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Small Nuclear Reactors Hold Potential for Canada achieving net-zero emissions by 2050

'Study Conclusion: Canada needs to hedge its big bet on solar and wind power by adding SMRs to our electricity mix.'

Published 11/21/2022 | By John Richards, Christopher Mabry - C.D. Howe Institute News

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Small Nuclear Reactors Hold Potential for Canada achieving net-zero by 2050

Canada – To have realistic hope of meeting its net-zero greenhouse gas emission goals by 2050, Canada needs to embrace more fully small modular reactors (SMRs), the newest innovation of nuclear design, says a new C.D. Howe Institute report.

In “Power When You Need It: The Case for Small Nuclear Reactors,” authors John Richards and Christopher Mabry offer a detailed survey of projections of global and Canadian electricity demand, the costs and flexibility of each green technology. They come to the conclusion that Canada needs to hedge its big bet on solar and wind power by adding SMRs to our electricity mix.

The variable output of wind and solar, absent vastly improved storage technologies, means the world will need anywhere from two to five times as much nuclear power by 2050, according to the UN's International Panel on Climate Change. Over-reliance on the vagaries of wind and sun has already led to system instability in places like California, the authors observe.

Small reactor designs have advantages over the giant complex installations that make up Canada’s current aging 19-reactor fleet.

Many SMR designs keep component size small enough for transport by truck or rail. The buyer receives a fully assembled product that fits into the designated site or comes in several pieces to be assembled on-site. SMRs can be used in tandem. Small towns might use one unit, while metropolitan areas use four or five.

They are also safer – passive emergency shutdown is a feature – and far more flexible than the behemoth reactors in use today. Some designs produce high-temperature steam, ideal for oilsands extraction and desalinization of water. They can also be located close to the ultimate consumer, reducing transmission costs, and are scalable in size, with some designed to produce less than 25 megawatts, which would make it possible to replace the hundreds of diesel generators scattered across Canada’s remote communities.

Importantly, the respected International Energy Agency estimates that cost of power generated by SMRs is probably as cheap as or cheaper than wind or solar electricity.

Canada is not alone in pursuing SMR development. China, US, France, and other nations are pursuing several SMR designs.

“Canada is uniquely positioned as a country with a reliable track record on nuclear since the 1960s,” says co-author John Richards, an Emeritus Professor, Simon Fraser University and Fellow-in-Residence at the C.D. Howe Institute. “We are the second-largest producer of uranium globally. It is estimated that we could support in Canada 70-80 percent of a SMR supply chain, from fuel production to parts manufacturing.”

The federal government could do more to help, he says. Last month’s $970 million SMR commitment from the Canada Investment Bank is welcome, as is the eligibility of SMRs to a green tax credit. However, nuclear is still excluded from Ottawa’s Green Bond Framework and other clean energy funding programs.

“It’s important we don’t put all our eggs in the wind and solar basket,” Richards concludes.

The Study in brief

  • The 2021 Canadian Net-Zero Emissions Accountability Act requires Canada to achieve “net zero” greenhouse gas emissions (GHGs) by 2050. An important component of the goal is that the power sector realize “net zero” by 2050.
  • The Canada Energy Regulator (CER) has developed a net-zero projection for the power sector, emphasizing renewables (hydro, wind, solar). Wind and solar comprise 60 percent of projected increase in generation between 2019 and 2050.
  • While wind and solar provide low-GHG power, these technologies require “storage” of power not needed in the middle of the day. Whatever the form, storage requirements increase the system cost of wind and solar.
  • Several power utilities (notably California) have faced system instabilities due to inadequate capacity of readily “dispatchable” sources (hydro, fossil-fuel, and nuclear) able to meet demand when the sun is not shining and/or the wind is not blowing.
  • The CER envisions refurbishing some existing reactors, but no expansion of Canadian nuclear capacity. By contrast, the UN’s International Panel on Climate Change and the International Energy Agency conclude that more nuclear power is necessary for elimination of GHGs in the power sector.
  • In order to meet net-zero targets, many countries (e.g., China, Russia, and France) are investing heavily in small modular reactors (SMRs), which may realize shorter construction time, as well as simpler and safer designs than conventional reactors. Canada is well placed to promote SMRs, given our history of nuclear development and domestic sources of uranium.

Introduction:

In a 2018 report targeting policymakers, the UN’s International Panel on Climate Change (IPCC) discussed four strategies to contain the world temperature increase to 1.5 degrees Celsius, relative to pre-industrial levels (see Box 1). All four require an increase in nuclear power. Relative to world nuclear power capacity in 2010, the minimum estimated requirement by 2050 is a doubling of nuclear power capacity (pathway two); the maximum requirement (pathway three) is a five-fold increase.1

The International Energy Agency (IEA) comes to a similar conclusion in its annual World Energy Outlook (October 2022):

In the [net zero emissions by 2050] scenario, electricity becomes the new linchpin of the global energy system, providing more than half of total final consumption and two-thirds of useful energy by 2050. Total electricity generation grows by 3.3% per year to 2050, which is faster than the global rate of economic growth across the period. Annual capacity additions of all renewables [wind, solar, hydro] quadruple from 290 GW in 2021 to around 1 200 GW in 2030. With renewables reaching over 60% of total generation in 2030, no new unabated coal fired plants are needed. Annual nuclear capacity additions to 2050 are nearly four times their recent historical average. (IEA 2022b, 121.)

Canada has committed itself by law to realize “net zero” power in terms of greenhouse gas (GHG) emissions by 2050.2 The intent of this E-Brief is to assess the potential for nuclear power as a major component in realizing net zero in electricity generation. In particular, we emphasize the potential role of small modular reactors (SMRs).

Canada is uniquely positioned as a country with a track record of relying on nuclear. Though unknown by most Canadians, Canada has been successfully operating nuclear reactors for over 70 years. Currently, we operate 19 nuclear reactors located in Ontario and New Brunswick. We are the second-largest producer of uranium globally, attributable to mining operations in Saskatchewan, and it is estimated that we could support in Canada 70-80 percent of a nuclear supply chain, from fuel production to parts manufacturing (OPG 2021).

Since the Canada Energy Regulator (CER) is a federal government agency, we examine its 2050 net-zero projection, a projection that relies heavily on expansion of renewable power sources (wind, solar, and hydro), envisions no increase in nuclear capacity, and assumes only a modest increase in total electrical consumption from 2019 to 2050. For reasons we discuss below, the very heavy reliance on wind and solar raises potential problems concerning the instability of power utilities. The Achilles heel of wind and solar is provision of adequate storage, at reasonable cost, of power not needed in the middle of the day, but needed when the sun is not shining and/or the wind is not blowing.

John Richards has written extensively on social policy in Canada and his current social policy focus is on Aboriginal policy. He is a Professor, Public Policy Program, at Simon Fraser University. He co-edits (with Henry Milner) Inroads, a Canadian policy journal. In addition, he has undertaken teaching and research in Bangladesh over the last decade.

Christopher Mabry, Master’s of Public Policy, Simon Fraser University, is a Policy Analyst with the Government of Canada.

The authors thank Charles DeLand, Benjamin Dachis, Alexandre Laurin, Chris Benedetti, Dave Collyer, Laurie Pushor, Gary Rose and anonymous reviewers for comments on an earlier draft. The authors retain responsibility for any errors and the views expressed.

 
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