Decommissioning the Pickering Nuclear Generating Station: 2024 or 2054?
(6 pages of text)
In 2017, a strategic analyst with the Ontario Ministry of Energy, was asked to evaluate the potential for decommissioning the Ontario Power Generation's Pickering Nuclear Generating Station (Pickering) in Pickering, Ontario, at the scheduled end of the plant’s operations in 2024, instead of waiting until 2054. Decommissioning Pickering would require $5.264 billion in 2016 terms. Storing the spent fuel would cost another $4.3 billion, for a total of $9.564 billion. Ontario Power Generation had set aside $2.75 billion for decommissioning Pickering and for long-term storage of its spent fuel. To bridge the gap between what it had contributed and what was required, Ontario Power Generation was investing in a decommissioning fund and assuming that its investment would increase in real terms by 3.25 per cent a year. The strategic analyst had to examine what it would cost to decommission Pickering in 2024 versus what it would cost in 2054.
This case has been designed for use at both the undergraduate and graduate levels. It can be used in courses on operations research, public service management, and finance. After completion of this case, students will be able to
- analyze cost estimates;
- explain sensitivity analysis; and
- discuss the challenges in predicting costs.
Canada, Large, 2017
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