The Darlington Nuclear Generating Station (DNGS) is a 3524 MW(net), 4-unit CANDU station on the shore of Lake Ontario about 70 km east of Toronto, Ontario. Darlington is Ontario Power Generation's (OPG's) newest and largest nuclear station, providing about 20% of Ontario's electricity supply (the equivalent of about 2 million homes), or about CDN$1 billion per year worth of electricity at an arbitrary market price of $0.04/kWh.

Darlington was designed and built by Ontario Power Generation (then Ontario Hydro), and brought into service between 1990 and 1993 at a final cost of CDN$14.5 billion (1993 dollars). This represents almost twice the estimated final cost (capital + construction) of CDN$7.4 billion (1993 dollars) projected at the time that construction started in 1981 [1]. About 70% of this cost increase, and about 40% of the total cost, was due to interest charges alone. This arose through a stipulation of Ontario's Power Corporation Act (RSO 1990), and originating with Ontario's historic Power Commission Act (SO 1906), which precludes the paying down of capital debt through the utility's rate base, until the capital asset is in service.

The final cost of a large generating station like Darlington is thus sensitive to schedule delays. In the case of Darlington, eleven major delays (amounting to about five years of net lost time per unit) were experienced after the project's initial approval by the utility's Board of Directors in 1977 [2]. The single largest cost increase occurred in 1983, when Units 3 and 4 were deferred for two years due to low-growth in the electricity forecast. This relatively early delay in the project, along with changes in financial policy and worsening economic conditions, increased the final capital cost estimate by about CDN$4 billion, to CDN$11 billion. Reduced load growth accounted for the most significant delays to the Darlington project, but other contributors included labour actions, staff shortages, and two unforeseen technical issues requiring the replacement of generator rotors and pump impellers.

In the end about 70% of Darlington's final cost increase was due to schedule delays and financial policy changes. The remainder of the increase is attributable to changes in scope, including that imposed by an evolving regulatory environment over the course of the project.

The experience of Darlington underscores the importance of schedule (both optimization of, and adherence to) in the construction of large generating plants, and, in particular, the ramifications of imposing schedule delays based upon government policy or load forecasts once a major capital project is under construction. At the same time, however, it is also important to compare the capital cost of Darlington with its low operational cost, and ultimately its worth to both the Ontario and Canadian economy (also indicated in the first paragraph above), and the environment.

More recent experience by Atomic Energy of Canada Ltd. (AECL) with CANDU 6 new-build projects indicates that adherence to budget and schedule is routinely achievable. In the near future, the CANDU-ACR is projected to further minimize costs through a 40% reduction in capital costs and a streamlined construction process.

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[1] "Darlington Cost Increases", Nuclear Canada Yearbook 1992, Canadian Nuclear Association, 1992.

[2] J. McCredie, "Domestic Project Management", Canadian Engineering Centennial Conference, published by the Canadian Nuclear Society, May 1987.

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See also...

"Can CANDU estimates be trusted?" by J.A.L. Robertson (2004).

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It is a common perception that early nuclear power proponents boasted of electricity from nuclear reactors becoming "too cheap to meter" in the near future. In fact, while nuclear reactors have become one of the cheapest large-scale options for base-load electricity (see related FAQ), it was never the expectation of earlier nuclear engineers that costs would come down low enough to render metering irrelevant.

In fact, the oft-quoted prediction, "too cheap to meter", was made in 1954 by an American bureaucrat, Lewis Strauss, in a speech that very much reflects the public's post-war euphoria over nuclear technology (and technology in general), galvanized by President Eisenhower's vaunted "Atoms for Peace" program launched in December 1953. Strauss' comments predated the first nuclear power plants by three years, and included other optimistic references to wiping out world hunger and extending human life expectancy.

A brief retrospective look at official Canadian predictions (published by the Canadian Nuclear Society) reveals a much more conservative outlook, and puts to rest the notion that the nuclear industry itself supported the "too cheap to meter" portrayal.