OPG posts sharp increase in net profits from 2008-2009

tower sunset OPG posts sharp increase in net profits from 2008 2009Earlier this week Ontario Power Generation (OPG) released their 2009 financial results and the news is good.  Net income for the year was $623 million compared to net income of $88 million for the year ended December 31, 2008.  Well this is some good news.  Tom Mitchell, President and CEO of OPG, attributes this to an increase in earnings from the segregated investment funds due to improved global financial markets.  These investments were established to provide for future costs of nuclear fixed asset removal and nuclear waste management liabilities.  OPG also saved money from a decreased demand for electricity.  Total electricity generated during 2009 of 92.5 TWh decreased from 2008 production of 107.8 TWh.  The decrease of 15.3 TWh was primarily due to lower generation from OPG’s thermal and nuclear generating stations.  The decrease in production from the thermal generating stations of 13.7 TWh was primarily due to the impact of lower primary demand in Ontario, and higher electricity generation from other Ontario generators.

picture 1 OPG posts sharp increase in net profits from 2008 2009
So what should the OPG do with the access cash?  Well here some of their visions, and core business strategies heading into the future.

Nuclear

Plans are in place to perform major scheduled maintenance over the next three  years, including a VBO at the Pickering stations in addition to ongoing maintenance work,including steam generator inspections and maintenance, feeder inspections and replacements, turbine\maintenance and fuel channel inspections.

The reduction in outage duration targeted at the nuclear stations reflects ongoing and new programs aimed at improving the planning, execution, monitoring and reporting of outage work, as well as, reducing outage costs and increasing generation.

Hydro-Electric picture 21 OPG posts sharp increase in net profits from 2008 2009

OPG plans to increase the capacity of existing stations by 50 MW over the next five years by replacing existing turbine runners and installing more efficient equipment.  The replacement of control equipment will also improve efficiency and accommodate market dispatch requirements.

Thermal Generation

The thermal business segment will cease coal-fuelled operations by 2014 and is exploring options and the feasibility to move to lower CO2 emission fuels such as biomass, natural gas and gas-biomass dual-fuel.

With the closure of all coal generation plants by 2014 OPG and the government of Ontario should be investing millions of dollars to find a feasible way to make bio-fuel a ramp-up electricity source. We should be progressively investigating a way to create the actual infrastructure in Ontario to be able to support a coal to bio-mass conversion.  The less natural -gas build up the better, in the long run, for reliability, cost competitiveness ,and the environment.  OPG should be using some of this surplus to invest in pellitization plants, financial incentives to farmers and forestry to provide the base fuel, and the formation of a transportation industry for the specific purpose of moving this bio-mass fuel.


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14 Responses to “OPG posts sharp increase in net profits from 2008-2009”

  1. greengrift says:

    Increased profits? That’s convenient. The govt must be getting ready to monetize it.

  2. Ryan says:

    Yikes! A whole $535 million difference? That is one giant leap. As long as some of the saved cash is being put into nuclear maintenance and inspections we can all relax.

  3. alliecatz says:

    uhm…did you read the part that says the increase in net income came from the improved performance of the investment markets… so that their Nuclear Funds (money set aside to decommission and deal with rad waste)? it means that “profit” isn’t actually available for spending. it’s not “surplus”.

    oh yeah… and if you check with the mandate for OPG, spending money on building pelletization plants or providing monetary incentives to farmers is not allowed. their job is to generate power – not build an entire supply chain.

  4. alliecatz says:

    crap… didn’t finish that sentence in the middle of my comment.

    … so that their Nuclear Funds actually earned money ($52M in 2009) instead of lost money ($670M in 2008)? revenue from actual electricity generation was down.

  5. cookiemonster says:

    That chart you have for OPG’s generation by fuel type is incorrect. In 2007 they were directed by the Ontario government to sell all their interests in wind farms so as to encourage a more competitve market place.

    The breakdown of their generation by fuel type is available on their website: http://www.opg.com/employees/ambassador/opg101.asp

    • skyler hype says:

      I took the generation numbers from the IESO website and those where the generating figures for Thursday, march 11/2010. Thanks for the clarification and link.

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