Like The Hub?
Join our community.
Join

Is nuclear energy worth the eye-popping up-front price tag?

News

Although nuclear power only accounts for 16 percent of Canada’s current energy generation, Ontario is going all-in.

The plan, to construct multiple new nuclear reactors, including one that will be the largest in the world, was met with a mixture of praise and skepticism when it was revealed earlier this month. Proponents welcomed cheaper electricity and lower carbon emissions and critics pounced on nuclear power’s reputation for poor cost-effectiveness. 

The price tags may be a hard sell for politicians, with costs pushing past $10 billion for large reactors. But nuclear power’s supporters say that once the massive initial investment costs are overcome, it is both cheap to produce and consume in the long-run.

The real costs of nuclear energy are often misunderstood, says Nicholas Palaschuk, a senior research associate of innovation and technology at the Conference Board of Canada. 

“When compared to other forms of clean or low-carbon energy, large scale nuclear and small modular reactors alike certainly tend to have higher upfront capital costs,” says Palaschuk. “A new CANDU (Canada Deuterium Uranium) reactor in Canada typically costs somewhere in the range of $10 to 15 billion CAD.” 

The cost-difference pales in comparison to the issue of capacity, though, according to Andrew Evans, a research assistant at the Center on Global Energy Policy and former Ford government staffer, writing in an upcoming piece at The Hub.

“Critics may say that even at that price, nuclear power costs more than renewable sources like wind and solar, which is true, especially as costs have fallen dramatically in solar in recent years. But the issue is that Ontario lacks sufficient generation potential in those sources to power future electricity demands in meaningful ways,” writes Evans.

Part of the Ontario government’s plans to expand nuclear power include the construction of several SMRs (small modular reactors), which generated up to 300 megawatts of electricity. 

Critics of nuclear power like Susan O’Donnell, a spokesperson for the Coalition for Responsible Energy Development and professor at the University of New Brunswick, have cited the lack of cost-effectiveness of SMRs. 

“They haven’t been built yet, and one of the reasons that we’re here today is because they are such a bad investment that private sector money isn’t rolling into them,” O’Donnell said. “They’re going to need billions of dollars in public funds.”

The final costs of the SMRs, or the larger nuclear projects planned by the Ontario government, have not been made available, and must first be approved by the federal government.

In terms of the levelized costs of electricity (LCOE), which is the minimum price that electricity must be sold at to cover lifetime costs, nuclear power is often cheaper outside of North America. 

In 2017, the Canada West Foundation published a report comparing the LCOE of nuclear power in four countries, finding that nuclear power had a lower LCOE than wind or solar in Korea, France, and the United Kingdom, with only nuclear power in the United States being the more expensive option. 

Palaschuk says LCOE is a useful statistic from an investor’s point of view but does not tell the whole story. 

“It’s not a fulsome metric for comparing dispatchable generation with intermittent renewables from a policy perspective,” says Palaschuk. “What isn’t factored into LCOE calculations is a consideration of the intermittent nature of renewable technologies like wind.” 

Chris Keefer, the president of Canadians for Nuclear Energy, says Canada is fortunate to derive roughly 60 percent of its energy from hydropower, with nuclear bringing up about 15 percent, but that fully electrifying the economy will require massive upscaling of clean energy projects, including nuclear. 

“In terms of scaling, our largest source of power generation in Canada, hydro, can’t do that,” says Keefer. “In terms of wind and solar, these are shallow de-carbonizers. They do not replace fossil fuels, because they require a one-to-one backup for the times in which the weather doesn’t cooperate.” 

Palaschuk says building new hydropower generators incurs costs due to land use change, impacts on Indigenous communities, and ecological degradation from building new dams. 

“Historically, renewables have received much more in the way of government subsidies which has helped bring down costs,” says Palaschuk. “Alternatively, SMRs offer significant upside in the way of decarbonizing remote and off-grid communities in Canada while unlocking the potential of critical mineral supply chains.” 

The construction of the W.A.C. Bennett hydroelectric dam along the Peace River in northern B.C. is regarded as a landmark infrastructure project, but its construction resulted in the displacement of many Indigenous residents of the area due to the diverted water. 

In a previous article for the Hub, Jesse McCormick of the First Nations Major Projects Coalition has touted the possibility of SMRs in rural B.C. that are partially or wholly owned and operated by Indigenous communities as an economic and environmental benefit. 

An article in the academic journal Applied Energy estimated that transitioning to a carbon-free economy without a significant nuclear power presence would require up to 50 percent more costs in capital investment. 

Palaschuk says nuclear reactors have operational lifetimes of 40 to 60 years, which helps amortize the high up-front capital costs. He says raising sufficient capital remains one of the greatest barriers to growth for cleantech companies in Canada. 

“This makes cost-effective low-carbon energy solutions paramount to accelerating the transition by making it more attractive to investors, industries, and consumers to adopt sustainable practices,” says Palaschuk. 

Experts see a ‘unique opportunity’ on climate goals with Canada’s nuclear expansion

News

With Doug Ford’s Ontario government modestly expanding its nuclear power capacity and the federal government showing signs it is open to more similar moves, climate experts are seeing a new opportunity for Canada to achieve its objective of carbon neutrality by 2050.

Earlier this month, Ontario announced it was adding a third nuclear generating station to the Bruce Nuclear Generating Station near Kincardine, with the goals of lowering electricity costs and producing lower-emitting energy. Bruce Power is operated by Ontario Power Generation, a Crown corporation of the provincial government. 

“Nuclear is only being used in some parts of Canada, namely Ontario,” says Ryan Katz-Rosene, an associate professor of climate policy at the University of Ottawa. “The recent Ontario announcement positions that province as the real centre of Canadian nuclear development.”

On July 7, just two days after the Bruce Power announcement, the Ontario government declared that it was adding three Small Modular Reactors (SMRs) to the Darlington Nuclear Generating Station in Clarington. SMRs are defined as nuclear reactors producing 300 megawatts (MW) or less of energy. 

Katz-Rosene says that over the last 50 years, nuclear energy has helped the world avoid more than 60 gigatonnes of CO2 emissions, while pointing out the world emitted roughly 40 GT of CO2 in 2022 alone.

In 2017, the National Energy Board reported that hydro generated the majority of Canada’s electricity at 57 percent, followed by nuclear at 15 percent, while the remainder was made up of coal, natural gas, and others.

Both the Bruce Power and Clarington projects will require federal approval, but Prime Minister Justin Trudeau has stated he is open to expanding nuclear energy options in Canada in the name of reaching net-zero carbon emissions.

“There’s a very unique opportunity to help meet the energy needs of remote and isolated, First Nations and Indigenous communities, and also remote and isolated communities in Canada through the future deployment of micro reactors,” says Jesse McCormick, the senior vice-president of research, innovation and legal affairs with the First Nations Major Project Coalition. 

McCormick says SMRs also present a large opportunity for many First Nations and Indigenous communities to become investors, operators, or owners in the nuclear energy sector, even though not all provincial governments are on-side with the federal government on nuclear energy. 

“You have a lot of energy and enthusiasm presented at the federal level…for SMRs as a source of energy generation that’s low-emitting and aligned with our objectives on climate change,” says McCormick. “You’re also seeing mixed support among provinces and territories. For instance, B.C. remains a space where it isn’t currently being entertained or endorsed by the provincial government.” 

B.C.’s current NDP government has stated it does not plan on amending the province’s Clean Energy Act, passed in 2010, that banned nuclear power generation. On the other hand, both Alberta Premier Danielle Smith and New Brunswick Premier Blaine Higgs have recently taken steps to promote the establishment of the provinces’ first SMRs.

The National Energy Board had previously ruled out any concrete plans for Small Modular Reactors in its 2018 Market Energy Assessment. 

However, by 2020, then-Minister for Natural Resources Seamus O’Regan published a message supporting the SMR Action Plan, a project supported by the federal government, provincial governments, and a large number of non-government actors including Hitachi and the University of Toronto.  

According to data from the International Energy Agency, the use of renewable energy increased significantly from 2015 to 2022, but nuclear’s share of the energy pie has remained stagnant. In-fact, nuclear energy has remained a distant fourth behind gas in terms of its share of the world’s energy supply since at-least 1971. 

Katz-Rosene does not think nuclear will massively expand in Canada, and that current policy frameworks leave only modest room for nuclear growth. 

Ontario premier-designate Doug Ford leaves after announcing his commitment to keeping the Pickering Nuclear Generating Station in operation until 2024 on June 21, 2018. Nathan Denette/The Canadian Press.

Many criticisms towards nuclear energy stem from concerns over how to handle the toxic waste produced by the reactors, but McCormick says Canada has a strong regulatory framework for managing spent fuel. While acknowledging that concerns surrounding nuclear projects exist within many First Nations communities, McCormick says there will be more confidence in those projects if they are First Nations-led. 

“I think that is the path forward, where First Nations have been engaged effectively, have the necessary capacity to evaluate and confirm for themselves the safety, environmental, potential cultural impacts of new deployments, and are capacitated to enter into partnerships or become equity participants in these types of developments,” says McCormick. 

With the highly anticipated release of Christopher Nolan’s film “Oppenheimer” on July 21st and the ongoing concerns about potential nuclear reactor damage in Europe due to the Russian invasion of Ukraine, nuclear energy has emerged as a prominent topic. 

At the federal level, the NDP remain skeptical of nuclear energy, as does Green leader Elizabeth May and Liberal MP Jenica Atwin, who served as a Green before crossing the floor in 2021, despite her party’s support for the SMR Action Plan. 

Tim Sayle, the associate professor of history and director of the international relations program at the University of Toronto, says that during the early stages of the Cold War, there was great hope in the potential of nuclear power in energy production and propulsion. 

That changed, according to Sayle, in the 1970s and 1980s when discourse about nuclear weapons and nuclear energy became intertwined. The 1980s would see heightened tensions between the United States and the Soviet Union, as well as the reactor meltdown at the Chernobyl Nuclear Power Plant in 1986. 

“I think it was the fears of nuclear weapon use that generated the worries in the first place, but these soon came to be connected with general concern about nuclear power, and nuclear waste,” says Sayle. 

Sayle points out that fuel from nuclear reactors designed to produce power are capable of being used for nuclear weapons, and that Canada supplied India with a nuclear reactor for peaceful energy production that ended up being used to fuel India’s first nuclear detonation. Both Canada and the United States imposed nuclear trade restrictions on India as a result.

The cost of building nuclear reactors has also been a major deterrent to the growth of nuclear energy. In the United States, several planned reactor projects in the 1980s were cancelled after the costs ballooned threefold. In 2018, an article from Stanford University’s Earth Matters magazine stated that the clean-up from the Manhattan Project, the U.S. nuclear weapons program during WWII, costs taxpayers $6 billion per year, with a projected total cost of $300 billion.

Excluding the cost-effectiveness of handling spent nuclear energy, Katz-Rosene says the main criticisms of nuclear energy that he encounters include the environmental impacts of uranium mining, possible accidents such as meltdowns, large use of water for coolant, and security risks.  

While Katz-Rosene says the concerns of environmentalists should be listened to, he believes nuclear energy is held to a higher risk standard than other sources of energy. 

“All forms of energy, including renewables, pose various forms of social and environmental risks, and we’re never going to have a risk-free or problem-free energy system,” says Katz-Rosene. “I also think there’s a lot of amplification of nuclear risk when we see big headline disasters like Fukushima and current disaster risk at the Zaporizhzhia Nuclear Power Station in Ukraine.”