A Western Nuclear Strategy

An Alberta Nuclear Strategy

 

Background information

Saskatchewan and Alberta are western Canadian prairie provinces both of which are currently run by conservative political parties; both have economies largely dependent on agriculture and hydrocarbons; and, both governments claim responsibility for the management of electrical power generation and distribution in their jurisdictions. Saskatchewan has about 1.35 million people; Alberta just over 4 million.

The Liberal and New Democratic parties are respectively the careerist and idealogue wings of Canada's progressives and both federal parties have long relied on taxing western Canadian resources to advance social programs in vote rich central Canada. The current federal government is progressive, has embraced green ideology as a weapon against populists in prairie provinces, and has been trying to use federal green legislation along with its control of the media; the courts; and the regulatory process to shut down the production, use, and export of hydrocarbons in Alberta and Saskatchewan.

Saskatchewan and Alberta have the highest electrical power rates in Canada at about $0.20 and $0.25 per KWH respectively. In contrast, locally produced nuclear power sold without pricing in sunk costs on permitting and renewables would come in at around $0.055 per KWH; or, for around 80 terawatts in annual use just in Alberta, something over $14 billion a year less than we pay now.

What I believe happened in Alberta is that our relative prosperity as Canada's largest oil and gas producer allowed consumer power costs to slip under the political radar with political intervention largely limited to sporadic efforts at making market mechanisms work across an industry fighting to retain its rate base oriented regulatory framework (in which the regulatory authority sets consumer pricing to guarantee a fixed rate of return on capital assets (the rate base) held by the regulated industry). As a result the industry has been able to increase its net returns by reducing its maintenance and modernization efforts on hydrocarbon based generation (thus increasing the investment per KWH produced) while building out a vast network of high cost transmission lines, wind farms, solar panels, batteries, and standby gas generation.

In part because Saskatchewan has one of the world's largest and longest producing high grade uranium ore deposits its response to federal policy has been to enunciate a long term policy direction under which the governing party appears to acknowledge that the success of green advocacy against hydrocarbons is inevitable, but plans to replace hydrocarbons in power generation with nuclear reactors instead of renewables - and it looks as if Alberta will soon recognize that appealing to federally appointed courts for relief from federal policy is pointless and so commit further to working with Saskatchewan in developing nuclear.

Note that while Saskatchewan has both uranium and processing expertise where Alberta has world class engineering companies and capital, neither provincial economy is large enough or centralized enough to support the use of large scale reactors like those offered by Rosatom. As a result the natural direction for the two acting together is toward development of a western Canadian export industry producing, shipping, and maintaining relatively small (<400MW) modular, fission based, power plants for use elsewhere and not merely toward the implementation of a few power plants here.

Since all of this is relatively new the progressive opposition to the provincial policies involved has yet to fully materialize but will have the full throated support of the media, the federal government, dozens of NGOs with access to virtually unlimited funding, local progressives, and a majority of Canadians in high density jurisdictions like Montreal and Toronto when it does get going. How that opposition will manifest is, of course, unknown, but their past successes against nuclear have largely come from misrepresenting what happened in a few high profile incidents, shouting down factual arguments, and recasting the public discussion as a personality contest between good guys and bad guys.

This strategy generally defeats conservatives and will certainly weaken public support for nuclear here; but most of the people in the two provinces are suspicious of the federal government, not excessively credulous with respect to the media, and have jobs in, or sufficiently close to, primary production to understand the importance of hydrocarbons for export and use. The contest may therefore be more likely to end in a draw here than in any other area in Canada or the United States - and a draw against all out progressive opposition is a win for nuclear.

The political strategy currently adopted in both provinces is the traditional conservative one: argue on the facts while showing sticks, carrots, and common enemies - thus the governing parties in the two provinces are:

 

1. emphasizing the reality that relying on renewables will lead to ever increasing energy costs with rolling blackouts, and so ultimately to catastrophic reductions in the quality of life here;

    

2. pointing people at the Liberal/NDP coalition and the federal government as the enemy;

    

3. directing public attention to provincial efforts to protect the public from predatory federal taxation; and,

    

4. trying to avoid offending against the public's general acceptance of the climate bogeyman and green solutions by focusing public discussion on the replacement of coal fired generation while loudly saluting the desirability of emissions reductions through the electrification of all things.

This strategy may, or may not, succeed politically; but embeds a lie by omission that's almost guaranteed to lead to implementation failure. The problem is that the vision being sold to the public in which cheap and clean nuclear generation replaces existing coal fired plants while the rest of the system continues to evolve toward renewables, is nonsensical. In reality it takes significant standby power to make renewables work at all; and because nuclear is a 24 x 7 solution that works best when run at 97% or more of nameplate capacity any successful initial implementation will inevitably lead to replacement of the entire renewables chain.

The conservative strategy, in other words, ignores reality in that every dollar now wasted on renewables is somebody's revenue dollar; the amounts involved are huge; and, every one of those dollars has several claimants: all well dug in, and all accustomed to having their hands out looking for an extra nickel here or dime there - and because those people are deeply embedded in the decision making process; have both personal and organizational incentives to keep those revenues flowing; and, have extensive media and political support for opposing nuclear, the implementation strategy adopted by the governing parties in both provinces practically guarantees deep opposition from people in a position to ensure embarrassing and expensive failures simply by working to rule on nuclear development while prioritizing anything they see as helpful to the green advocates and federal agencies intent on stopping it.

What's needed to bring system insiders onside along with the public is an all out strategy that does three things:

 

1. moves quickly enough to overwhelm the progressive effort to mobilize public opinion against nuclear;

    

2. provides major incentives for power system insiders to support nuclearization; and,

    

3. gets the foundations for a new industry as well as a radical transformation in power generation and distribution in place before the next provincial elections.

Perhaps something like this:

 

• Politics

1. focus political advocacy on the economy: on the importance of cheap and reliable power; on jobs in turbine and reactor manufacturing and support; and on the stabilizing influence of high tech export industries in a balanced economy;

    

2. focus legislative action on clearing the decks: creating expedited approval processes for new nuclear generation and a legal framework to protect the nuclear industry in the two provinces from arbitrary legal or political action; and,

    

3. directly support law-fare and political action by non governmental entities against existing and planned nuclear generation in central Canada.

   (The reason for this is that the courts will inevitably rule in favor of progressives on environmental or rule based actions against nuclear development in the west - but central Canada is largely dependent on nuclear power now and forcing the courts to find reasons to dismiss charges brought there, will establish precedents allowing the federal conservative party to threaten them with having to defend taking the opposite positions here.)

 

• Cultural foundations

 

1. fund centers of theoretical and engineering excellence in fission/steam power generation in at least one major university and one technical institute in each province;

   The university centers would co-ordinate work across the entire institution: funding, for example, industry specific programs in physics, mathematics, and civil law along with one or more private sector partnerships with engineering faculties to develop and test technologies aimed at one or more of the major elements making up the power chain.

   The technical institutes would implement programs leading to certification in implementation and support roles - from transportation security to reactor operation and turbine maintenance.

    

2. provide loan guarantees for at least three competing design and engineering teams to put working, fission based, power plants into co-locates on existing industrial sites (two in Alberta, one in Saskatchewan) where plant and office space is available; yard facilities with unused space and high voltage line access are in place; the site operator both contracts for the waste heat and certifies the design; and, the primary contractor is based in Alberta or Saskatchewan;

   In the short term this means looking at sites like an oilsands plant, refinery row in Fort Saskatchewan, or larger food processing plants where hydrocarbons are now used to provide process heat. In the longer term, however, the incentives favor co-development of power production and facilities using the waste heat - for example carbon fiber production from oil sands bitumen requires significantly more heat than electrical energy; and,

    

3. separately fund all public degree granting institutions in each province to provide a full semester required course to be developed and taught by people with engineering or hard science qualifications to all students introducing basic ideas from the philosophy of science and their application to civil engineering and decision making.

• Financial equalization

 

1. create an independent authority supervised by a board made up from elected members of the two legislatures whose role it is to protect stakeholders in the power generation and distribution system as it exists today while selling off wind, solar, battery, and transmission assets made redundant by the implementation of customer-adjacent nuclear power.

   Divestment is a major component of the strategy because maintaining investors and job holders whole throughout the process reduces both their willingness and their ability to actively support program opponents. It is made possible by three factors:

   • almost all of the physical assets (transmission towers, cables, turbines, blades, panels, inverters; etc) are in both short supply and high demand - meaning that these are far more valuable on a truck than in the field;

      

   • every watt of wind or solar now produced in either province has a matching watt in available, usually gas fired, standby power. This means we can cut the renewables out of the loop to reduce net costs per generated KWH while selling off the renewables infrastructure well before nuclear becomes available simply by recognizing that the standby plants are the actual primary producers; and,

      

   • total cash flows to existing stakeholders can be kept relatively constant despite the elimination of the major cost sinks associated with renewables by initially incorporating nuclear power plants into the system wide rate base; reducing the payout period for nuclear generation; and then gradually increasing total power sales while cutting consumer pricing per KWH.

    

2. empower a board made up of elected MLAs from the two provinces whose role will be to create an Alberta Power crown corporation akin to Saskatchewan's Sask Power; bring all power generation and delivery under the control of the two entities; and then create and manage a process to remove rate base incentives and as much of the regulatory framework as may be possible from the operations of both, while maintaining political control and accountability for both pricing and performance.

What makes this strategy better than the present one is that it directly takes on the key issues; offers the opportunity to bring both the public and those charged with making nuclear work on side from the beginning; and can start to show results before the next provincial elections in either province. Furthermore, it is a relatively easy sell because:

 

1. post secondary education in both provinces is desperate for both money and legitimacy - and this strategy helps them on both counts;

    

2. the people who made money putting in transmission lines, turbines, and panels will make money taking them out while the MLA panel entrusted with holding investors and other stakeholders whole will reduce the incentives other insiders feel to sabotage the nuclear effort;

    

3. the people and businesses now committed to some form of co-generation will see a positive long term effect arising largely from improved price predictability and reductions in the risk posed by the left's long term enthusiasm for time based power pricing (because that reduces the price co-generation sites get for power sold to the wire service provider (power company) while raising the cost of the power they buy.)

    

4. the investment in stand-by gas plants now in place is protected throughout the process, with expedited payout up-front and a guaranteed medium term role;

    

5. giving current stakeholders privileged opportunities to invest time, positions, and money in nuclear gives them positive incentives to support the change;

    

6. telling power consumers what's going on and why lets both governments promise cleaner, lower cost, and higher reliability, power while forcing progressives to support dirtier, higher cost, and less reliable power; and,

    

7. the communications component opens a path away from the dark side for those few within the environmental movement who really are concerned about the environment to effectively oppose political and financial control of their movement by progressives and so weaken the latter's ability to use these organizations against nuclear development.

 

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