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Andrew Evans: Ontario’s nuclear power ambitions are good news for Canada’s clean energy future

Commentary

Cheap electricity has long been vital for economic competitiveness, but in today’s modern environment, being cheap is no longer enough. Clean generation of electricity is becoming more and more important. Having made incredible strides at reducing the provincial electricity sector’s emissions by eliminating coal-fired electricity generation, Ontario cannot afford to reverse course on a cheap, low-carbon electricity grid.

Fortunately, Canada’s largest province has shown it is thinking proactively about this issue with its comprehensive and recently-released plan, “Powering Ontario’s Growth.” While it features many aspects, including energy efficiency, transmission, and new procurement methods, much of the province’s plan to meet future electricity demand turns on a massive expansion of nuclear energy. The announcement of the expansion of the Bruce nuclear generating station is nothing short of Canada’s most significant public infrastructure project in a generation.Three days later, the government announced an additional three small modular reactors (SMRs) to be built at Darlington, for a total of four. The plan also indicated a strong preference for keeping about two-thirds of the soon-to-be decommissioned Pickering nuclear station online.

The province is acting on the advice of the Independent Electricity System Operator (IESO), the arms-length government agency that is responsible for providing a stable grid. As shown in the graph below, they have predicted that by 2042, peak electricity demand in the province will increase from about 24GW (gigawatts) to just under 32GW. This is compounded by the fact that the IESO has projected that Ontario will face a power supply gap by 2025, and so is rapidly moving to secure enough generation for the short term, primarily filling that gap through new natural gas generation. 

Graphic credit: Janice Nelson. Source: IESO 2022 Annual Planning Outlook

The announced plans at Bruce and Darlington would add 6000MW (6GW) of new clean generation, helping to substantially close the power gap projected by IESO. Combined with the 4000MW of new generation to be acquired in the next two years, this will effectively close the gap between supply and demand. (Ontario is not contesting the 2024 decommissioning of Pickering Unit A, removing about 1000MW). 

If the Bruce project is completed as announced, it would become the largest nuclear power plant in the world, surpassing the Kori nuclear station in South Korea. It would also become the fifth-largest power-generating station of any type in the world.The larger four power stations are supersized hydroelectric generating stations, including three mega-dams on the Yangtze River in China, and the Itaipu Dam in Brazil. All signs indicate that it will also be Canada’s first experience with a private company (Bruce Power) constructing nuclear reactors, a sea change from the days of government-run utilities of Ontario Hydro, Hydro-Québec, and New Brunswick Power building these projects.The new SMRs at Darlington are set to be built by Ontario Power Generation (OPG) and are to be the first SMRs built in the West.

Of course, these accolades are nice to have, but it wouldn’t make sense to do these projects without economic rationale and political alignment. Thankfully, there are clear economic and policy grounds for Ontario to pursue this path.

Lower cost, higher consistency

Critical to any electricity development is the expected cost to generate the electricity at the new site, which has a key role in determining the viability of a project. The price of Ontario nuclear is below the cost of firing up a natural gas-fueled generation station, which drives the overall cost of the system down, helping make overall Ontario electricity prices cheaper and reducing exposure to volatile natural gas markets.

Critics may say that even at that price, nuclear power costs more than renewable sources like wind and solar, which is true, especially as costs have fallen dramatically in solar in recent years. But the issue is that Ontario lacks sufficient generation potential in those sources to power future electricity demands in meaningful ways. In the plan, Ontario reaffirmed that any new projects will also require municipally approved resolutions to proceed, which is likely to slow any new renewable growth in rural Ontario. And until sufficient battery technology is developed to enable long-term storage, what wind and solar we do have will remain inherently intermittent, in contrast to nuclear, which is a guaranteed reliable power supply. 

More jobs

In keeping with their pro-union stance, the Government ensured that it lined up unions to support this policy path, receiving endorsements from the Power Worker’s Union, the Society of United Professionals, and the Ontario Provincial Building & Construction Trade Council. This aligns with the political objectives as outlined by Ontario’s Minister of Labour Monte McNaughton in this outlet, and building new reactors at Bruce and Darlington will see thousands of blue-collar jobs created over years of construction. On top of the on-site jobs, Ontario’s robust nuclear supply chain industry will see increased investment from this project, both in construction and future demand from new sites. 

Investment advantage

The new investments the province is receiving in electric vehicle manufacturing have a fundamental advantage in being powered by a much cleaner grid than our U.S. competitors, so much so that in their news release Volkswagen named this as part of the reason they chose Ontario.

Graphic credit: Janice Nelson. Source: Powering Ontario’s Growth Plan.

As momentum continues to build around carbon border adjustments (essentially tariffs on products from high-emission jurisdictions) in the EU, Canada, and the U.S., being able to manufacture using clean power will become ever more important, giving Ontario another clear advantage in the constant global battle for private investment. 

Smart politics

Finally, the politics of this make sense as well, as Premier Ford was re-elected on a pro-building, pro-union message of Ontario talent, and this aligns perfectly with his brand and objectives. This project will be Canada’s first nuclear station expansion since the 1980s and presents a prime opportunity to contrast a successful private sector entity in Bruce Power with the bankruptcy (caused largely by nuclear project cost overruns) of the public sector Ontario Hydro. For OPG, the chance to build and export SMRs to places like Poland and Saskatchewan represents a major potential new revenue source. Subtlety playing OPG and Bruce against each other is good for sectoral competition, internal cost control, and should not impact safety measures since both will be reporting to the Canadian Nuclear Safety Coalition.

The clear and present danger for the government is that the costs of the nuclear expansion run seriously overboard, causing public backlash, project cancellations, and wider economic unrest.Ontario must maintain public buy-in by allowing the Canadian Nuclear Safety Commission to do its world-leading nuclear safety regulation, but must also clear all unnecessary delays from the project path. It will be a fine line to walk, but the premier has shown an appetite for this type of policy in the past, with the speed of the construction of the Ontario Line being the most prominent example. There has been a systemic reason that nuclear power in the West has been stagnant, with costs ballooning and delays becoming insurmountable to project feasibility. In the U.S., there have only been two new nuclear units constructed since 1996. Both have ended up costing vastly more than projected costs, run seriously behind on timelines, and bankrupted utilities and Westinghouse. If Ontario hits these same issues, economic growth could be seriously imperiled, as inflated costs would be passed on in higher electricity prices, an issue the government spent serious political and financial capital on combatting in its first term. The new SMRs are especially risky, given that first-of-a-kind nuclear projects are especially prone to cost and time overruns. 

To counteract this, the policy must insulate the Ontario electricity ratepayer, potentially by seeking increased risk or cost overruns to be taken on by Bruce Power, and serious public oversight of the costs at Darlington. Future discussions should consider how incentives for path dependency may lock Ontario into outcomes that will be disadvantageous, and how to avoid them. 

Expansion of Ontario’s nuclear capacity is a tremendously exciting project, with generational potential to put Canada and Ontario into a class of their own in a high-value, critical sector of the global economy, rebounding in our own economy in ways we cannot fully know. As Edward Greenspon and Sean Speer wrote, “It’s time to become ambitious builders again”. We should meet the possibilities this vision can bring us with enthusiasm and fortitude, and recall that while the challenges will be many and the road to successful completion long, Ontario has always met challenges with zeal and aplomb. 

Sean Speer: Cynicism seems sophisticated. But that doesn’t mean our politics needs more of it

Commentary

Earlier this year, Howard Anglin wrote an article for The Hub that warned against the conceit of contrarianism. His basic case was that although the contrarian instinct can be useful in the world of politics and public policy, it needs to be wielded with care. Excessive contrarianism or contrarianism as one’s default setting tends to lead in bad directions. Sometimes—in fact, most of the time—the consensus is probably right. Real contrarianism must be discerning enough to know when it is and when it’s not. 

An intellectual cousin of contrarianism is cynicism. Political commentary is marked by the cynical outlook—perhaps even more so than contrarianism. It’s the modus operandi of so many of today’s opinion leaders, commentators, and pundits. Twitter is their preferred stage for cynical takes and where they deliver their best (or worst) performances. 

A healthy dose of cynicism, like contrarianism, can be useful. The complete absence of cynicism is an empty idealism or even dangerous naivety that can cause one to misread the motives and outcomes of politics. A bit of cynicism is a good defence against succumbing to mere sentimentality. 

But cynicism similarly needs to be constrained. Excessive cynicism is boring and unproductive. The cynic is quick to identify problems but incapable or unwilling to commit him or herself to solutions. Their cynicism is a device to avoid ever making informed bets about ideas, candidates, or policies that may actually contribute to progress. It’s invariably a politics of stasis and a politics of snark. 

It’s not just that they let the perfect become the enemy of the good. It’s that they even refuse to see or accept the good because it might puncture their cynical narrative that politicians are dumb, lazy, or corrupt and the political system is therefore irrevocably flawed. 

Yuval Levin has referred to this outlook as “sophisticated cynicism.” The sophisticated cynic is highly effective on Twitter but ultimately ineffective at statecraft. They’ve chosen the easy yet unsatisfying path of detachment and critique over the imperfect yet rewarding process of trade-offs and incremental progress. 

Another problem with such sustained cynicism in political commentary is that it’s actually unrepresentative of most people. It reflects an intellectual poise that seeks to detach oneself from his or her fellow citizens and sees their principal role in highlighting the various flaws present in society. Roger Scruton put it this way: 

People who self-identify as intellectuals and thinkers also want to identify themselves as in some way outside of the community. Standing in judgment on it. Gifted with superior insight and intellect. And therefore inevitably critical of whatever it is that ordinary people do by way of surviving. So we have created an intellectual class which by its nature doesn’t identify with the way of life around it. And tries to gain another identity by its critical stance.

Such a stance is unlikely to find much resonance with the broader public. People can certainly be pessimistic as recent polls show. But they’re not cynical. They generally believe that their country and the people who inhabit it are good and decent and although their society is far from perfect—and in fact faces real challenges—it’s not rotten to its core. 

I was thinking about this recently in listening to an episode of Ezra Klein’s New York Times podcast with Tom Hanks. It’s a must-listen. 

Klein framed the conversation around the insightful (and persuasive) observation that Hanks’s tremendous success as an actor is due in some part to his rejection of the cynicism of his social milieu. His career has instead been imbued by a view of American society that’s based on the premise that people generally think well of the society, their fellow citizens, and their country. He’s instinctively understood that notwithstanding the common narrative of negativity and polarization, most people are positive, patriotic, and even sentimental. 

One way that I’ve come to think about the dichotomy between intellectuals and the rest of us that Klein and Hanks discussed is through the popular television show America’s Got Talent. The former would likely sneer at the overproduced sentimentality of the show which is full of stories that seem a bit contrived, pre-packaged, and intentionally sappy. But the latter—including me—just like nice stories. 

There’s a reason why it’s been among the most popular shows on television for several years. We prefer positive over negative. We like to believe in something or someone. We don’t mind sentimentality. We’re drawn to sincerity. We want to feel good. 

It’s the same reason why the Apple show Ted Lasso has resonated so much in recent years. It’s kind of a silly plot when one thinks about it. An American football coach getting hired to coach professional soccer in London as part of a revenge plot against an ex-spouse is far-fetched to say the least. The storyline is a bit cliched and the jokes can be hokey. But it’s highly successful precisely because it’s deliberately rejected sophisticated cynicism—it’s intentionally anti-cynical—and the audience has overwhelmingly responded. 

Same for Tom Hanks, who agreed with Klein’s interpretation of his personal outlook and how it has shaped his career. As he explained in their conversation: 

I think it’s because we have entered into a realm of cynicism that seems to be much more of a default position for an awful lot of cultural exchange…. 

But what I did not give in to was an ongoing type of cynicism that said, “It’s all corrupt, that it is all worthless,” because, even then, I was coming across people that were honest, and forgiving, and willing to sit down and discuss the differences. 

Hanks’ message here has real application for politicians and political commentators. There’s clearly a large yet untapped market for a politics of anti-cynicism. Ronald Reagan’s “Morning in America” is still a far more compelling political proposition with most people than Donald Trump’s “America carnage.” 

Here in Canada, Justin Trudeau found a Lasso-like politics in the 2015 election campaign. Ever since, however, he’s devolved into an increasingly cynical stance that’s much more about making the negative case for his opponents than the affirmative case for him and his government. He continues to win but only by turning himself into an uninspiring version of his former self. It’s an inherently unsustainable basis for political power. 

A key lesson here is that Canadian intellectuals shouldn’t segregate themselves too far from the people and society that they critique. A mix of sentimentality and sincerity is still a powerful political ideal. Tom Hanks may ultimately understand Canadian voters even more than our elected officials or political commentators themselves.