This story is part of an ongoing Forum on Energy series on nuclear energy in emerging markets across the globe. See more entries here.
Canada has been a global leader in nuclear energy research and development for more than 50 years. But shrinking federal support for R&D, as well as public concern over nuclear safety, have halted new construction and development for the last two decades. Canada’s nuclear reactor fleet, which is now approaching retirement age, looks likely to be replaced by low-cost fossil fuels.
Canada’s Nuclear Industry and Electricity Sector
In 1942, the National Resource Council of Canada (NRC) set up a joint British-Canadian laboratory, the Montreal Laboratory, to design the world’s first heavy-water nuclear reactor. Soon after, the NRC’s Chalk River Laboratories successfully operated the first nuclear reactor outside of the United States in 1945. By 1971, the first commercial CANDU (Canada Deuterium Uranium) reactor came online in Pickering, Ontario. Today there are 31 operating CANDU reactors in seven countries, as well as 13 “CANDU derivative” reactors in India.
Following the success of the Chalk Laboratories, the Canadian government formed a Crown corporation, Atomic Energy of Canada Limited (AECL), to design, develop and deploy peaceful uses of nuclear energy. The NRC oversees nuclear power R&D through AECL and controls nuclear regulation through the Canadian Nuclear Safety Commission (CNSC). Today, the Canadian nuclear industry is comprised of a mixture of private companies and public entities (both federal and provincial). There are currently more than 150 companies that provide products and services to AECL and the public utilities.
AECL has led all past construction of reactors in Canada. As of 2013, 17 CANDU reactors are operating commercially, two have been shut down and three are being refurbished. Additionally, Canada has exported 12 CANDU units around the world, along with the engineering and servicing expertise to operate them in South Korea (4 reactors), Romania (2), India (2), Pakistan (1), Argentina (1) and China (2).
Today, about 15 percent of Canada’s total electricity comes from nuclear power, with nuclear reactors providing 13.5 GWe of power capacity. In 2013, Canada generated 652 billion kWh, of which 102.8 billion kWh (15.8 percent) was from nuclear power, 391.5 billion kWh (60 percent) from hydro, 63 billion kWh from coal and 67 billion kWh from gas. Net exports in 2013 were 52 billion kWh, and all went to the United States. Canada’s nuclear industry also supplies the majority of the world’s supply of radioisotopes used in medical diagnosis, sterilization and cancer treatment.
Canada is a member country of the two foremost international organizations that deal with the peaceful use of nuclear power: the Nuclear Energy Agency (NEA) and the International Atomic Energy Agency (IAEA). Canada is also a member of the Generation IV International Forum (GIF) and International Framework for Nuclear Energy Cooperation (IFNEC).
Canada’s first nuclear power plant, Nuclear Power Demonstration (NPD), was the result of a public-private partnership between AECL, Ontario Hydro and Canadian General Electric. NPD’s 20 MWe reactor began operation in 1962, successfully employing the indigenous concepts of the CANDU reactor (including on-power re-fuelling using natural uranium, and heavy water as moderator and coolant). Starting in 1966, AECL led the construction of 22 CANDU reactors in Ontario (20 reactors), Quebec (one in Gentilly), and New Brunswick (one in Point Lepreau).
By 2008, 53 percent of Ontario’s electricity production came from nuclear power. In the wake of the 2008 financial crisis, Ontario’s power demand decreased by about 25 TWh annually (primarily due to industry cuts), and has remained flat ever since. Following the shutdown of the Nanticoke coal-fired power station in 2014, Ontario’s electricity supply is composed almost entirely from hydro and nuclear.
In 2011, AECL sold its reactor division to SNC-Lavalin’s Candu Energy subsidiary for C$15 million. The sale was intended to reduce taxpayers’ exposure to the commercial risks nuclear, and the Canadian government retained intellectual property rights for the CANDU reactors with the hopes of receiving future royalties. Candu Energy assumed all business opportunities pertaining to the servicing of existing CANDU reactors worldwide, as well as the development of newer reactor models (the EC6 and ACR). The Canadian government continues to contribute $75 million to EC6 development, and has subcontracted Candu Energy to complete the refurbishment of three reactors (located at Bruce, Point Lepreau and Wolsong).
Future of Nuclear in Canada: New Builds and Refurbishments
Canada’s nuclear reactors are approaching the end of their operating lives in a market that is characterized by low cost fossil fuels and post-Fukushima safety concerns. The Canadian nuclear industry is facing a shift away from nuclear power as political and public support for nuclear begins to wane. The last two decades have been characterized by reduced R&D funding, an absence of new builds, and the deferrals of various refurbishment projects. Recent moratoria on uranium mining in Quebec, Nova Scotia and British Columbia reflect the political shift away from nuclear power, as does the privatization of the AECL’s reactor business.
The ultimate decision to invest in nuclear power rests with the Canadian provinces. The individual provinces will decide with their provincial energy organizations and power utilities, whether or not new nuclear power plants will be built and/or refurbished. Currently, there are three refurbishment projects underway in Ontario, New Brunswick and Quebec. Although new build projects have been under consideration by both public and private companies recently, there have been no firm commitments to build new nuclear reactors. Commitments to new builds going forward will likely hinge on future electricity demand, economics and refurbishment plans.
According to the Canadian government, the use of nuclear power in Canada as a substitute for coal-fired electricity generation avoids about 90 megatons of greenhouse gases per year. According to the Canadian Energy Research Institute, nuclear reactors contribute C$6.6 billion per year to Canadian GDP, C$1.5 billion in government revenue and $1.2 billion in exports. Furthermore, the nuclear power industry employs 21,000 directly, 10,000 as contractors and another 40,000 indirectly.
- Ontario — Ontario’s 2006 energy plan projected 14,000 MWe of nuclear capacity in 2030. In 2010, this projection was revised downward, from 14,000 MWe to 12,000 MWe of nuclear capacity. In 2013 plan updates, even lower demand forecasts led to the deferral of all new reactor constructions and refurbishments. According to World Nuclear Association, “nuclear power remains central in the Ontario plan to phase out all coal-fired generation in 2014, and is expected to contribute 42% of electricity in 2025.”
- Alberta — In Alberta, interest in building nuclear reactors is linked with the province’s extensive oil sands resources. Currently, natural gas provides the energy necessary to extract oil. The energy produced by natural gas is costly in terms of fuel and in terms of the extra carbon emissions it produces. Nuclear power generation provides and economical, low emission alternative for generating the energy necessary for oil extraction.
The Canadian nuclear sector is well-positioned to take advantage of export opportunities around the world, but the sector has experienced stagnation in recent years due to slowing domestic energy demand and technological developments. A major challenge that AECL and Candu Energy face abroad is that the CANDU and ACR reactors are heavy-water designs, while most of the world’s reactors are a light-water design. Light-water reactors dominate the international market because they were the first on the market and have lower upfront costs. Countries that are already operating CANDU reactors are more likely to purchase more reactors from Canada than countries currently operating light-water reactors. This is because it is costly to add a CANDU to an existing plant of light-water reactors. As Canadian innovation slows, the CANDU and ACR reactor technology face increasing competition with foreign firms abroad and at home.