Pivot to CANDU at Darlington

Summary

The transcript discusses the evolution of nuclear reactor technology, focusing on small modular reactors (SMRs) and their limitations. It highlights how SMRs emerged post-Fukushima as a way to address safety concerns and demand uncertainties, but emphasizes the critical role of economies of scale in nuclear power. Larger reactors, like those planned by Bruce Power, offer significant advantages in terms of cost efficiency. The speaker critiques the over-reliance on modularity, asserting that larger reactors, built with advanced Canadian technology, are the future of nuclear energy, providing confidence in the industry’s growth and sustainability.

Takeaways

• 😀 The nuclear industry in Ontario is shifting towards large modular reactors (LMRs) rather than small modular reactors (SMRs) as they provide better economies of scale.
• 😀 SMRs were originally developed as a response to the Fukushima disaster, aiming to rebrand nuclear power by offering a more flexible and smaller-scale alternative.
• 😀 The initial rationale behind SMRs in the 2015 era was to address uncertainty about future demand and to provide a new solution without explicitly using the term 'nuclear.'
• 😀 Economies of scale are crucial in nuclear power generation because of the high upfront costs, such as licensing, regulation, civil works, and fuel.
• 😀 Large reactors offer a better financial outlook by reducing the per-unit cost of electricity, making them more feasible for power providers to pay off their significant debts and capital investments.
• 😀 Bruce Power is requesting a 1,000-megawatt reactor instead of a smaller 740-megawatt unit to generate additional revenue of around $200 million, highlighting the financial importance of scaling up.
• 😀 SMR hype has waned as the benefits of large-scale reactors, with their lower cost per megawatt, have become more apparent.
• 😀 Modularity, once touted as a key benefit of SMRs, is now being questioned, as larger reactors have been more successful in the nuclear industry due to their proven scalability and efficiency.
• 😀 Historically, nuclear reactor projects have followed a trajectory of scaling up from small to large reactors to meet grid demands and improve efficiency (e.g., from Douglas Point to Darlington in Ontario).
• 😀 The nuclear industry is confident in transitioning to larger Canadian-origin reactors with minimal first-of-a-kind risks, thanks to an experienced workforce and an established supply chain.
• 😀 The overall shift towards large modular reactors represents a pivot in nuclear power strategy, as new builds in Ontario at Wesleyville and Bruce C are planned to be large-scale reactors.

Q & A

What was the primary rationale behind the push for small modular reactors (SMRs) in the 2015 era?

The primary rationale for SMRs in 2015 was the need to rebrand nuclear energy following the Fukushima disaster. At that time, there was uncertainty about the demand for electricity from large nuclear plants, so SMRs were marketed as a solution, even though they faced challenges such as the lack of a clear customer base for their output.

Why are economies of scale particularly important in nuclear power generation?

Economies of scale are crucial in nuclear power generation because of the high fixed costs involved, such as licensing, regulation, civil works, engineering, and fuel. Building larger reactors spreads these costs out over more electricity output, making them more cost-effective compared to smaller units.

How does the size of a nuclear reactor impact revenue generation for companies like Bruce Power?

The size of a nuclear reactor directly impacts its revenue potential. For example, Bruce Power is seeking a 1,000-megawatt reactor instead of a smaller 740-megawatt version because the larger reactor would generate an additional $200 million in revenue, which is important for covering the substantial capital costs of nuclear power plants.

What are some of the inherent costs associated with nuclear power that make economies of scale important?

Inherent costs in nuclear power include licensing, regulation, civil works, engineering, and fuel. These costs remain relatively constant regardless of the size of the reactor, making larger reactors more cost-effective since they spread these costs over a larger electricity output.

What is the current trend in new nuclear power plant builds in Ontario?

The trend in Ontario is shifting towards larger modular reactors, as demonstrated by the planned large-scale reactors at sites like Wesleyville and Bruce C. This reflects a growing recognition that economies of scale are more viable with larger reactors than with smaller, modular ones.

How does modularity in nuclear reactors relate to economies of scale?

Modularity in nuclear reactors is sometimes seen as a way to bypass the economies of scale, but this assumption is flawed. While modular reactors may offer some benefits, such as reduced upfront costs, larger reactors remain more cost-efficient overall due to the significant fixed costs involved in nuclear power generation.

Can you provide an example of how nuclear reactors have scaled up over time?

Yes, nuclear reactors have consistently scaled up over time. For example, the Douglas Point reactor in Ontario started small, and over the years, reactors at Pickering, Bruce, and Darlington scaled up to 500, 850, and 900 megawatts, respectively. This scaling up demonstrates that if the grid can handle it, larger reactors are preferred for their economic advantages.

What is the significance of the transition from small US reactors to large Canadian-designed technology in Ontario's nuclear industry?

The transition from small U.S.-designed reactors to larger Canadian-designed reactors at sites like Darlington reflects a shift toward more cost-effective, large-scale nuclear power generation. This transition also highlights the strength of Canada's nuclear industry, which possesses the supply chain, workforce, and expertise to handle larger, more complex projects.

Why is the 'SMR hype train' considered to have run its course?

The 'SMR hype train' is considered to have run its course because the initial optimism about small modular reactors did not match the economic realities of nuclear power. As the industry has evolved, the focus has shifted back to large-scale reactors that benefit from economies of scale and are more financially viable in the long term.

How does the Canadian nuclear sector's experience contribute to the success of large reactor projects?

The Canadian nuclear sector's extensive experience with reactor construction, supply chain management, and integrated project delivery is a key factor in the success of large reactor projects. This expertise allows for lower first-of-a-kind risk and more efficient project execution, facilitating the shift toward larger reactors.