Pickering nuclear units among the most expensive, least reliable in the world

by John Spears, Business Reporter. Read the original article at The Star

The economic performance of Ontario Power Generation’s Pickering nuclear stations is among the worst in the world, says a report prepared for the Ontario Energy Board.

Not only is it the most expensive to operate, it lags at the far end of the pack in terms of reliability, with some units shut down almost 40 per cent of the time.

The report recommends an incentive system that would base OPG’s payments for nuclear power on future improvements.

But the company says it is well aware of the benchmarks used in the energy board report, and is already taking steps to improve performance.

The energy board regulates the prices paid to OPG for its nuclear output, and for power generated from its biggest hydro-electric stations.

The latest report, by Power Advisory LLC, flays the performance of both Pickering stations A and B. Pickering B has four operating units; Pickering A has two operating units with two in mothballs.

Power Advisory notes the findings of a report previously filed by another consulting firm that “the Pickering A and B plants have among the worst, and on some measures the worst, operating measures” among nuclear generating stations worldwide.

The performance by the units at OPG’s Darlington nuclear station is much better, the report says – “consistently above the median.” Darlington is about 20 years newer than the Pickering stations.

All the OPG plants score well on safety.

But the Pickering plants’ operating performance is so low that it drags OPG to the back of the pack when compared with other companies that operate nuclear plants.

For example, on a key reliability measure that tracks nuclear units’ overall capability, OPG ranks 18th out of 20.

And measuring generating cost per megawatt hour, OPG ranked as the most expensive operator among its peers.

It wasn’t even close to mid-level performance on the latter measure. Pickering A’s cost per megawatt hour was close to triple the industry median. Pickering B’s costs were nearly double the industry standard.

Part of Pickering’s high cost is structural: It has relatively small reactors, which by their nature are more expensive to operate.

But Power Advisory also notes previous studies that show OPG’s staffing levels and costs are greater than those of other nuclear operators.

The energy board, which regulates the price OPG receives for the output of its nuclear plants, chopped $90 million from OPG’s permitted revenue over the past two years because of high staffing costs.

And the Pickering units are forced out of service far more often than their peers.

One key measure for nuclear plants is their “forced loss rate.” That’s the amount of power a plant is unable to produce because of unplanned shutdowns.

Pickering’s A units had a forced loss rate of 37.9 per cent over two years in 2009-10; Pickering B’s rate was 18.2 per cent.

The median performance for North American reactors was less then 2 per cent.

Ted Gruetzner, a spokesman for OPG, said the company has been working to improve performance, and results are already showing.

For example, he said the forced loss rate for Pickering A was 22.8 per cent last year; for Pickering B it was 5.4 per cent.

One of the Pickering units that had contributed to the poor results cited by the report was one of the world’s top-10 performing Candu units last year, Gruetzner said.

OPG has also reduced staffing in its nuclear division through attrition by 500 people over the past several years.

“There is progress being made, but obviously still work to do,” he said.

Gruetzner noted that OPG has forged a nuclear business plan, looking forward to 2014, to address the problem areas.

The Power Advisory report acknowledges the plan, saying that if OPG achieves the plan’s goals it will chalk up a “significant improvement.”

Going forward, Power Advisory recommends basing OPG’s payments for nuclear power on its ability to improve performance.

“Effectively, in this option the future price will depend not on the actual costs in future years, but on the cost that would result if OPG achieves reasonable efficiency targets in future years,” it recommends.

The Pickering nuclear units are coming to the end of their expected life, but OPG is working to extend their shutdown dates past 2020.

That will allow them to operate while the Darlington nuclear station goes through a mid-life overhaul, starting in 2015 or 2016. The Darlington units will undergo periodic shutdowns during the project, which is likely to last until 2023.