Small Modular Reactors: Promising Climate Solution, or Niche Clean Energy Technology?

Nuclear technology is already well-established in Canada and worldwide. Small Modular Reactors (SMRs) are an emerging technology that presents advantages as a new clean energy production source. While some suggest SMRs can play a key role for Canada to achieve its 2050 net zero targets, others express concerns about the timeline under which such technology could be deployed at scale. The climate change clock is ticking; will SMRs be able to contribute substantially to Canada’s transition to net zero?

Highlights

• The use of small module reactors (SMRs) to deliver affordable, flexible energy at scale will make getting to net-zero “massively easier”, said panel experts.
• Called the “Swiss army knife of energy supply,” SMRs can deliver grid-scale power in hard-to-reach locations, such as Canada’s rural and remote northern communities. Especially advantageous for Canada’s industrial sector, they can provide both power and high temperature heat needed for industrial processes.
• Canada is a leader in the nuclear SMR space. Ontario Power Generation will deploy the first grid-scale SMR in North America in 2028, and Saskatchewan’s SaskPower is looking to do the same before 2040.
• The nuclear waste cycle, including the effective and safe management of spent fuel, remains a prominent concern among experts and the public. To avoid losing momentum to the U.S.’s recent climate policy advances, research dollars must be directed toward the safe management of nuclear waste, capacity building, and strengthening of nuclear supply chains.
• A challenge for the nuclear industry is how to support, and not detract from, a net-zero, renewable-powered energy grid, especially as renewables become so cheap. Some experts question how well nuclear SMRs will be able to “play nice” in a renewable-powered clean energy grid.
• Panel experts say the stable, low-carbon energy provided by SMRs will complement intermittent renewable energy sources such as wind and solar, creating a grid that is “balanced, resilient, and affordable.”
• Canada will face a challenge balancing competition and cooperation with the U.S. and needs to be mindful about how it will compete across supply chains, human resources, and financing. The U.S. is “sending a message to the entire world that they are intent on being a clean energy superpower…and many nations like Canada are now contemplating how it is we’re going to keep up.” (John Gorman)

Summary

Small module reactors (SMRs) are a promising technology in Canada’s low-carbon energy arsenal, expert panelists on our February 28 webinar agreed.

Simpler to manufacture than traditional nuclear power plants, SMRs are significantly more affordable than their counterparts thanks to a smaller design and cheaper construction and operations costs. The “Swiss army knife of energy supply,” Canadian Nuclear Association President and CEO John Gorman praised SMRs for their unique ability to deliver low-carbon, grid-scale power in hard-to-reach locations, like rural and remote northern communities. SMRs can also produce power alongside high-temperature heat, a boon for decarbonizing the industrial sector, which currently relies heavily on burning fossil fuels for industrial processes.

“The race to net zero is a marathon, not a sprint,” adds Gorman. “We need to make deliberate decisions in a very thoughtful way in terms of bringing all technologies to bear as we work towards that net zero future.”

Advocates agree that SMRs will be critical to addressing climate change and helping Canada meet net-zero targets. For smaller grids in provinces like Saskatchewan, their deployment could support the integration of intermittent renewable energy sources such as wind and solar, creating an energy grid that is that is “balanced, resilient, and affordable.”

“Do we absolutely need nuclear power to be in the [energy] mix?” asked Daniel Kammen, Director of Renewable and Appropriate Energy Laboratory at UC Berkeley. “I would say the answer is a controversial no. But would it make the job massively easier? I think that’s a clear yes.”

But with the plummeting cost of solar and other clean energies, experts are concerned about the ability of nuclear to “play nice” in net-zero future powered by renewables. Significant funding and research is still needed to address concerns like nuclear waste management, technology deployment speed, and labour and supply chain capacity.

“I’m much less concerned about the technical functioning of the reactors than about the economics and the management of the back-end fuel cycle,” says Dr. Kammen. “The idea that SMRs are going to transform the world…that depends on this strategy of mass-producing reactors, central management of waste, and somehow getting very, very large improvements in cost and in safety.”

Canada is a leader in SMR deployment, with a recent announcement to open the first grid-scale SMR in North America, designed by GE Hitachi, at Ontario Power Generation’s Darlington site in 2028. Industry experts feel confident Canada can and should leverage its 70 years of nuclear technology experience to become a global leader.

“Canada is first in and best dressed. And that stems from all the things that we have: uranium mining to nuclear waste management, research and development, supply chain jobs, the talent…we need to leverage all of that,” says Lisa McBride, Country Leader for Small Modular Reactors at GE Hitachi’s Nuclear Products Division.

But pressure to move quickly is increasing. Since signing the Inflation Reduction Act into effect in 2022, the U.S. is moving swiftly to catalyze investment in clean energy manufacturing and supply chains, and Canada risks missing out. Bolstering Canada’s carbon regulatory market is one route to increase the attractiveness of our green economy over the U.S.’s, but would require the Canadian government to move quickly to address carbon pricing uncertainty.

To address the waste management issue—a common public concern—the Canadian government recently directed $29.6 million in funding toward SMR waste management research and supply chain development. “If nuclear is to play a significant role in Canada and the world going forward, we’re going to need to ensure…that these reactors can receive fuel in a safe and timely manner,” says Justin Hannah, Senior Director of the Nuclear Energy and Infrastructure Security Branch at Natural Resources Canada. Hannah also emphasized the role of the Canadian government to work closely with Indigenous communities in supporting and partnering on nuclear projects.

Nonetheless, the window for meaningful action that will decarbonize the Canadian grid by 2050 is closing. Whether SMRs remain on the sidelines as a niche energy technology, or rise through regulatory and economic hurdles to become a heavyweight of the clean energy transition, has yet to be seen. One thing panel experts can agree on: In the clean energy economy of the future, nuclear will almost certainly be part of the mix. Canada’s challenge is now to figure out how to keep up.

We are grateful to all our panelists and our moderator for sharing their expertise and insights into the challenge that are Small Modular Reactors.

This panel was part of the Transition Accelerator’s Pathways to Net Zero webinar series. The Transition Accelerator is a charity dedicated to empowering and guiding decision-makers toward net zero with the tools and knowledge they need to unlock a sustainable future for Canada.

To learn about upcoming webinars or review our previous events, be sure to visit our webinar page. We’ll see you on March 8, 2023, to discuss “Responding to the IRA: Creating a Canadian Advantage?”.

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