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Canada explores small modular nuclear reactors for Arctic areas

20 July 2021 IHS Markit Energy Expert

In a virtual pep talk in June, the head of Canada's main nuclear research organization told delegates attending the Arctic Development Expo that small modular reactors (SMRs) have the potential to serve as a safe, cost-effective, and reliable source of clean energy in the remote region.

"We believe that SMRs have the potential to serve as a transformative technology for regions such as Canada's Arctic, serving as the foundation for environmental, social, and economic prosperity," said Joe McBrearty, president and CEO of Canadian Nuclear Laboratories (CNL).

SMRs are small nuclear plants designed to produce 1 MW to 300 MW of electricity per module. They are factory built and shipped to sites, which speeds up the construction process, though the cycle from design to regulatory approval still can take several years.

Globally, some 70 SMRs are in various stages of development and two research reactors are operational in China and Japan, according to the International Atomic Energy Agency (IAEA).

Just one has been commercially deployed—onboard the Akademik Lomonosov, a floating nuclear power plant anchored off Russia's Arctic coast.

Industrial groups in North America are interested in the sector, including Fluor, which owns SMR developer NuScale Power. In June, the US Nuclear Regulatory Commission proposed to certify NuScale Power's 77-MW SMR design as safe for domestic commercial use; it would be the first advanced reactor to receive said certification.

Canada bets on SMRs

In November 2018, Canada released an SMR Roadmap, identifying opportunities in the sector. It also argued that the technology will help the country achieve a low-carbon future. In December 2020, the government released an SMR Action Plan, which it updated in May 2021, outlining Canada's ambition to become a world leader in the SMR market.

SMRs "are a potential game-changing nuclear technology that can play a critical role in reducing greenhouse gas emissions while delivering good, middle-class jobs for Canadians as Canada moves toward net zero by 2050," said Alycia Sevigny, a spokeswoman at Natural Resources Canada, in an email to OPIS.

Sevigny said that nuclear energy is already an important part of Canada's non-emitting energy mix, providing 15% of the country's electricity and avoiding over 50 million metric tons of GHG emissions every year. "Alongside renewables such as wind and solar (in which the government is already investing) nuclear energy will continue to play a key role in achieving Canada's low-emissions future," Sevigny added.

For remote sites, Canadian energy authorities have said SMR could provide clean, economical, and reliable power and heat to mines and surrounding communities, reducing or eliminating reliance on diesel.

But the government's roadmap has received some pushback from activists questioning the logic of spending taxpayer money on a technology that would produce hazardous nuclear waste. Other opponents have criticized the cost and time to build nuclear reactors, calling them "distractions" from the actions needed to transform to a green economy.

The government and the Canadian nuclear industry have largely ignored the protestations, instead choosing to pursue the program.

There are three streams of SMRs being developed in Canada: on-grid power (150 to 300 MW), heavy industry (10 to 80 MW), and remote communities (1 to 10 MW).

"We really see small modular reactors as an opportunity to integrate with renewables and complementary (to other low-carbon energy options)," said Keyes Niemer, CNL project manager for SMR deployment. "There are cases when renewables do not work in every climate, 365 days a year."

CNL's announced goal is to have a demonstration SMR unit built at one of its sites by 2030. Also, it is working with Atomic Energy Canada Limited (AECL), which has supported Ottawa-based developer Global First Power on its SMR design. In May, the Canadian Nuclear Safety Commission said it completed preliminary evaluations for Global First Power's application for a license to prepare a site for an SMR at AECL's Chalk River Laboratories.

Niemer said SMRs can help Canada meet its climate targets. In an updated Nationally Determined Contribution, which is the country's plan to reach interim GHG reduction goals on the way to net-zero emissions, Canada said it aims to reduce its emissions by 40-45% compared with 2005 levels by 2030.

Cost and safety concerns

A group of scientists has raised questions about the cost of SMRs. In a study published on the ScienceDirect website in September 2020, they said the electricity that SMRs produce would be far more expensive than diesel-based electricity. They also said the total demand for electricity in the proposed markets was insufficient to justify investing in a factory to manufacture the reactors.

OPIS spoke to one of the authors of the study in June, M. V. Ramana, director of the Liu Institute for Global Issues at the University of British Columbia, who made the point that smaller reactors are particularly costly for the output they deliver. "The rule of thumb is that the smaller you become, the more expensive it gets per unit of electricity generated," Ramana said.

The nuclear industry is pushing a technology that has not been deployed at scale, anywhere in the world, he said. "Experience suggests that they will be expensive, will take a long time to construct, and will produce the known impacts of all nuclear power plants, including radioactive waste," Ramana said.

In addition to cost, Ahmed Abdulla of Ottawa's Carleton University, another author of the study, said that safety remains a concern. Risks have always existed with nuclear power, given that they produce toxic waste, he explained.

CNL's Niemer, however, sees no safety problem. Many of the reactors are designed to run for 20 years, and they have unique features which make them safer than large, traditional facilities, he said. "You would not actually have to refuel the reactor on site; you would actually remove the whole core," he said.

Given the smaller size of SMRs, many are designed with the reactor unit underground (as is the case with NuScale Power's design for the US market), Niemer added. "This provides a number of advantages, including additional protection from natural or man-made hazards. In most cases, the balance of the plant (non-nuclear portion) would still be above ground," he said.

$300-billion market

Speaking at a press conference in early June, IAEA Director General Rafael Mariano Grossi said SMRs could be an affordable and flexible option for low- and middle-income countries.

US policymakers and companies certainly see it that way. In January, the US Trade and Development Agency provided a grant of $1.28 million to Nuclearelectrica, the state-owned power producer in Romania, to identify potential sites for deploying SMRs.

The World Economic Forum estimates the SMR market could be worth $300 billion annually by 2040, both as an affordable, flexible option for low- and middle-income countries, and as an extension of wealthier nations' nuclear power production.

The latest edition of the IAEA's Advanced Reactors Information System (ARIS) booklet, published in October 2020, states that 72 reactors are under development in 18 countries. Multiple sites are listed for Canada, China, Japan, South Africa, Russia, the US, and the UK. Even so, Abdulla believes the program remains an extremely precarious enterprise.

"We will see a few built, but the question of whether it will become a wedge in our climate stabilization plan is as open as it was 10 years ago. There is no convincing answer one way or the other," he said.

--Reporting by Abdul Latheef, OPIS, with contributions by Kevin Adler, Net-Zero Business Daily

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