Quebec opts to renovate lone nuclear power plant at cost of $2 billion

The province's energy utility announced on Tuesday that Gentilly-2, Quebec's only nuclear power plant, will get a major retrofit aimed at increasing its lifespan to 2040.

"It's a good project that will allow us to continue to operate for many more years a plant that is safe . . . a plant that will produce electricity at a competitive price," Hydro-Quebec president Thierry Vandal told a news conference in Becancour, Que.

Located on the shores of the St-Lawrence River, about halfway between Montreal and Quebec City, Gentilly-2 only produces three per cent of the province's energy output.

Most of province's electricity needs are met by hydroelectric power production. Hydro-Quebec claims the nuclear plant plays an important stabilizing role for the province's power grid.

However with nearby Trois-Rivieres hit hard by slowdowns in the manufacturing and forestry sector, economic benefits were also a deciding factor.

The renovations will result in about $600 million in spinoffs for Quebec and will create about 800 jobs over a 20-month period, in addition to the station's current staff.

Engineering and procurement are slated to begin this year, with construction to start in 2011 and wrap by 2013.

"It's a good business decision for the regional economy as well as for the rest of Quebec," said provincial Transportation Minister Julie Boulet, who also represents the central Quebec region.

The $1.9 billion price tag cited Tuesday is $400 million higher than estimates made earlier this year. Original estimates had been as low as $800 million.

The Point Lepreau nuclear power plant in New Brunswick - considered Gentilly-2's twin as both use CANDU-6 reactors - is currently being refurbished at a cost of $1.4 billion to add another 25 years of operating life.

Dismantling Gentilly-2 was pegged at $1.6 billion.

Vandal stressed the utility is working to ensure there will be no cost overruns, including fixing prices with some suppliers.

"Our estimate derives from eight years of feasibility studies, evaluation, preparatory work and inspections," he said.

But environmental groups question whether Hydro-Quebec has been seduced by the so-called "nuclear renaissance" and its characterization of nuclear energy as safe and green.

"Generally in the nuclear world, a lot of it doesn't have to do with economics and more to with the prestige of having a nuclear facility," said Greenpeace energy campaigner Shawn-Patrick Stensil.

"Frankly, $2 billion for 600 megawatts is quite a lot."

Stensil acknowledged that while nuclear plants don't produce carbon emissions, there is little consensus about what to do with the nuclear and other types of waste they produce.

Public hearings held in 2004-2005 on the future of Gentilly-2 concluded that the Quebec government should articulate a long-term plan for dealing with radioactive waste before extending the plant's lifespan.

"(The government) has had a policy that won't accept a used-fuel waste site in Quebec," said Stensil.

"Today, however, they have given the OK to producing more radioactive waste. That's hypocritical."

Others wondered if renovating the 25-year-old plant was possible without putting workers at risk. Hydro-Quebec's plans essentially call for the reactor's key parts to be rebuilt.

"It usually takes 40 years for the radiation to subside enough to get near it," said Marcel Jette, a former Gentilly-2 worker who heads a group of employees making health claims against Hydro-Quebec.

"They're going to stop the reactor and send the workers in right after. They say there is no danger, but that's completely false."

Between 2002 and 2005, the Canadian Nuclear Safety Commission repeatedly found radiation protection at Gentilly-2 to be "below requirements."

Security guards blocked Jette, who believes he contracted cancer from his years at the plant, from entering Tuesday's news conference.

The nuclear refurbishment in Quebec comes at a time of growth for Canada's nuclear industry as governments expand their power grids with nuclear energy, avoiding polluting coal-fired plants.

In Ontario, the province is expanding its nuclear network, already the most extensive in Canada, with new reactors to be built at the Darlington nuclear generating station east of Toronto by 2018.

The province has asked three companies - Atomic Energy of Canada Ltd., Areva NP of France, and Westinghouse, a U.S.-Japanese joint venture - to submit bids to build the reactors by the end of the year.

In Alberta, the Bruce Power partnership, which already operates a nuclear plant in southwestern Ontario, is proposing to build a nuclear generating station in the Peace River region.

If the project is approved, it would be the first nuclear power station in Western Canada, a region of the country where hydroelectric, coal-fired and gas-fired stations produce most of the electricity.

Bruce Power is a partnership owned by TransCanada Corp. (TSX:TRP), uranium miner Cameco Corp. (TSX:CCO) and a unit of the Ontario Municipal Employees Retirement System, one of Canada's largest pension funds.