Bruce Power all set to invest in plant upgrades

Bruce Power and the Independent Electricity System Operator have entered into an amended, long-term agreement to secure 6300 MWe from the Bruce Power site, through a multi-year investment program. In a statement today, Ontario-based Bruce Power said the amended agreement - which will take economic effect on 1 January - will allow it to immediately invest in life-extension activities for units 3-8 to support a long-term refurbishment program that will commence on unit 6 in 2020.

Bruce Power and the Independent Electricity System Operator (IESO) have entered into an amended, long-term agreement to secure 6300 MWe from the Bruce Power site, through a multi-year investment program. In a statement today, Ontario-based Bruce Power said the amended agreement - which will take economic effect on 1 January - will allow it to immediately invest in life-extension activities for units 3-8 to support a long-term refurbishment program that will commence on unit 6 in 2020.

The Bruce B plant, with Bruce A in background (Image: Bruce Power)

The company entered into the Bruce Power Refurbishment Implementation Agreement (BPRIA) in 2005, to enable the restart of Bruce units 1 and 2, to return the site to its full operating capacity of eight CANDU units. This has allowed Ontario to phase out coal-fired power generation. The company said it is Ontario's lowest cost source of nuclear, currently generating over 30% of the province's electricity at 30% below the average residential cost of power. Extending the operational life of the Bruce Power units will ensure Ontario families and businesses have long-term price stability, it added.

Duncan Hawthorne, Bruce Power's president and CEO said: "In the short term, this amended agreement will allow us to establish the building blocks to be successful with our long-term program by investing to extend the operational life of the units prior to refurbishment, while also preparing for the first refurbishment, which will commence in 2020."

On 1 January Bruce Power will receive a single price for all output from the site of $65.73 per megawatt-hour (MWh). This compares to the current price paid to Bruce Power of $64.90 MWh against an average price of residential electricity in the province to date in 2015 of $98.90 MWh to the end of the third quarter - January 2015-September 2015.

It is estimated the six refurbishments in the agreement will cost about $8 billion, in addition to $5 billion in a range of other life-extension activities from 2016-53. In the short-term, between 2016 and 2020, the company will be investing about $2.3 billion as part of this plan.

The refurbishment of each unit will add about 30-35 years of operational life, while other life-extension investments will add a combined 30 reactor years of operational life to the units, pre-refurbishment. Bruce Power said this approach "provides additional benefit in terms of sequencing refurbishments and optimizing asset life".

"Bruce Power will bear the risk of delivering these projects on time and budget with upside sharing for better than planned performance with the IESO. The price of these refurbishments will be finalized prior to each project through a defined, transparent process in the agreement," it said.

"All of the future plant investment activities outlined in this agreement have been previously completed by Bruce Power over the last 14 years, and the company will build on these lessons learned moving forward. The price of electricity will be adjusted as funds are incrementally spent as part of the investment program," it added.

Bruce Power will continue to provide about one-third of its output, or 2400 MWe as flexible generation, allowing the province to balance system needs permanently "in a post-coal environment".

In Canada, nuclear facilities are regulated by the federal government through the Canadian Nuclear Safety Commission and Bruce Power, as a licensee, will be responsible for meeting all regulatory requirements and gaining the necessary approvals to implement the investment program. The refurbishment timetable is consistent with Bruce Power's current site licence that runs to 2020, which assumes there will be no refurbishment within this period.

The Bruce Power Refurbishment Implementation Agreement has been available to the public since it was first signed in 2005 and the company and the province continue to support this open and transparent approach.

Bruce Power currently has two different partnership structures - Bruce A LP (Bruce A) and Bruce Power LP (Bruce B). As a result of this transaction, the company said it will move to a single partnership structure through Bruce Power LP.

Formed in 2001, Bruce Power is an all-Canadian partnership among Borealis Infrastructure Management - part of the Ontario Municipal Employees Retirement System (OMERS), TransCanada Corporation, the Power Workers' Union and the Society of Energy Professionals. A majority of Bruce Power's employees are also owners in the business.

In today's statement, Bruce Power noted that TransCanada had announced today it intends to exercise its option to acquire an additional interest in Bruce Power for $236 million from OMERS. TransCanada and OMERS will each hold a 48.5% interest in Bruce Power, with the remainder held by the Power Workers' Union, The Society of Energy Professionals and a Bruce Power Employee Trust.

Researched and written
by World Nuclear News