Does anyone want a nuclear sandwich?
Nuclear ambitions
Report Success of 2nd reactor: long-term commitments for the energy, deep pockets to absorb the risk
Daniel McHardie
Telegraph-Journal
Published Monday February 4th, 2008
Appeared on page A1
FREDERICTON - Surrounded by energy-starved provinces and states, New Brunswick is in a prime position to sell power from a second nuclear reactor with the regional market potentially able to support two new units, according to a consultants report.
The pieces are starting to fall into place for Energy Minister Jack Keir and the Liberal government's nuclear ambitions that have until now rested on two crucial reports into the potential success of locating the world's first 1,100-megawatt ACR-1000 at Point Lepreau. The next significant component to that plan will come today when Keir releases the MZ Consulting Inc. report in Saint John that will reveal a relatively unobstructed path to success in building and exporting power from the proposed reactor.
"There are no roadblocks that say this thing can't be done, but on the contrary there is optimism coming out of these reports that it can happen," Keir said in an interview.
Recommendations from that report show there is a potential market, mainly driven by cost and environmental considerations, the Telegraph-Journal has learned.
The Department of Energy hired MZ Consulting for independent oversight of Team Candu-New Brunswick's $2.5-million feasibility study into the project that was announced on Aug. 1. The MZ Consulting review was intended to assess the future markets and pinpoint any potential financial pitfalls the Liberal government could encounter by forging ahead with a second nuclear unit.
"This would displace oil in New Brunswick, coal in Nova Scotia, oil-fired exports to P.E.I. and be for export to New England," the report said.
The only flags raised when the consultants examined the market landscape that would await any nuclear facility are the potential transmission bottlenecks in New England and the inability for long-term power purchase agreements to be signed by utilities in the region.
Before looking south of the border, about half the power generated by a single nuclear plant could be sold within the Maritime provinces.
The report is also advising that the new power from one reactor could be sent over traditional land transmission instead of turning to underwater cables.
Broadening the project to two reactors would bring on additional risk, the consultants warned.
"Taking the output of two units would require a large commitment from the export market, require large new transmission projects to proceed that would add risk, and is less likely in the shorter term," the report said.
Keir now has both the Team Candu study and its own independent review, setting the stage for a final decision in May on the province's nuclear future.
The Liberals will use these two reports to render a final decision on whether, for a second time in its history, New Brunswick will lead the world in experimenting in new nuclear technology.
Atomic Energy of Canada Ltd. convinced New Brunswick to put its first Candu-6 reactor in Point Lepreau, a 635-megawatt project that was delivered late and at roughly double the original budget.
More than 20 years later the most glaring difference this time is that AECL is partnering with several other major corporations that are willing to pay the total tab and offer the province the option to buy into the reactor if it wants a piece of its future profits.
There has never been a merchant nuclear plant built in the world, leaving MZ Consulting to conclude that success will require long-term commitments for the energy and with the proponent of the project with deep enough pockets to absorb all of the risk.
The report says that Team Candu should be responsible for all of the project's "first-of-a-kind" risk. It also suggested that having NB Power act as the project proponent could be a lower cost option, but that would transfer more risk and debt to the province.
The proposed second reactor has been an integral component to the Liberal government's desire to transform New Brunswick into an energy hub for the eastern seaboard.
Keir and Graham have travelled across New England talking to politicians and power utility executives about the opportunities of selling surplus electricity into the power-starved U.S. market.
MZ Consulting studied whether there the market was as insatiable for new power as Keir and Graham have been touting. As well, the consultants examined what the business case would be, what risks would come with the project and the economic benefits for "new nuclear facilities."
The Liberal government has only seriously engaged in discussion of one nuclear power plant, although there is room for additional reactors to be located next to the existing Point Lepreau reactor. An Alberta-based company is presently considering a twin ACR-1000, generating 2,200 megawatts and costing $6.2-billion.
The New Brunswick project's business case could depend heavily on the final cost of the project, which has not been officially released, and the cost of electricity in the market.
Considering how the environment is an escalating public concern globally, the economics of the project would become even more favourable if governments start implementing carbon taxes.
Going forward with the second reactor would be yet another mega-project in southern New Brunswick, a region that is mushrooming with massive economic development initiatives. Although a final price tag has not been attached to the ACR-1000, it is expected to create 4,000 construction jobs and 500 full-time positions once it is operating.
Place those figures along side the $1.4-billion Point Lepreau refurbishment project and $1.6-billion Potash Corp. second mine development near Sussex as well as the potential for a $7-billion second oil refinery.
Team Candu-New Brunswick is comprised of Team CANDU New Brunswick draws on the experience and expertise of Atomic Energy of Canada Limited, Babcock and Wilcox Canada, GE-Hitachi Nuclear Energy Canada Inc., Hitachi Canada Ltd and SNC-Lavalin Nuclear Limited.
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Every man's life ends the same way. It is only the details of how he lived and how he died that distinguish one man from another.
--Ernest Hemingway
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