To lead on climate, Canada should invest in the next generation of nuclear reactors

The Globe and Mail
March 13, 2020

Robert Bryce’s latest book is A Question of Power: Electricity and The Wealth of Nations, from which this essay is adapted.

Coal use in Canada continues to decline. In 2018, the amount of electricity produced from coal was about 59 terawatt-hours, or roughly half as much as the country’s utilities were producing in 2000.

Canada was able to slash its coal use thanks to its reliable nuclear plants, an increase in natural-gas-fired generation and growth in renewables. But if you think the rest of the world is going to quit using coal, think again. A total of nearly 200 gigawatts of new coal-fired capacity is now under construction around the world in places such as China, India, Turkey, Vietnam, Pakistan, Indonesia, Bangladesh and the Philippines. Furthermore, and perhaps most surprisingly, Japan, the birthplace of the Kyoto Protocol, the world’s first international agreement to cut greenhouse gas emissions, is also building new coal plants, up to 22 of them.

While it won’t happen overnight, Canada could help reduce global coal use. How? By accelerating the development and deployment of the next generation of smaller, safer, cheaper nuclear reactors.

Before looking at how Canada might catalyze a surge in global nuclear capacity, it’s essential to understand coal’s role in electricity production. Coal has been a mainstay of power generation since Thomas Edison used it to fuel the world’s first central power station on Pearl Street in Lower Manhattan back in 1882. Climate activists want to see all coal-fired power plants shuttered. But electricity is the world’s most important and fastest-growing form of energy. Modern life is impossible without electricity. Therefore, countries will do whatever they have to do to get the electricity they need.

Japan and other countries are building coal plants because they know their economies will suffer if they don’t have enough electricity. Blackouts and expensive electricity are bad, particularly for politicians. Nobody ever got elected by promising less energy or less prosperity.

Coal persists for many reasons. First among them: It’s cheap. In Asia, coal is usually about one-half to one-third of the price (on an energy-equivalent basis) of imported liquefied natural gas. Second, coal prices are not affected by any OPEC-like entities that could curtail supplies and therefore cause price spikes. Third, the world has gargantuan coal deposits. At current rates of consumption, global coal reserves are projected to last another 134 years. Finally, there is little technology risk. Numerous engineering and construction companies from countries such as Japan, China and Malaysia can design, build and operate coal-fired power plants. Those companies can also help obtain the financing for those power plants.

For all of those reasons, according to BP, coal’s share of global electricity production has stayed at about 38 per cent for the past three decades.

Moving the needle on coal consumption will require a major expansion of nuclear energy. That expansion will require new reactor designs that are smaller, cheaper, safer and faster to build than the ones now in use. That’s where Canada can play a role. With its many decades of experience in nuclear development and regulation, the Canadian government has the expertise needed to cultivate and license a new wave of small modular reactors, known as SMRs.

As an American, it pains me to say this, but the Canadian regulatory system appears to offer a faster – and cheaper – pathway to licensing than what’s available under the oversight of the U.S. Nuclear Regulatory Commission (NRC). A few years ago, an official with a company developing an SMR said that his outfit chose to domicile in Canada because it didn’t see a plausible path to licensing in the United States. In 2015, the U.S. Government Accountability Office concluded that obtaining certification from the NRC for a new reactor is “a multi-decade process, with costs up to $1-billion to $2-billion, to design and certify or license.”

To be clear, the U.S. has enacted legislation to speed up the development and licensing process. But earlier this month, an official with Oregon-based NuScale Power said the process is still “very long, very tedious and very expensive.” NuScale is developing an SMR that it aims to have operational by 2027.

The hard truth about nuclear energy is that it requires strong government backing. Sure, a new reactor can have great engineers and be backed by a large and reputable company, but to succeed in the global electricity generation sector, it must have a stamp of approval from a credible regulator. The Russians are building reactors in countries all around the world and are doing so through their state-owned company, Rosatom. That backing has given the Russians a head start in the SMR race. In December, Rosatom began providing electricity to the Arctic port town of Pevek by way of a 70-megawatt power ship that uses a pair of reactors similar to those used on icebreakers.

Canada doesn’t have to create its own version of Rosatom. Instead it can be the government that gives its stamp of approval to new reactor technologies. That should be sufficient for commercialization of a new reactor design. After all, if it’s good enough for Canada, then it should be good enough for Vietnam, Indonesia or other places where electricity demand is soaring.

Canada has momentum. Six SMR companies have submitted formal applications to develop their reactor at a Canadian Nuclear Laboratories site and are aiming to get their machine up and running by 2026. Another positive development: Last year, Ontario, New Brunswick and Saskatchewan signed a co-operation agreement to develop SMRs and stated that they want to bring the first new SMR online by 2028.

The bottom line is that if there is no credible pathway toward widespread decarbonization that doesn’t include large increments of new nuclear capacity. Last year, Fatih Birol, the executive director of the International Energy Agency, said that without “more support for nuclear power … global efforts to transition to a cleaner energy system will become drastically harder and more costly.”

Canada has an opportunity to be a leader in certifying the next wave of nuclear reactors. It should seize that opportunity.

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