Small modular reactors (SMRs) continue to attract substantial interest in Canada from provincial governments and the federal government as a key strategy to allow Canada to meet its ambitious climate change goals. SMRs are scalable nuclear reactors that typically produce 300 megawatts of electricity (MWe) or less — much smaller than conventional reactors — and can support large established grids, small grids, remote off-grid communities and resource projects. They are touted for their potential to provide safe, affordable and reliable energy sources while reducing emissions, decarbonizing heavy industry and spurring economic development.
As a Tier 1 nuclear nation, Canada is uniquely positioned to become a global leader in SMR technology. In this post, we highlight recent provincial and federal government-led initiatives to pursue the deployment of SMRs across Canada which will be of interest to those looking for opportunities to develop or invest in SMR projects or to provide the specialized commodities, goods and services needed for SMR projects.
Four-province SMR Strategic Plan
On March 28, 2022, the governments of Ontario, Alberta, Saskatchewan and New Brunswick announced a joint strategic plan outlining the path forward for the advancement of SMRs. The Strategic Plan for the Deployment of Small Modular Reactors (Strategic Plan) is the final deliverable from the provinces under the inter-provincial SMR Memorandum of Understanding (MOU) established by Ontario, New Brunswick and Saskatchewan in December 2019, and later joined by Alberta in April 2021. The Strategic Plan builds on the SMR Feasibility Study [PDF] released by Ontario Power Generation (OPG), Bruce Power, New Brunswick Power and SaskPower on April 14, 2021, as the provinces had requested as part of the MOU. The SMR Feasibility Study concluded that SMRs could be deployed in certain ways that would be both commercially and technically feasible, and that their development could support domestic energy needs, help curb greenhouse gas emissions and position Canada as a global leader in clean energy technologies.
The Strategic Plan identifies five priority areas for SMR development and deployment:
- Technology readiness: Canada can establish itself as a world leader in the export of global SMR technology by propelling three separate streams of SMR development which were assessed in the SMR Feasibility Study and determined to be commercially and technically feasible, covering both on-grid and off-grid applications:
- Stream 1 – a grid-scale SMR project of 300 MWe to be constructed at the Darlington site in Ontario by 2028, followed by up to four subsequent units in Saskatchewan between 2034 and 2042. OPG selected GE Hitachi Nuclear Energy to deploy an SMR at the Darlington new nuclear site, which is currently the only site in Canada licensed for a new nuclear project. SaskPower has used OPG's analysis as the foundation for conducting its own SMR vendor assessment.
- Stream 2 – two advanced SMR technologies being developed in New Brunswick for deployment at the Point Lepreau Nuclear Generating Station site to be operational by early 2030s, with subsequent potential deployment in other regions of Canada and abroad.
- Stream 3 – a new class of micro-SMRs designed primarily to replace diesel use in remote communities and mines, with a target of mid-2020s for first deployment of a 5-MWe gas-cooled demonstration project proposed for Chalk River, Ontario, to be in service by 2026.
- Regulatory framework: Canada needs to promote a strong nuclear regulatory framework that focuses on the health and safety of the public and the environment while ensuring reasonable costs and timelines for approval of SMRs. Canada’s existing regulatory framework is already capable of accommodating SMRs. This framework includes the licensing and oversight of nuclear power reactors by the Canadian Nuclear Safety Commission (CNSC), pursuant to the Nuclear Safety and Control Act and regulations under that Act, from site preparation and construction to operation and decommissioning. It also covers the management and disposal of nuclear waste and federal impact assessments required for SMRs with generation capacity over prescribed thresholds pursuant to the Impact Assessment Act (IAA). This is in addition to other permits, licences and approvals SMRs may require in relation to things such as water use, works on navigable waters, fish and fish habitat, migratory birds, species at risk, non-radioactive waste management and disposal, and roads and other associated infrastructure. The Strategic Plan recognizes that SMR projects are smaller and less complex than existing nuclear projects, therefore necessitating a more streamlined regulatory and licensing framework commensurate with the applicable safety and environmental risks. The CNSC has already established an optional pre-licensing assessment process, referred to as “vendor design review,” which allows prospective project developers to submit project designs to the CNSC for feedback that can assist in developing a formal license application and result in a more efficient and effective licencing process.
- Economics and financing: Significant upfront financial investments are required for SMRs due to the high cost of developing and deploying these new technologies. Federal and provincial governments will play a key role in sharing the financial risk to lay the foundation for SMR development, and the MOU signatory provinces are looking for assurances that the federal government will provide financial support for the SMR project proposals as outlined in the Strategic Plan. Significant federal investment and financial risk-sharing is required to support SMR technologies that would produce economic benefits across Canada (including increased uranium demand) and help meet national emissions reduction targets.
- Nuclear waste management: The MOU signatory provinces will work with the federal government and nuclear operators on a new policy framework and integrated strategy for waste management that supports the deployment of SMRs. Canada already has a Radioactive Waste Policy Framework that provides the overall principles for radioactive waste management, supported by three primary pieces of legislation which include the Nuclear Safety and Control Act and the Nuclear Fuel Waste Act, in addition to the IAA. However, the federal government is currently in the process of modernizing its policy for radioactive waste management and developing a new Integrated Strategy for Radioactive Waste from existing reactors and future waste streams from new technologies.
- Indigenous and public engagement: The Strategic Plan identifies the vital role that Indigenous and public engagement will have in SMR development and deployment, and calls for opportunities for Indigenous community participation in SMR projects.
Federal support for SMRs
The Strategic Plan emphasizes that cooperation between the provinces and the federal government will be key to advancing SMR development and deployment. Both financial and policy supports are needed from the federal government to capitalize on opportunities for SMRs across Canada. This includes the financing needed to support the three streams of SMR development assessed in the SMR Feasibility Study.
In principle, the Strategic Plan aligns with the federal government’s support for SMR development. In 2018, Natural Resources Canada (NRCan) led the preparation of A Call to Action: A Canadian Roadmap for Small Modular Reactors [PDF], which made several recommendations for advancing SMR projects within Canada and called for the development and implementation of an SMR Action Plan. On December 18, 2020, the federal government launched the SMR Action Plan, which responds to the recommendations identified in Canada’s SMR Roadmap and identifies actions to be taken by the federal government to ensure robust policy, regulatory and legislative frameworks are in place, accelerate innovation, continue Indigenous and public engagement, develop international partnerships and open up new markets. The federal government has also recognized SMRs as an important prospect for emission reductions and clean energy transition in its 2020 climate plan (A Healthy Environment and a Healthy Economy) and its recently released 2030 Emissions Reduction Plan.
The federal government reaffirmed its commitment to SMRs most recently in its 2022 budget plan tabled by the Minister of Finance on April 7, 2022. The budget allocates approximately $70 million for NRCan to undertake research to minimize waste generated from SMRs, support the creation of a fuel supply chain, strengthen international nuclear cooperation agreements and enhance domestic safety and security policies and practices. The budget also allocates an additional $50.7 million to expand the capacity of the CNSC to regulate SMRs and work with international partners on global regulatory harmonization.
Next steps provided in Strategic Plan
The Strategic Plan sets out actions required to enable the MOU signatory provinces to decide on whether to move forward with specific SMR projects. These actions include that project proposals be advanced to complete detailed design, refine project costs and schedule estimates, confirm economic opportunities, engage with the federal government for funding and other supports, and advance public and Indigenous engagement. Each province will consider the risks and benefits of individual SMR project proposals and will require projects to demonstrate certain benefits, including for electricity systems and ratepayers, emissions reductions, enhanced economic activity, potential for Indigenous partnerships, potential for innovation and research, global export of SMRs and exports of carbon-free electricity to nearby markets.
The Strategic Plan recognizes that, in Alberta, the private sector will need to pursue SMR projects either for electricity generation or industrial application. The deployment of SMRs in Alberta will, therefore, ultimately be driven by the private sector. Opportunities for SMR deployment in the Alberta oil sands is already receiving early interest from players like TC Energy, as well as the Oil Sands Pathways to Net Zero alliance of Canada’s largest oilsands companies, as a key emissions reduction strategy for the 2030s timeframe as the SMR technology is “proven up.”
The Strategic Plan acknowledges that, after deciding to proceed with specific SMR projects, the governments of Ontario, Saskatchewan and New Brunswick will need to ensure policy and regulatory frameworks are in place to support cost recovery, project oversight and the facilitation of the nuclear supply chain. In Alberta, the initial focus will be on establishing clear regulatory frameworks and policies, including delineation between federal and provincial regulatory responsibility where a federally regulated SMR will be part of an otherwise provincially regulated facility.
More research, regulatory and policy development, government funding and advancement of project-specific plans are needed to continue progressing the development and deployment of SMRs across Canada. Companies and organizations interested in SMR opportunities in Canada can expect action in these areas with the strong commitment from the governments of Ontario, Saskatchewan, New Brunswick and Alberta, as well as from the federal government, to undertake this work to establish a burgeoning industry. Given this commitment to continued collaborative efforts by these governments, it is expected that the SMR projects currently progressing in Ontario and New Brunswick will give rise to broader SMR deployment across the country, driven by the actions set out in the Strategic Plan to facilitate opportunities in this emerging technology.