering, Ont., just east of Toronto. “We were managing the Canadian operations too much through the U.S. or France.”

One drawback of the old structure, he said, was it hampered forging crucial joint ventures and alliances with Canadian companies.

To cement its corporate identity, the Areva name is being firmly attached to each Canadian business. That means, for example, its Saskatchewan uranium mining arm, previously called Cogema Resources Inc., is now known as Areva Resources Canada Inc.

Those already familiar with Areva laud it as an excellent corporate citizen. Jay Fredericks, Saskatchewan’s director of mineral policy, said Areva is an “extremely progressive” company when it comes to training, and it is a leader in hiring First Nations employees at its uranium mining operations in northern Saskatchewan. Hiring Mr. Laferrère to oversee all its activities “shows Areva is making a long-term commitment to their operations in Canada,” Mr. Fredericks said.

Areva’s low profile stems partly from the fact that the French parent company is itself a kludge of various nuclear businesses and public entities. It was created five years ago by combining the industrial portions of the French government’s nuclear power operations with uranium miner Cogema and reactor engineering firm Framatome ANP. The transmission and distribution business was purchased from French conglomerate Alstom SA in 2004.

Now, about 85 per cent of Areva is owned by an arm of the French government, while 15 per cent is in a public float. The mergers at the parent company brought a number of Canadian operations into the fold:

– Areva Resources has ownership stakes in uranium mines in Saskatchewan, and is exploring for more in Saskatchewan, Alberta and Nunuvut.

– The transmission and distribution arm, Areva T&D Canada Inc., sells products such as connectors, switches and substations, counts Hydro Québec as a big customer, but also sells to utilities in Ontario, Alberta and British Columbia.

– Areva NP Canada Ltd., the nuclear maintenance arm, performs engineering, plant modifications and decontamination at existing Canadian nuclear plants.

Together, the three groups employ about 1,100 people.

But Areva’s biggest coup would be the sale of one of its reactors for the expansion of Ontario’s nuclear production capacity. Ontario Power Generation Inc. and Bruce Power, the two current nuclear operators in Ontario, have both said they’ll consider a range of vendors for the installation of new reactors. For the first time they’ll look beyond their traditional supplier: Atomic Energy of Canada Ltd. with its Canadian designed CANDU reactor.

While decisions are likely at least two years away, Mr. Laferrère will be spending that time selling the virtues of Areva reactors, and enhancing Areva’s image as a Canadian corporate citizen. “We’re not taking part [in the bidding process] as if we’re invading from outside,” he said. “We’re a long-term player. We’re not a raider or a predator.”

Areva will pledge as much as 70-per-cent Canadian content in new reactors, by sourcing materials, labour and engineering skills here. Canada’s nuclear industry will gain skills in light-water reactors if Areva wins the contract, he says, complementing Canadian expertise in AECL’s heavy-water CANDUs.

Mr. Laferrère won’t rule out some kind of joint venture with AECL, and says he’s already made “indirect contact” with the Canadian company about working together.

As for rumours this past spring that Areva might try to buy AECL, that “is not the likeliest scenario” he said. AECL is viewed as an “icon” of the country, he said, and it has indicated it is not for sale.

Mr. Laferrère wouldn’t criticize the CANDU technology directly. “Canadian pride [in the technology] is justified,” he said, adding quickly that light-water technology such as Areva’s is now far more widely used around the world. The bottom line: Areva’s reactors would give Ontario reliable, cheap and long-lasting power.

Tom Adams, executive director of Toronto-based energy watchdog Energy Probe, said Areva has a good chance of landing a Canadian nuclear power plant contract, because CANDU reactors have had so many problems that dented their reputation. Areva is also the only company with a latest-generation reactor under construction – in Finland – although Mr. Adams noted that project is about a year behind schedule.

But the potential Canadian market for new nukes extends beyond Ontario. Areva will look into possible sale of nuclear reactors to the oil patch, to aid in the energy-intensive mining of the Alberta tar sands.

Mr. Laferrère said he has already had some preliminary talks with players in the oil industry. “There could be room for an alliance, and I will explore this,” he said.

Nestor E. Arellano
IT World Canada
October 4, 2006

The Ontario government may be right on schedule with its goal to hook up 800,000 homes with so-called smart meters, but a local consumer advocacy group doubts if the device will be practical for residential users.

Premier Dalton McGuinty had earlier charged the Ontario Energy Board (OEB) with overseeing deployment of smart electricity meters in 800,000 homes in the province by the end 2007. The deployment is supposed to cover the whole of Ontario by 2010.

However, the Toronto-based Energy Probe thinks the cost of deploying the device outweighs its benefits, especially when used by low energy consumers such as homeowners. Energy Probe is a consumer and environment research team dedicated to resource conservation, economic efficiency, and effective utility regulation.

"We support smart metering only when their use can be justified," said Thomas Adams, executive director of Energy Probe.

Smart meters generally refer to meters that identify consumption in greater detail than conventional meters and communicate that information via a network back to local utilities and to users for monitoring and billing purposes.

Depending on their features, Adams said, smart meters can cost anywhere from $400 to $500 per unit.

The OEB, however said, the price of each unit is around $250 including management cost. The amount has been rolled in with the special pricing rate smart meter users get, according to the OED.

Adams said the average power consumption of Toronto residents is around 1,100 Kilowatt Hours (KwH) per month. "The real energy saving benefits will likely be realized by users who consume around 3,000 KwH per month or more."

Power users at this level are usually businesses.

If used by households consuming 700 KwH per month, smart meters could end up costing the government more, Adams pointed out. "The cost of meter management using old meters is about 50 cents per unit. The cost of management for smart meters can go up to $5 per unit."

A spokesperson for Milton Hydro, the project’s earliest adopter said smart meters need to be deployed with an appropriate sliding payment rate, and that users should be notified about their energy consumption in a relevant manner.

"It’s not the smart meters alone. The real trick is to couple the device with a pricing rate and data feedback to consumers," said Don Thorne, president of Milton Hydro Distribution Inc.

Sylvia Kovesfalvi, communications adviser at the Ministry of Energy said so far 125,000 residents in the province have smart meters and the program is running on time.

Since 2003, the municipality of Milton has deployed smart meters in some 6,000 homes, but it was only last October that a so-called time-of-use pricing scheme was implemented.

Thorne said cost savings analysis are still in the works, but energy savings are expected to be around 10 per cent per household.

The current energy rate for residential users in Ontario is 5.8 cents per KwH.

According to Vanda Wall, communications adviser of the Ontario Energy Board, the pricing scheme for smart meter users allows consumers to shift energy use to off peak hours.

For instance, rates for winter months from November to April are 3.5 cents per KwH during off peak periods (10 pm – 7am), 10.5 cents per KwH during peak periods (from 7 am – 11 am and 5 pm – 8 pm), and 7.5 cents per KwH during mid-peak times (11 am – 5 pm).

Adams of Energy Probe, however, doubts if the strategy will work with low energy consuming residents. For instance, he said, people’s refrigerators have to be on throughout the day, while viewers watch television programs depending on the schedule of their favourite shows and not power consumption periods. "Factories, on the other hand, can shift production time to take advantage of off peak rate."

Jay Evensen, director of business development for communications network firm Cellnet Technology Inc. of Alpharetta, GA, agrees with Thorne on the need for a data feedback capability to the users.

Regular meters are traditionally read manually by utility personnel on a monthly basis, according to Evensen. A resident receives a record of his household’s consumption along with the electricity bill.

"What we need is a system that can provide an hour-by-hour report on energy consumption so that a users can alter their power [consumption] more accurately and realize greater savings," said Evensen.

He said smart meters offered by Cellnet incorporate a radio module that allows the meters to transmit data to monitoring stations that in turn can send the information to power providers and users.

Cellnet’s meters are being used in around five million homes in the Los Angeles area.

Evensen said the meters also support power monitoring for utilities. For instance, the meters can be programmed to alert monitoring stations about energy theft or meter tampering. The devices will also report on the exact location where a sudden drop of voltage occurs.

"Currently these functions are not automated. In most cases, manual reading has to be carried out to determine where power theft or voltage drops are occurring," said Evensen.

Thorne of Milton Hydro said his municipality is also testing other reporting schemes to enhance the functionality of smart meters.

The utility provider is working with the University of Waterloo to develop a Web-based portal for consumers that allows informs them of their individual power consumption. At the moment though, the system only reports about readings done on the previous day.

Another project, Thorne said, involves providing users an analysis of their consumption habits. "We will be able to inform users on a weekly basis, what appliances are using up the most energy."

The greater challenge, according to Thorne, however is how to change consumer habits.

April Lindgren
Ottawa Citizen
October 12, 2006

The cost of electricity for the average Ontario household will fall by $6.60 to $55 per month beginning in November, but that’s still more than consumers were paying last winter.

Citing cooler summer weather, better nuclear power plant performance and lower fuel costs, the Ontario Energy Board announced Wednesday that as of Nov. 1, consumers who buy electricity from a utility will pay 5.5 cents per kilowatt hour for the first 1,000 kilowatt hours and 6.4 cents for consumption beyond that threshold. That’s down from 5.8 cents and 6.7 cents, the price in effect during the last six months.

The latest adjustment applies only to the cost of electricity and doesn’t affect the portion of the household power bill dealing with distribution costs.

In six months, the board will review the situation to ensure revenue is roughly in balance with the cost of generating power.

"I’m very pleased with the reduction," Energy Minister Dwight Duncan said. "It bodes well, I think, for future energy prices."

The price decline is one of the rare moments of financial relief Ontario power consumers have had in recent years and comes just 12 months before the next provincial election.

New Democrat Leader Howard Hampton described the latest price change as a "pre-election announcement" and predicted Ontarians won’t notice much of a difference on their final bills.

Conservative Leader John Tory dismissed the price reduction "as more of the Liberals’ self aggrandizing bull."

"People by the thousands will be dancing in the street because they will say that power rates have now only gone up 55 per cent since Mr. McGinty came to office and that that’s a great cause for celebration," he said mockingly.

The cost of electricity makes up about 50 per cent of the total cost to consumers while the cost of distributing the power makes up the balance.

Tom Adams of the electricity watchdog group Energy Probe warned bills will likely go back up next year because utilities will be looking for more money to improve crumbling infrastructure.

He also noted that while the government has signed contracts to increase the power supply, much of the new power is expensive and will eventually push up prices as it comes on line. Companies setting up wind power projects, for instance, are receiving between eight and 11 cents per kilowatt hour, while electricity from new natural gas fired plants will range in price from eight to 10 cents per kilowatt hour.

Duncan insisted the price decline will not jeopardize provincial conservation efforts, noting the two-tier pricing system will still reward households with power consumption of less than 1,000 kilowatt hours a month with lower prices.

Adams, however, said there "isn’t any hope" the Liberals can deliver on their pledge to reduce power consumption by five per cent by the end of 2007.

The latest data available show electricity consumption in Ontario continues to grow by about one per cent per year.

On Aug. 1, the province set an all-time record for electricity use, beating the previous record set in 2005 by 800 megawatts.

While the government painted Wednesday’s announcement as good news, environmental groups were harkening back to the Liberals’ decision not to shut down all the province’s coal-fired plants as promised during the last election.

A new report by Environmental Defence and the Canadian Environmental Law Association identified Ontario Power Generation, the operator of the province’s coal-fired power stations, as the country’s single largest producer of greenhouse gases.

Toronto Star
October 12, 2006

Warming up by the electric heater will cost you a little less this winter, but don’t get too cosy.

Residential electricity consumers who aren’t on fixed-price plans will see rates fall nearly 6 per cent next month to reflect the lower cost of supplying power and a milder summer, according to the Ontario Energy Board.

The reduction means a saving of $6.60 for average consumers, based on a monthly consumption of 1,000 kilowatt-hours of electricity. Delivery charges are unaffected.

But Tom Adams, executive director of energy think-tank Energy Probe, called the cut a short-lived "reprieve" that amounts to only 3 per cent when delivery and other charges are factored in.

And "don’t expect it to last," said Adams, pointing out that, over the next year, electricity customers will have to start shouldering the cost of new gas-fired and wind-power generating units.

Tyler Hamilton
Toronto Star
November 6, 2006

A natural gas plant here. New nuclear reactors there. Massive wind farms in northern Ontario. Surplus hydroelectric power from projects in Manitoba and Labrador.

Who says Ontario is facing an electricity shortage?

On top of conservation efforts aimed at reducing how much electricity we all consume, the reality is there are plenty of opportunities – some cleaner than others – to generate the power this province needs over the next two decades. Even, it should be noted, with the shutdown of all coal-fired plants.

But generation is only part of Ontario’s electricity equation. Under-appreciated in the power supply debate is the crucial role transmission plays in moving electricity around the province. Power generation, like a car, is useless if there are no roads on which to drive, or if the only route into a big city is limited to one lane during rush hour.

"Transmission is undervalued; without transmission you can’t do anything," says engineering consultant Frank Macedo, a 25-year veteran of the electricity sector who once oversaw Hydro One’s provincial transmission assets.

Similar in many respects to how we share the Internet, a transmission network lets us access the power we need without truly knowing where it’s coming from – it’s just there upon request, drawn from a big mysterious cloud through a complex network of high-voltage cables, towers and transformer stations.

We take it for granted. But experts say that attitude is no longer sustainable.

On Friday, the Ontario Power Authority will release a discussion paper outlining what must be done to the province’s transmission system as patterns of energy use, population growth, and power development change over the coming two decades.

The challenges are immense. If the province wants to double the amount of renewable electricity on the grid by 2025, it must survey the land for the best and most economical "green" projects, and make sure enough transmission infrastructure is built to not only collect this emission-free electricity, but to also encourage its development.

Population growth around the province must also be assessed over the next 20 years to pinpoint potential transmission bottlenecks that could cripple economic growth in certain communities.

Meanwhile, the McGuinty government’s promise of shutting down the province’s coal-fired plants, including nearly 4,000 megawatts at the Nanticoke plant on the north shore of Lake Erie, will require a massive re-jigging of transmission lines to keep the entire grid stable.

All of this must be done on top of the day-to-day maintenance and related investment that’s required to keep the whole system humming. "The average age of the transmission system is something like 56 years old," says energy expert Tom Adams, executive director of Energy Probe. "It’s a priority just caring for existing assets." Need No. 1:

By 2025 the provincial government wants to double the amount of electricity supply that comes from renewable sources. That’s an increase from 7,855 megawatts in 2005, which includes generation from Niagara Falls, to 15,700 megawatts over the next 19 years.

Where will this additional clean power come from? Some through the government’s new standard-offer program, which buys renewable electricity at a premium from small producers of hydro, wind, biomass and solar power.

But a lion’s share is expected to come from larger wind and hydropower projects that are not near existing transmission corridors, or are located where lines are near full capacity.

"As you build out the grid you have to ask how much of it is going to be set aside for renewables," says John Kourtoff, president and chief executive officer of Trillium Power Energy Corp., which has a number of projects under development.

For example, GE Energy recently released a study of Ontario’s wind resources that found the province could easily add 5,000 megawatts of wind generation to its electricity system with "negligible" impact on the overall operation and stability of the grid.

But the best wind resources tend to be far from where power is consumed. The challenge is to capture wind energy from around Georgian Bay, Lake Superior and James Bay, and bring it to power-hungry communities in southern Ontario, without breaking the bank on transmission.

Even wind projects around Windsor and Ottawa need to see transmission upgrades before development can begin.

"You can’t start soon enough getting some of these transmission projects going," says Mike Crawley, president and CEO of wind developer AIM PowerGen Corp., which has a 100-megawatt wind farm along the northern shore of Lake Erie.

"There are a lot of companies investing big money in projects that are still uncertain. You don’t want to see that being scared away because of transmission constraints."

Crawley points out that many wind developers have four- or six-year land options that are about to expire. "Some of those companies might decide to leave Ontario until there’s a clear roadmap on where and how this transmission is going to be built."

The fact that it takes only a couple of years to get a wind farm up and running and more than 10 years to construct new high-voltage transmission links means transmission must be planned and built in anticipation of – indeed, to encourage — future development of renewables.

It hasn’t always worked that way. In the past, transmission and generation often competed for resources, and planning for one wasn’t necessarily in harmony with the other.

"Transmission needs to be integrated with generation," says Macedo. "Right now, the problem is that transmission can’t be built unless there’s generation, but generation can’t be built until there’s transmission. So there’s this catch 22 situation, and we’ve got to get away from that."

Still, observers like Adams say the government has to be smart about where it invests in transmission. For example, the capacity of transmission lines going up to Bruce County is currently being expanded to accept power from two refurbished nuclear reactors at Bruce Power and new wind farms in the area. That’s two bangs for the buck – a no-brainer.

But building an entirely new high-voltage line can cost roughly $3 million per kilometre, a lot of money just to tap an intermittent resource such as wind. "I’m not anti-wind," says Adams. "But there’s a limit to how much wind power we can take, unless we’re prepared to blow the budget on transmission." Need No. 2:

One way to help justify such an investment is to learn from Quebec, which has built transmission to areas where wind and hydroelectric projects can complement each other.

Waterpower is emission-free, but unlike wind, it’s flexible and easy to control. When the wind isn’t blowing, a hydroelectric facility can increase its water flow. It can also turn down its water flow and build up its storage reserves when the wind is at its strongest.

Ontario has 190 potential waterpower sites that, collectively, could produce about 7,500 megawatts of power on their own. Most sites are located in northern Ontario where, like wind, transmission will be needed to tap it.

Another hitch is that many are in provincial parks or on Aboriginal lands, meaning a potential minefield of regulatory, environmental and land-claim issues.

The challenge for the power authority is to find the least controversial locations where wind and hydroelectric projects are clustered, ultimately improving the economic case for a speedy buildup of transmission.

"The optimization of wind in Ontario is going to be directly related to our ability to have some storage in hydro," says Paul Norris, president of the Ontario Waterpower Association.

Another less-talked-about option is pump storage. This involves using electricity during off-peak periods or from wind generation to pump water from a lower location, such as a lake or abandoned mine, to a higher location, such as an artificial or naturally occurring reservoir.

When electricity is needed during peak periods, water released from the higher reservoir turns a turbine as it falls to the lower location. In this sense, a pump storage station is like a big natural battery that can store power during periods of low demand and release it when demand is peaking, such as on hot days when air conditioners are cranked up.

One proposed project in northern Ontario would spin eight turbines, creating 2,500 megawatts of power on demand for 18 solid hours – enough to offset about a third of the province’s coal-fired generation. The location is windy, meaning wind turbines could be set up nearby to help pump the water back up to the reservoir.

But again, substantial transmission would be needed to get that power to Toronto and the rest of southern Ontario. The numbers would have to be crunched to justify such a large investment.

Norris said pump storage, which is more popular in certain parts of the United States, has never been given serious consideration in Ontario. "My expectation is that it’s going to be an area of interest going forward," he says.

Other areas of hydroelectric interest lie beyond Ontario’s borders. "Quebec has god-given storage," says Amir Shalaby, vice-president of system planning for the Ontario Power Authority.

Ontario has several transmission inter-ties into Quebec. It’s conceivable, Shalaby once told the Star, to pump intermittent wind and off-peak grid power into Quebec for hydroelectric storage, and then access that power under contract with Hydro Quebec when Ontario needs it.

There’s also the potential, talked about for decades, of an east-west grid tapping clean hydroelectric power in Manitoba and Labrador. Newfoundland and Labrador Hydro wants to develop a 2,800-megawatt project at Lower Churchill Falls by 2015 and sell much of that power through Quebec and into Ontario. The McGuinty government is watching cautiously and open to discussion.

On the other side of the border, Ontario is still interested in Manitoba’s proposed Conawapa hydroelectric dam project, which would generate 1,250 megawatts of clean electricity – if we want it.

Wanting it, however, would require construction of a new transmission corridor stretching from Kenora to Toronto, roughly equivalent to the distance between Toronto and Orlando, Florida. The price tag, including generation and transmission, could easily approach $10 billion – a tough figure for any government to swallow.

"I think it would be the biggest expenditure ever made in Ontario on transmission," says Macedo, the engineer.

On top of cost, the path would be lined with all sorts of hurdles – negotiating rights-of-way with Aboriginal groups, environmental assessments, reaching a fair purchase contract with Manitoba, and fighting community NIMBYism along a 1,500-kilometre stretch of country.

But if wind and hydroelectric projects in Ontario could piggyback any link to Manitoba, it might be worth the cost, effort and wait over the long run, says Macedo. A transmission line to Conawapa could prove a boon for development in northern Ontario, and would mark the beginnings of a national east-west grid.

Trillium Power’s Kourtoff isn’t so convinced. He believes Ontario would be better off developing transmission to tap its own resources first before building all the way to Manitoba in an act of desperation.

Rather than lock into a long-term contract with our neighbour to the east, he believes Ontario could position itself to become an exporter of its own clean power to the United States, if the political will existed. "Ontario doesn’t need to have a gun held against its head," says Kourtoff. "Let’s do what’s here, in our own borders, then look outside." Need No. 3:

But spending on transmission isn’t all about supporting generation. The government’s plan to shut down Ontario’s coal-fired plants is a case in point.

"If we’re cutting out all the coal, then major aspects of our transmission system have to be reconfigured," says Adams. "At minimum that means vast increases in inter-tie capacity to other jurisdictions, new transformer stations and new generation."

Nanticoke, for example, isn’t just a plant that can supply 4,000 megawatts of dirty power to Ontario. The massive generating station is an anchor for the grid, providing voltage support for the transmission system.

Voltage is equivalent to pressure, kind of like the pressure you would need to keep water flowing from a municipal water-purification facility to the faucets in your home.

Under the basic design of an electricity system, generating stations connect to high-voltage transmission lines (110,000 volts or greater) that carry power over long distances to local low-voltage distribution networks (less than 50,000 volts), where the electricity eventually makes its way to your home or business at a mere 120 volts.

Powering down a gigantic source of generation like Nanticoke would remove enough pressure that voltage on transmission lines would sink and power couldn’t be imported from Michigan or transmitted from Bruce Power. Greater Toronto would be in trouble.

"The problem is not insurmountable, it just requires planning," says Bob Chow, director of transmission integration at the Ontario Power Authority.

One way of replacing the voltage support provided by Nanticoke is to put a cleaner form of generation in its place, such as converting the facility to burn on natural gas instead of coal. This proposal has been advanced by the Ontario Clean Air Alliance.

But replacing generation at Nanticoke may be just part of the answer. The power authority is looking at a number of options, including the use of advanced power electronics – something called thyristors – to manage and support voltage levels. Other more conventional devices can also do the trick, but whatever the approach it will be a costly and complex exercise. The power authority will have to choose the combination of approaches that make sense and are most economical.

Need No. 4:

Ontario is growing – some places more quickly than others. The power authority’s job is to identify potential transmission bottlenecks in communities that are rapidly expanding to accommodate rising populations, particularly in the northwest.

Cambridge, Windsor, southern Georgian Bay and the Greater Toronto Area are among several communities identified by the power authority as "transmission priorities," though building new lines isn’t the only answer.

In Toronto, for example, the two major transformer stations that bring electricity into the city – Leaside and Manby – are at capacity, and building new infrastructure to provide relief would take too long.

"In a built-up area, you can’t bring major transmission into the GTA easily," says the power authority’s Bing Young, who oversees transmission needs for the Toronto area. "The only relief in the near-term is to provide local generation."

This is why several high-efficiency natural gas plants, such as the Portlands Energy Centre near downtown and Goreway Drive Generating Station in Brampton, are under construction.

Looking longer term, the power authority says it is working closely with municipalities, provincial departments and other stakeholders to make sure transmission planning isn’t being done in isolation, as it was in recent years.

It’s also looking at how targeted conservation efforts and emphasis on efficiency can help defer the need to build new transmission lines in communities that would prefer to avoid it.

There’s a lot of work to do, but observers such as Trillium’s Kourtoff believe the power authority is heading in the right direction, at least from the perspective of a power developer. He’s more confident than he’s been in the past: "I can certainly say there’s knowledge there of what needs to be done."

April Lindgren
CanWest News Service
November 9, 2006

Ontario’s chief conservation officer says electricity consumption is down in the province because citizens are keen to conserve, but skeptics say plant closures in the faltering manufacturing and forestry sectors are a more likely explanation.

Conservation chief Peter Love issued his annual reporter Wednesday that showed overall electricity consumption declined by 1.5 per cent between January and August compared to the same period last year after differences in weather were factored in. Consumption per capita fell by 2.5 per cent over the same period.

"Energy efficiency is happening. We have made a start," said Love.

Citing a complex set of calculations and assumptions, he insisted the province is well on its way to meeting the Liberal government’s pledge to achieve a five per cent 1,350 megawatt reduction in peak demand by 2007.

Love conceded, however, that the government’s goal of cutting projected electricity demand by 6,300 megawatts by 2025 a goal that would mean demand 20 years from now will still be at 25,000 megawatts will be much tougher but still achievable.

"This report is bogus," Ontario NDP Leader Howard Hampton said. "What we have is the shutdown of dozen of forest product mills which have resulted in a significant drop in electricity consumption.

"I’ve never seen an attempt to spin the loss of 136,000 manufacturing jobs as energy conservation and energy efficiency before. What we’ve seen over the last year and a half has been more an exercise in media spin and less an exercise in energy efficiency or conservation."

Hampton said if the government was serious about conservation, it would copy programs in Manitoba and Quebec where homeowners have access to low-cost loans that they can use to retrofit their homes to make them more energy efficient.

The province’s Independent Electricity Supply Operator has also said lower industrial demand will have an impact on power use.

"Despite the record peak demand set this summer, reduced energy-intensive industrial load has led to lower energy demand in 2006," it noted in its 18-month outlook released in September.

"Annual energy demand is expected to shrink by 0.2 per cent in 2006 before rebounding due to the loss of energy-intensive industrial demand."

Tom Adams, executive director of the watchdog group Energy Probe, also questioned Love’s claims. Peak demand on Aug. 1 topped 27,000 megawatts, he said, noting that is already higher than the peak demand of 26,992 megawatts forecast for 2007.

Adams said his own research suggests that some local distribution utilities are overstating the amount of energy savings their local conservation initiatives have achieved.

He also suggested it is in the government’s interest to have the public believe conservation efforts are underway and working. In addition to fulfilling a Liberal campaign promise, he noted, it will helpful if vigorous conservation efforts are underway when it comes time to justify the need for new, expanded nuclear power plants.

Recent conservation initiatives in Ontario include a new building code with tougher energy efficiency standards that is being phased in, higher electricity prices and special programs such as a fridge bounty program aimed at getting old, inefficient fridges out of service. Local utilities are also cutting cheques for $25 to homeowners who let them install gadgets that allow air conditioners and hot water heaters to be shut off remotely during periods of high demand.

Conservative MPP John Yakbuski said Love’s report selectively used data that made it look like the Liberals were on track toward achieving their conservation goals. In real terms, he noted, electricity consumption is up, not down from 2003 when the Grits came to power.

"Convenient statistics cannot hide the truth that promises have again been broken by this government on the energy file," he said.

CBC News

November 15, 2006

An energy watchdog is criticizing Ontario for pushing back the closing dates for the province’s coal-fired power-generation plants, saying political manoeuvring is harming the public’s health.

The criticism comes in response to news that the province is unlikely to close coal-fired plants until 2014, seven years past the original closing date promised by the Ontario Liberals.

When Premier Dalton McGuinty took power, he scrapped the Progressive Conservative’s plan to install scrubbers and other emission controls on the two biggest plants, saying the province would instead close them by 2007.

"The Liberals made a promise that they should’ve realized was just not going to happen," said Tom Adams, executive director of Energy Probe.

Adams said that the province is hurting public health because the insistence that coal plants could be closed earlier meant no investments were made in anti-pollution technology.

Progressive Conservative Leader John Tory also slammed the government for delaying the closure of coal plants for the second time. The Liberals first promised to close them by 2007, then changed the date to 2009 and now have delayed it further to 2014. Continue Article

"They’ve harmed the health of people in Ontario by not acting sooner and maintaining this political fraud," he said.

But McGuinty said that the province is looking into ways of making the plants cleaner in a way that is a justifiable use of taxpayers’ money.

He refused to comment on whether he will revive the Tory plan for outfitting all the coal plants with scrubbers and other anti-pollution equipment.

"We’ve got to figure out what’s the best way to invest dollars given the sequence of projected closings of various coal-fired generators," McGuinty said.

Four of the 12 units at Lambton and Nanticoke, the two biggest plants, have emission controls, he noted.

To retrofit all of the units could cost more than a billion dollars. Heavy reliance on coal

Adams says he wishes it wasn’t the case, but coal is an essential part of the province’s electricity supply, and promising to close coal-fired plants by 2007 was never realistic.

Considering the amount of electricity coal plants produce, Adam says, closing them by 2007 would have put out the lights in Ontario much of the time.

He said natural gas is an extremely expensive alternative, while wind power can’t provide a reliable substitute.

A 2005 report for the Ontario Ministry of Energy found that 660 people die every year from pollution emitted by the Nanticoke and Lambton plants.

Shawn McCarthy
The Globe and Mail
November 30, 2006

Cameco Corp. says it is laying the groundwork for an expected boom in uranium demand from China, as the Chinese and Canadian governments pursue talks that would facilitate Canadian exports to the nuclear weapons state.

But Canada is lagging Australia, its main competitor in the uranium exporting business, which signed a deal earlier this year with its Asian neighbour that will allow for exports and for Chinese investment in uranium mining there.

On his trip to Beijing earlier this month, Natural Resources Minister Gary Lunn agreed with his Chinese counterparts to pursue negotiations on a framework deal – including issues of non-proliferation – that would open the door for Canadian uranium sales to China.

Saskatoon-based Cameco, the world’s largest uranium producer, has encouraged Ottawa to reach a deal with the Chinese, and is maintaining its own marketing effort. But it is not expecting a sudden boom in sales.

"We see China as more of a long-term opportunity because of its ambitious nuclear energy program," Cameco’s Lyle Krahn said Thursday. "And we have established regular contracts with them, and meet with them periodically."

He said China consumes about three million pounds a year of uranium, less than 2 per cent of the world market. That demand will grow exponentially if the country proceeds with plans to build 18 new reactors over the next decade. It now has nine reactors in operation.

"Whether we sell to China or some other company sells to China, ultimately [its growing demand] takes uranium out of the market, and ultimately is beneficial to us anyway," Mr. Krahn said.

China is a signatory of the Non-Proliferation Treaty, and Australia’s deal to export uranium to the rapidly growing Asian power provoked little controversy in the United States. Critics there were far more concerned about the U.S. government’s decision to begin nuclear co-operation with India, which is not a member of the treaty.

But Norm Rubin, of Toronto-based Energy Probe, said the sale of uranium to any nuclear weapons state is immoral and wrongheaded.

"If you think nuclear weapons are part of the problems of the world and one of the threats to civilization, then the idea of sharing the life blood of that stuff with the people who are using that life blood for a pursuit you perceive as evil makes you evil."

Mr. Rubin said he doesn’t accept the argument from Cameco and other uranium exporters that they are selling only for the civilian purposes of nuclear energy. The imported uranium allows military powers to devote their own sources of uranium to supply weapons systems, he said.

The anti-nuclear activist also questioned the projections of a nuclear renaissance, noting that very few of the reactors that the industry claim will come on stream in the next decade have actually received approval.

Cameco, itself, sounds a cautionary note, even as it forecasts a major jump in reactor construction, with 82 new reactors expected to be built by 2015.

"It is difficult to know whether these trends and the national debates on the long-term future of nuclear power will result in more or less favourable conditions for the nuclear industry," the company said in its most recent annual report.

One analyst predicted the market for uranium will continue to boom after years of low prices discouraged production and boosted consumption. Spot prices for uranium have risen 75 per cent this year to $63 (U.S.) a pound and show no signs of easing, said Jeff Combs, president of Ux Consulting Co., which tracks uranium markets.

Mr. Combs said U.S. utilities have concerns about China’s growing appetite for uranium because the Asian giant has the capacity to lock up supplies through long-term contracts, thereby sending prices on the spot market even higher.

"It would just put pressure on a market that is already suffering from underproduction," Mr. Combs said. "It’s like other things: The Chinese basically are going out and buying oil and steel and a lot of other commodities, and driving up prices."

Oilweek Magazine
December 11, 2006

Ontario’s hydro companies will be kept on a tighter leash now that the province is on the hook for $3 million in severance for the chief executive of transmission giant Hydro One, Premier Dalton McGuinty said Monday.

The province will be keeping a close eye on the Hydro One board to ensure executive salaries and expenses are kept under control in the wake of a scathing report by Ontario’s auditor general, McGuinty said.

Former chief executive Tom Parkinson resigned last week after the auditor exposed $127 million in Hydro One corporate card charges that were approved without proper documentation, including $45,000 Parkinson charged to his secretary’s credit card.

"We will work more closely with the board to ensure that Mr. Parkinson’s successor sets the appropriate tone of accountability for Hydro One," McGuinty said, adding the utility must use taxpayer dollars carefully.

The governing Liberals will also be keeping close watch to ensure the next CEO’s salary is reasonable, McGuinty said.

"These are highly sophisticated organizations," McGuinty said of Hydro One and Ontario Power Generation. "They require exceptionally talented people to provide leadership. But at the same time, they are public organizations and we’ve got to be accountable ultimately to taxpayers."

Parkinson earned a $780,000 salary in 2005, plus $702,000 in bonus incentives and $130,000 in other compensation, including a $40,000 "executive allowance." Part of the mortgage on his home in Oakville, Ont., west of Toronto – $125,000 – was also paid by the company.

While Parkinson’s $3-million severance has been met with anger and outrage, McGuinty said it was the cheapest way to get rid of Parkinson.

Former CEO Eleanor Clitheroe filed a $30-million wrongful dismissal lawsuit after she was fired in 2002 amid a public outcry over lavish spending and her $2.2-million salary. The case is still before the courts.

"It is explosive and it’s touched a nerve with Ontarians," Energy Minister Dwight Duncan said of the auditor’s findings. "We want to make sure that, whatever we do, we get it right."

But he said the utilities are taking steps to address the problems.

At Ontario Power Generation – employees there charged $6.5 million to corporate credit cards without receipts and spent $8,000 on leather jackets for long-serving employees, the auditor found – the system of tracking expenses has been upgraded and expensive gifts have been banned.

Critics say the government isn’t doing nearly enough to change the culture at Ontario’s utilities. Conservative Leader John Tory said few people get severance when they quit a job, let alone when they leave under "a cloud."

Vowing to keep a closer eye on Hydro One’s board is nothing but a "deathbed repentance," Tory said.

"This man presided over a company where there is a litany of abuse of ratepayer and taxpayer money and some question about his own expenses," he said." He then quit under a cloud – I’m wondering why he got paid anything."

NDP Leader Howard Hampton said the government hasn’t done anything to solve the underlying problems at Hydro One. The board – which approved Parkinson’s expenses and accepted his resignation with "deep regret" –is still there, he said.

The government should have a public inquiry into Hydro One to examine how disproportionate executive salaries and perks are, Hampton said.

"They’re not going to do that," Hampton said. "I don’t think you’re going to see much change."

Still, some say more government interference will only hurt the province’s utilities. Tom Adams, executive director of Energy Probe, said Parkinson was getting paid appropriately and was only fired because of the political firestorm created by the auditor’s report.

With Hydro One under a political microscope, Adams said the company will end up with a CEO who is more interested in pleasing the "political whims of the day" than running a profitable utility.

"We’ve seen a lot of this in the past of political supervision by people who don’t know the business at all," he said. "It never works out well."

Alan Findlay

December 21, 2006

 Natural Resources minister says Alberta oilsands will soon be nuclear-powered 

Nuclear power in the oilpatch is just a matter of time, according to Canada’s Natural Resources Minister Gary Lunn.

Speaking to Sun Media from Victoria yesterday, Lunn said he’s very keen to see a new partnership between Crown corporation Atomic Energy of Canada Limited and a private Alberta company to build a Candu-reactor to power oilsands extraction.

"It’s not a question of if, it’s a question of when, in my mind," said Lunn. "I think nuclear can play a very significant role in the oilsands. I’m very, very keen."

Having toured nuclear plants like Bruce Power’s station on the shore of Lake Huron, Lunn said he believes nuclear power can help replace natural gas and other fossil fuels currently being burned to help extract bitumen from the oilsands.

"On this specific file, I’ve had discussions this week," said Lunn, declining to give more detail. "It’s absolutely emission free. It’s CO2 free."

Lunn’s comments come as AECL and Energy Alberta Corporation pitch oilsands companies on the merits of nuclear power as production rapidly expands.

The concept has generally been given a chilly reception within industry. Groups such as the Canadian Heavy Oil Association have been skeptical in part because of the scope and multibillion-dollar cost of a nuclear project.

But officials from both the AECL and Energy Alberta say interest is growing.

A public opinion survey commissioned last year suggested only 40% of Albertans favoured the notion of building nuclear power, but another 30% were neutral to the idea.

The suggestion that 70% of Albertans aren’t averse to nuclear power in their backyard has generated interest within industry.

"The interest level has peaked," said David McColl, in charge of business development for Energy Alberta.

One possibility being discussed is a nuclear plant that would heat steam for oil extraction and also power electricity generation, McColl said.

Energy Probe‘s Tom Adams said the lowering price of natural gas and innovative, non-nuclear projects in the works will take the shine off atomic projects in Wild Rose country.

"I think that the oilsands people are not nearly as desperate as they used to be," said Adams, who is an outspoken critic of nuclear power.

Sierra Club of Canada executive director Stephen Hazell criticized the AECL and Alberta Energy initiative for not being more active in ongoing provincial consultations on managing Alberta’s growing oil and gas sector.

In a departmental memo obtained by Sun Media through an Access to Information request, Lunn is advised to keep a low profile on the issue of nuclear energy in Alberta because of its sensitivity.

Lunn said he had never seen the memo.

"I get memos I don’t always agree with," he said.