Ontario’s heavy bet on nuclear power could backfire by driving up electricity costs and increasing the province’s reliance on US natural gas, a new analysis warns.
The report by the Pembina Institute, an energy and climate research group, examines Ontario’s long-term plan called Energy for Generations, which aims to meet a projected 75 per cent rise in electricity demand by 2050. The plan shows nuclear power would supply more than 70 per cent of the province’s electricity by mid-century, up from about 50 per cent today.
The Ford government is investing billions to rebuild its existing nuclear reactors and planning large new units and small modular reactors to meet future demand. Ontario will also rely more on fossil fuels, with carbon emissions rising until at least 2030 while the province refurbishes its existing nuclear plants.
But the Pembina report warns Ontario is “making quite a risky bet” by leaning on natural gas in the short term and new nuclear in the long term, while missing low-cost opportunities in wind, solar and energy storage.
David Pickup, manager of Pembina’s electricity program and one of the report’s authors, said the provincial government’s long-term plan puts energy security and affordability at risk at a time of uncertain trade relations.
“Electricity is hugely important across society and in everyone’s homes. The cost and affordability is so critical in energy,” Pickup said. “The Ontario government actually says ‘affordability first’ in their own plan, which is why it is confusing to us that there is such a big bet on nuclear projects, which today are already significantly more expensive than other options such as wind and solar.”
The Pembina report warns Ontario is “making quite a risky bet” by leaning on natural gas in the short term and new nuclear in the long term, while missing low-cost opportunities in wind, solar and energy storage.
Delays and higher costs
According to the Pembina analysis of nuclear projects worldwide, new developments have been finished an average of six years late and at double their original cost. If Ontario follows that trend, the Darlington small modular reactors (SMRs) could be delayed from 2036 to 2042 and cost more than $40 billion, instead of $20.9 billion.
“When you put that much stock in an expensive technology that also has delivery risk, the question becomes whether that is something you should be relying on for 70 per cent of your system in 2050,” Pickup told Canada’s National Observer. “To be clear, if you build a technology that delivers expensive energy, that will increase bills.”
Ontario currently gets about half its power from nuclear, about one quarter from hydro, roughly 16 per cent from gas, nine per cent from wind and just over two per cent from solar.
Electricity prices in Ontario have already risen 29 per cent this year, partly tied to nuclear spending.
More dependence on US gas
Ontario relies heavily on imported gas, with about 70 per cent coming from the US and the rest flowing through pipelines from Alberta.
“Cheaper US gas means one of the Canadian pipelines (TCMainline) runs at around half its capacity. This leaves Ontario with a difficult decision if it increases gas use to meet short-term electricity needs,” the report says. “It can either import more gas from the US, which risks energy security during a time of uncertain trade relations, or increase the flow through the Canadian pipeline, which would raise costs for consumers and industry.”
Greater use of gas also brings more price volatility because gas costs swing with global markets.
If nuclear projects fall behind schedule, gas will fill the gap, the Pembina report says. That would raise emissions and extend dependence on imported fuel. In a worst-case scenario, Ontario could still be using as much gas in 2050 as it does in 2030.
The existing Ontario nuclear fleet uses Canadian uranium, but the new SMRs rely on a source elsewhere, likely the US and possibly Europe. “We are essentially locking in for 60 plus years importing fuel to power our growth and power the province’s economic engines,” Pickup said.
Missed chances on renewables
The Pembina analysis says Ontario is overlooking major chances to expand low-cost renewables. Solar costs have fallen 88 per cent since 2009 and wind costs have dropped 74 per cent, it added.
Pickup says wind, solar and battery storage can be built in a few years while nuclear projects often take more than a decade. He also says renewables strengthen energy independence because they do not rely on imported fuel.
“You compare that to something like wind and solar where, yes, you do have to import the technology, but then the systems are going to run for 30 plus years without any imports of any fuel,” he said.
The province’s plan says the role of renewables will grow over time. Starting in 2025, Ontario will add nearly 3,000 megawatts of energy storage.
The government plan argues nuclear power is more cost-effective and land-efficient than wind and solar, but analysis from the Ontario Clean Air Alliance says solar does not need large areas of land. More than half of Toronto’s electricity needs could be met with rooftop and parking lot solar alone.
Studies show electricity from new nuclear reactors could cost up to eight times more than onshore wind, almost six times more than solar and about 2.7 times more than offshore wind in the Great Lakes.
Pickup says if nuclear projects are delayed and gas usage continues to rise, Ontario will struggle to cut emissions fast enough.
The Pembina report recommends opening the door to more private sector investment in clean power.
Canada’s National Observer reached out to the Ontario ministry of energy and mines for comment but did not receive a response in time for publication.
Abdul Matin Sarfraz is a Local Journalism Initiative reporter with Canada’s National Observer.
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