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Ottawa appeals to nuclear industry in clean-energy push

The Darlington Nuclear Generating Station in Clarington, Ont. is photographed during a tour on Feb. 11, 2016. The federal government is touting nuclear energy as an important part of Canada’s clean-energy mix as Ontario embarks on a $26-billion, 20-year project to rebuild its aging reactor fleet.

Fred Lum/The Globe and Mail

The federal government is touting nuclear energy as an important part of Canada's clean-energy mix as Ontario embarks on a $26-billion, 20-year project to rebuild its aging reactor fleet.

In a speech Thursday, Natural Resources Minister Jim Carr told industry representatives that they face a "tremendous opportunity" as federal and provincial governments move to reduce greenhouse-gas emissions by adopting carbon pricing and shutting down coal-fired power plants.

"Nuclear energy has to be part of this equation because it already accounts for about 16 per cent of Canada's electricity supply," he told the Canadian Nuclear Association meeting, "and there is simply no reason why nuclear energy can't claim a larger share of our electricity mix."

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The nuclear industry has received short shrift in the federal-provincial discussion of Canada's planned transition to a low-carbon future, even though that plan entails an increase in the use of electricity for transportation and home heating. The "pan-Canadian framework for clean growth and climate change" – which was signed in December – highlights advances in solar and wind energy, but is silent on nuclear.

Still, Mr. Carr described the industry as a "strategic asset" for the country despite its troubled past. That includes a series of project cost overruns that led the previous Conservative government to privatize the commercial division of Atomic Energy of Canada Ltd. (AECL), vendor of the Candu reactor. It is now owned by SNC-Lavalin Group Inc.

"This is your chance to bring the provinces and territories on board by demonstrating how nuclear energy can help Canada to meet its climate-change goals," he told the nuclear industry crowd in the room.

The industry is hoping to market a new generation of smaller, modular reactors (SMR) across the country, but that technology is not commercially available. Canadian Nuclear Laboratories – the federally owned, privately managed facility at Chalk River, Ont., – announced Thursday it will look for partners with SMR designs to build a prototype in order to assess its commercial viability.

At this point, the nuclear industry is battling to maintain its current market share. Ontario is the only province that relies heavily on nuclear power; provincially owned Ontario Power Generation (OPG) and investor-owned Bruce Power supplied 60 per cent of Ontario's electricity last year. (New Brunswick has one nuclear plant at Point Lepreau.)

OPG has launched a $12.8-billion project to rebuild all eight units at its Darlington, Ont. generating station over the next 10 years, which its chief executive officer Jeff Lyash billed as "Canada's largest infrastructure project."

Meanwhile, Bruce Power – which is owned by a consortium led by TransCanada Corp. – entered into an agreement with the Independent Electricity System Operator in Ontario to refurbish six of eight reactors at its Lake Huron plant at a cost of $13-billion. It will begin that work in three years, after delaying the project to synchronize the timing with OPG.

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Critics argue the province is taking on major risks by relying so heavily on nuclear. While Bruce has agreed to cover cost overruns, OPG is a Crown corporation and its financial health is ultimately backed by taxpayers.

"In Ontario, where customers are angry about rising electricity rates, [public acceptance of nuclear] requires a tangible demonstration of value," Mr. Lyash told the conference. "For OPG, it means making sure we achieve on-time, on-budget success at Darlington and all of our projects. And I believe this applies across the industry." However, critics argue the province should cancel the Darlington refurbishment and instead rely on imports from Quebec, renewable sources and aggressive conservation efforts.

"Nuclear projects always become financial fiascoes," Greenpeace Canada's Shawn-Patrick Stensil said. "Premier [Kathleen] Wynne's plan to rebuild 10 reactors is the biggest threat to Ontario's electricity supply, climate targets and energy prices over the next decade."

But a spokesman for Ontario Energy Minister Glenn Thibeault said there is no better option for the province that the refurbishment of the fleet of Candu reactors.

Nuclear plants provide about 60 per cent of the province's power, the spokesman, Colin Nekolaichuk, noted. "Neither renewables with storage nor power from Quebec can come close to meeting that level of demand," he said.

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About the Author
Global Energy Reporter

Shawn McCarthy is an Ottawa-based, national business correspondent for The Globe and Mail, covering a global energy beat. He writes on various aspects of the international energy industry, from oil and gas production and refining, to the development of new technologies, to the business implications of climate-change regulations. More

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