Could small modular reactors help to achieve Canada’s net-zero emissions goals?

Proponents of small modular reactors (SMRs) say Canada will need to build and deploy nuclear technology to achieve the nation’s climate goal of net-zero carbon emissions by 2050.

Opponents of the technology, however, argue that spending public money on SMRs doesn’t make economic or environmental sense, and they have called on the federal government to immediately cease investment in SMRs.

Ottawa continues to provide funding to companies that are developing SMRs. Natural Resources Canada, with the nuclear industry, co-chaired the development of an SMR Roadmap and an SMR Action Plan aimed at deploying the small reactors.

Power companies plan to build Canada’s first commercial SMR connected to the electrical grid in Ontario, followed by four units in Saskatchewan and a demonstration project with two SMRs in New Brunswick. Unlike power plants fueled by natural gas or coal, nuclear reactors don’t emit greenhouse gases.

“There’s no way of achieving a net-zero future without very significant amounts of new nuclear power,” John Gorman, president and CEO of the Canadian Nuclear Association representing the industry, told Research Money.

Providing enough clean electricity to replace GHG-emitting fossil fuels in transportation, heating, heavy industry and other sectors means Canada will need to triple the size of its clean electricity generation system to meet its net-zero target, Gorman said.

That’s the equivalent of adding 19 nuclear power sites the size of Bruce Power in Ontario — the world’s largest nuclear power station that generates more than 6,200 megawatts of electricity — between now and 2050, he said.

While energy from wind, solar and hydropower will be needed, “you’d have to cover two and a half small provinces with solar panels to create that much electricity,” Gorman said.

Electricity from wind and solar is intermittent, depending on the wind blowing and the sun shining, said Robin Manley, the vice-president of new nuclear development at Ontario Power Generation (OPG).

Even with wind turbines and solar panels covering the landscape, and all backed up by long-term battery storage, renewables can't provide the baseload power that is needed 24/7, he said in an interview.

Exponentially growing the amount of solar, wind and hydropower generation in Canada would require a massive build-out of new transmission lines and associated infrastructure by 2050, Manley said.

“That’s just a pipe dream,” he said.

Advantages of small modular reactors

Proponents of SMRs say they have advantages compared with large conventional reactors.

Because of their small size and modular structure — they range from a couple of megawatts up to 300 megawatts — the components for SMRs can be mass-produced in a factory and transported to sites for assembly, rather than requiring extensive construction onsite. This makes their capital cost much cheaper than large reactors, Gorman said.

SMRs also are capable of generating both electricity and high-temperature heat — along with clean hydrogen — so they can replace fossil fuels in industries that are difficult to decarbonize, he said.

“We see a key role for SMRs being used for clean process heat and steam to decarbonize heavy industry and the extraction industry, including mining operations, the oilsands, cement manufacturing and fertilizer production,” Gorman said.

He also pointed to safety features in SMRs, such as automatic shut-down systems and the use of gas or molten salt rather than water to cool the reactor.

Twelve SMR designs are currently going through the Canadian Nuclear Safety Commission’s review and licensing process, Gorman said. However, none of them have been approved for construction.

As for costs, none of the proposed SMR projects in Canada have finalized capital and operating costs. Studies led by Ontario Power Generation and NRCan found that Canada’s first SMR could cost $1 billion to $2 billion.

Those studies also showed that when SMRs are deployed at scale in large numbers, “they are going to be very cost-competitive with other low-carbon alternatives, including renewables,” Gorman noted. However, government funding will be needed to deploy the first SMRs, he added.

Federal and provincial support for SMRs

The federal government’s investments to date in SMR technology include:

• $50.5 million for Moltex Energy Canada Inc. to develop a technology that will produce emissions-free energy through recycling existing spent nuclear fuel;
• $5 million for New Brunswick Power, and more than $500,000 to the University of New Brunswick, in support of SMR development and deployment in the province; and
• $20 million from the Strategic Innovation Fund to Terrestrial Energy that will enable the Ontario company to take a critical step toward commercializing its SMR technology.

At the provincial level, a strategy for deploying SMRs is expected to be publicly released within weeks by Ontario, New Brunswick, Saskatchewan and Alberta, which have signed an MOU to jointly develop and deploy the technology.

Last month, Ontario Power Generation selected a 300-megawatt SMR design by GE Hitachi Nuclear Energy to be built at OPG’s Darlington nuclear power generation site.

The site already has an existing approved environmental assessment as well as the first of the necessary licences from the Canadian Nuclear Safety Commission, OPG’s Manley said.

“We have the ability to go first and to deploy this first SMR,” he said. “That will enable others, if they want to, to use the same technology and also build the new nuclear program, supply chain and business capability in Canada.”

While a date for the Darlington SMR’s operation has yet to be decided, “the goal is before the end of the 2020s, as early as the end of 2028,” Manley said.

The project would provide 2,660 jobs during its lifetime, contribute more than $2.5 billion to GDP, and generate more than $870 million in provincial revenue, according to a study by the Conference Board of Canada.

SMR “micro-reactor” for remote sites to be built

OPG also has partnered with Seattle-based Ultra Safe Nuclear Corporation, in a joint venture called Global First Power, to build an SMR “micro-reactor,” a 5-MW unit at Chalk River, Ont.

Such small SMRs, not connected to the electricity grid, could be used in remote communities or at mining sites to replace polluting and costly diesel-fueled power, Manley said.

Power companies intend to use a “fleet” approach to deploy various-sized SMRs in multiple jurisdictions. After the Darlington SMR is built, Saskatchewan plans to build up to four SMRs to replace its coal-fired power plants, with the first nuclear reactor expected to be in service in 2032.

New Brunswick Power plans to build a demonstration project at its Point Lepreau nuclear power generation site, using two advanced SMRs, one by ARC Clean Energy and the other by Moltex Energy.

SMRs have the potential to play a major role in decarbonizing the electricity grid in New Brunswick (which still uses some coal-fired power) and Atlantic Canada, said Keith Cronkhite, president and CEO of New Brunswick Power.

“New Brunswick will be the centre of excellence for the development of advanced SMR technology in the 2020–2035 time period," Cronkhite said in an email.

But a new study by the Calgary-based Pembina Institute found that phasing out coal-fired power in New Brunswick and Nova Scotia with a clean energy portfolio — including solar, wind, hydropower and battery storage — would be less than half as expensive, per unit of electricity generated, compared with the cost of SMRs to achieve the goal.

'No case' for public money to be invested in SMRs, opponents say

Opponents of SMRs argue that, based on the history of cost overruns and construction delays in the global nuclear industry and experience with SMRs in other countries, Canada’s plan for the small nuclear reactors is destined to fail.

The modular approach to building SMRs in factories hasn’t reduced construction costs at all, said Dr. M. V. Ramana, PhD, a physicist and professor at the University of British Columbia, where he’s the Simon Chair in Disarmament, Global and Human Security.

“There is no case for public money to be invested,” Ramana told Research Money.

An analysis by independent researchers in the World Nuclear Industry Status Report 2021 found that SMRs will be subject to delays and cost overruns, won’t be ready for deployment in the next decade, if ever, and are highly unlikely to be economical.

For example, the cost of two SMRs being built in Georgia in the U.S. has ballooned to more $30 billion, more than twice the original price tag, mainly due to repeated construction delays, Ramana noted.

Building small reactors doesn’t have the economies of scale achieved with large conventional reactors, he said. This means Canada would need to build hundreds, if not thousands of SMRs, to make the modular construction approach commercially viable, according to several reports and peer-reviewed studies by Ramana and other researchers.

Their studies show the cost of a 3-megawatt SMR will be an estimated $529 million including fuel loading, compared with $23 million for a 3-MW wind power plant or $9 million for a 3-MW solar plant. SMRs could cost as much as 10 times that of diesel fuel, Ramana said.

For remote communities and mining sites, the cheaper option is to add wind and solar power, he said.

Environmental lawyer Kerrie Blaise, northern services legal counsel at the Canadian Environmental Law Association (CELA), said even if SMRs are deployed, they will be “too little, too late” to help achieve Canada’s climate goal.

“Quite simply, you can’t get to net-zero by 2050 if you’re only starting to reduce emissions in the 2030s,” she said in an interview.

More than 120 civil society, public interest and Indigenous groups have signed a letter condemning the federal government’s push to pursue nuclear power and SMRs. The groups called SMRs “dirty and dangerous,” creating new forms of radioactive spent fuel waste that would increase the risk of weapons proliferation.

The 23-group Green Budget Coalition, in its pre-Budget 2022 submission, has called on Ottawa to “eliminate federal funding and reject [the nuclear industry’s] calls to rollback accident liability for SMRs, and reallocate investments towards renewable technologies that are proven, socially acceptable and scalable now.”

On the other hand, a report this month by the Conference Board of Canada said innovative technologies like SMRs “have strong potential to support the transition to a net-zero economy, but only if utility companies can access the financing they need to deploy them.”

The Canadian Nuclear Association’s Gorman said that in addition to building SMRs for the domestic market, Canada plans to export the technology to a global market forecast to be worth about $300 billion per year by 2040.

“We’ve got a lot to gain, not only in helping ourselves here at home decarbonize but helping other nations do it, and benefiting economically in the process," Gorman said.

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