Canada Embraces Nuclear Energy Expansion

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Canada Embraces Nuclear Energy Expansion

It is counting on nuclear power to be part of its clean-energy mix, which will play a prominent role in sharply reducing carbon emissions. On a per-capita basis, Canada’s carbon emissions are in line with the U.S. and greater than in Russia, China and India. 

“We don’t see a path where we reach net-zero carbon emissions by 2050 without nuclear,” said Seamus O’Regan, Canada’s natural-resources minister. “It is proven, it is tested and it is safe. We are good at it.”

Canada ranks sixth among countries in terms of nuclear-power generation, according to the Washington, D.C.-based Nuclear Energy Institute. Electricity produced from 19 nuclear reactors accounts for 15% of the country’s energy supply. In Ontario, an economic engine that is bigger in area than the state of Texas, nuclear power is the top source of electricity, at 60%.

Late last year Canada’s federal government set out a policy road map to encourage the deployment of what are known as small modular reactors, or SMRs. They are a new class of reactors that are built in factories and come in a range of sizes. They can produce enough energy for a town as small as 5,000 in population or a city as big as 300,000.

‘We don’t see a path where we reach net-zero carbon emissions by 2050 without nuclear,’ says Seamus O’Regan, Canada’s natural-resources minister.

Photo: Blair Gable/Reuters

Unlike legacy reactors, which are built on site and big enough to power a city of a million or more, these smaller versions can be transported and dropped into locales where they are either hooked up to the electricity grid to serve a large region, or meet the needs of industrial areas or small towns. Proponents add that SMRs are more efficient in producing electricity compared with legacy reactors, and that their costs make them competitive with fossil fuels such as natural gas and coal.

Canadian officials regard small modular reactors as a way to provide electricity to remote, northern indigenous communities, some of which are fueled by diesel. Two western oil-rich provinces, Alberta and Saskatchewan, count on fossil fuels to generate the bulk of their electricity, and neither has nuclear reactors. Both provinces, though, have signaled to the Canadian government their interest in deploying small modular reactors as part of an economic strategy and an effort to shift to cleaner forms of power.

Terrestrial Energy Inc., a company based near Toronto, is developing a 300-megawatt reactor that uses molten salt as a coolant and fuel. The Canadian government awarded the company 20 million Canadian dollars, equivalent to about $16 million, in financing to help spur further research. Terrestrial is hoping to have its first small reactors ready for deployment by the end of this decade, assuming that regulatory hurdles are cleared.

The outlook in Canada for small modular reactors has political support, with the federal government and four of the 10 provinces on board with deploying the technology. “They believe these technologies are important to them, for their economy and environmental ambitions,” said Simon Irish, chief executive of Terrestrial Energy.

Some say that small modular reactors and other new designs look good on paper but haven’t met real-world tests yet. “These are PowerPoint reactors,” said Mycle Schneider, a Paris-based nuclear-energy consultant who is often critical of the industry. “These are not existing full-scale designs. It’s very far from being detailed engineering.”

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Even some supporters of nuclear power say small reactors using new designs are likely to cost more per megawatt than established designs that pack large capacity into a single plant.

“It’s a shame in my view because you’ve spent all this time, all these years” developing and testing the latest generation of big reactors, said George Borovas, head of the nuclear practice at the law firm Hunton Andrews Kurth. First-of-a-kind reactors typically suffer delays, and “it’s more expensive than you would think,” he said.

Terrestrial Energy is one of the three companies that Ontario Power Generation is working with in anticipation of adding small modular reactors at the Darlington Nuclear Generating Station, located 45 miles east of Toronto and currently capable of generating 3,500 megawatts, or enough to power two million homes. Ontario Power Generation, a utility owned by the provincial government, is in a separate joint venture with Seattle-based Ultra Safe Nuclear Corp., which is seeking a license to build and operate a 15-megawatt modular reactor in a town about 125 miles northwest of the capital, Ottawa.

Mr. Irish said the next step for Canada is for governments to make available more financing to help upstart companies in the small-reactor field. “This is important industrial technology for Canada, from a climate-change, jobs and economic perspective,” he said.

Canada’s natural-resources ministry acknowledged its financial role in documents making the case for nuclear power, especially next-generation, small reactors.

Governments at the national and regional level “have a role to play in sharing the risk and reducing the cost of capital,” the ministry said. “Without government support, the private sector may not make the necessary investments to set the stage for an SMR industry in Canada.”

Mr. O’Regan, the natural-resources minister, told reporters in December that additional money could be made available in the annual budget plan for 2021. “We cannot afford to take anything off the table,” he said. “I see the world in a very pragmatic way.”

Write to Paul Vieira at paul.vieira@wsj.com and Peter Landers at peter.landers@wsj.com

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