The task force is recommending that the federal government level the playing field in the energy R&D sector with a commitment in its 1995 budget -- due to appear later this month -- to energy efficiency and renewables. The government should also take action to ensure that federal energy R&D and demonstration spending does not continue to favour other energy options. The federal wind energy R&D budget for 1993-1994, for example, was a modest CAN $650,000, compared with $157 million in 1993-94 for Atomic Energy of Canada Ltd.
The government tax system should also ensure equitable treatment of energy efficiency, renewable energy and non-renewable energy. The task force also suggested that the government announce its intent to negotiate with generators nationally to supply 15-20% of Canada's electricity with "green power," to be phased in by 2010.
The 32 member task force, which comprises a wide range of business and industry leaders, academics, environmentalists and government officials, was established by the ministers of environment and finance in July 1994 to look at "economic instruments and disincentives to sound environmental practices." Its report was presented to parliament in early December by environment minister Sheila Copps. She said that "the federal government is committed to ensuring that environmental concerns are fully integrated into the economic policy of our country."
The recommendations on renewables and energy efficiency were among several advanced for the energy sector, which emerged as the priority area for analysis and review by the task force. All of these measures are now being considered in the lead-up to the budget. It is the first instance of a public body being asked to provide formal, structured input to the federal budget process.
Controversy erupted over the recommendation concerning nuclear R&D spending. In the view of many environmentalists, nuclear is a non-sustainable energy option with major economic, environmental, and health and safety risks. The task force suggested that the $157 million federal R&D outlay in 1993-94 for Atomic Energy of Canada Ltd (AECL) be cut by over 50% in the 1995 budget. A troubled AECL president and CEO, Reid Morden, responded that this recommendation, if implemented in its entirety, would jeopardise the future of Canada's nuclear industry.
The recommendation stated that the $88 million in federal funding channelled through AECL to the CANDU Owner's Group (COG) should be eliminated, that the 1990 COG agreement be terminated, and that the federal government should "commit to review federal financial support for the nuclear industry." COG was formed in 1984 as a strategic alliance for co-operative R&D and information exchange in projects and services of AECL and the three Canadian utilities which operate CANDU heavy water nuclear reactors: Ontario Hydro, NB Power and Hydro Quebec. The group's 1993-1994 R&D budget totalled some $178 million, of which 45.5% was provided by AECL from federal money, and 50% by Ontario Hydro. In 1990, the government committed to funding nuclear R&D for seven years in conjunction with agreements between COG and AECL.
Most of the measures recommended by the task force were adopted by consensus. However, since several task force members took different views on the federal role within the nuclear industry, the nuclear R&D recommendation was one of those published for consideration as a "measure without consensus."
Proponents of the recommendation argued from Statistics Canada data that "nuclear power receives about twice as much each year in federal R&D subsidies as [for] all other energy options combined -- including coal, oil, natural gas, conservation and renewables, while only contributing 4% of Canada's total energy use, less than provided by wood fuel." Continued subsidisation was said to prove the non-sustainability of the nuclear industry and to undermine the federal Liberal government's pre-election commitment to job creation and energy efficiency.
"The subsidy to R&D is one small part of the total subsidy to this industry, if one includes the costs of: loan write-offs; the Nuclear Liability Act (which sets a low ceiling on compensation for victims of a nuclear accident); heavy water production; waste storage; and decommissioning." Reducing federal subsidies for nuclear would be consistent with the "user pay principle," under which the nuclear utilities would assume the federal share of the R&D funding, essentially shifting that component from federal taxpayers to electricity consumers in the relevant provinces. "The higher price of electricity would provide an incentive for consumers to switch to alternative sources of energy and to conserve."
Proponents of the recommendation also claimed that energy efficiency is a much cheaper and faster way of reducing greenhouse gas emissions than the nuclear option, typically displacing about seven times as much in the way of greenhouse gas emissions per dollar invested than does nuclear power.
Industry observers note that despite Canada's affluent nuclear energy R&D expenditures, the Candu reactor has faced many ongoing design, technical and safety problems. At Ontario Hydro, these include unexpected corrosion of fuel channels due to obscure hydriding effects that required the multi-billion dollar re-tubing of Pickering reactors; major fuel channel failures; and steam generator corrosion that led Hydro to schedule the shut down and lay up of the Bruce 2 reactor later this year. Moreover, a fuel shift effect was identified that could lead to a runaway reactor explosion, and required Hydro to down rate four of its Bruce reactors to 60% of full power in early 1993.
In December, Hydro's Pickering number two unit experienced a loss of coolant accident due to a pressure relief valve failure which activated the emergency core injection (ECI) system, the last line of defence against a reactor explosion or meltdown. This was the first time the ECI was used in Ontario Hydro's 23 year history of CANDU operations. The accident resembled the one at Three Mile Island in 1979, which in fact led to the retrofitting of Pickering with an ECI system. It suggests that unknown nuclear design faults exist, or that safety margins are decreasing.
These difficulties appear to have spurred Hydro's planning for the future installation of significant amounts of renewable energy technologies (Windpower Monthly, January 1995).