We knew new nukes were absurdly expensive (see “Areva has acknowledged that the cost of a new reactor today would be as much as 6 billion euros, or $8 billion, double the price offered to the Finns.”).  Now we know they are literally unaffordable.

Our friend and fellow blogger, Tyler Hamilton – who actually has a real job as senior energy reporter for the Toronto Star – published this stunning news in Canada’s largest daily newspaper:

The Ontario government put its nuclear power plans on hold last month because the bid from Atomic Energy of Canada Ltd., the only “compliant” one received, was more than three times higher than what the province expected to pay, the Star has learned.

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Sources close to the bidding, one involved directly in one of the bids, said that adding two next-generation Candu reactors at Darlington generating station would have cost around $26 billion.

It means a single project would have wiped out the province’s nuclear-power expansion budget for the next 20 years, leaving no money for at least two more multibillion-dollar refurbishment projects.

“It’s shockingly high,” said Wesley Stevens, an energy analyst at Navigant Consulting in Toronto.

So nuclear bombshells have now been dropped on Canada, Finland, Turkey (see “Turkey’s only bidder for first nuclear plant offers a price of 21 cents per kilowatt-hour“) and this country (see “What do you get when you buy a nuke? You get a lot of delays and rate increases….“).

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Now you may be saying, wait a minute, Joe, hasn’t Areva said it would deliver a single plant for $8 billion, so that should work out to a Walmart-style $16 billion price, rather than AECL’s Tiffany-style offer.  Hamilton has more juicy details:

AECL’s $26 billion bid was based on the construction of two 1,200-megawatt Advanced Candu Reactors, working out to $10,800 per kilowatt of power capacity.

By comparison, in 2007 the Ontario Power Authority had assumed for planning purposes a price of $2,900 per kilowatt, which works out to about $7 billion for the Darlington expansion. During Ontario Energy Board hearings last summer, the power authority indicated that anything higher than $3,600 per kilowatt would be uneconomical compared to alternatives, primarily natural gas.

Much of the dramatic price increase relates to the cost of labour and materials, which have skyrocketed over the past few years. Nuclear suppliers and their investors also have less tolerance for risk.

The bid from France’s Areva NP also blew past expectations, sources said. Areva’s bid came in at $23.6 billion, with two 1,600-megawatt reactors costing $7.8 billion and the rest of the plant costing $15.8 billion. It works out to $7,375 per kilowatt, and was based on a similar cost estimate Areva had submitted for a plant proposed in Maryland….

Stevens said Areva’s lower price makes sense because the French company wasn’t prepared to take on as much risk as the government had hoped. This made Areva’s bid non-compliant in the end. Crown-owned AECL, however, complied with Ontario’s risk-sharing requirement but was instructed by the federal government to price this risk into its bid. “Which is why it came out so high,” said Stevens.

Hamilton explains on his blog, Areva “was deemed non-compliant, however, likely because Areva wouldn’t guarantee the price.”

Yes, you can buy a terrific low-cost $8* billion nuke from Areva [* the fine print says that if the cost escalates, you swallow the risk, not Areva — a painful lesson Areva learned in Finland (see “Nuclear meltdown in Finland“)].

Hamilton adds:

I’ve yet to get any reply from the government or industry that denies or confirms these numbers. Premier Dalton McGuinty was scrummed by reporters earlier this morning and he didn’t refute the numbers, saying only that the process is confidential. McGuinty could have said something general like “The numbers are far off” or “Not even close” to dispute the article, but he didn’t.

So, until a major nuclear power provider is willing to sign a contract with a lower guaranteed price, we should assume that the true all in cost for a new nuclear plant is more than $10,000/kw – which may be a staggering sum to most, but shouldn’t be surprised to CP readers: