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New report


April 2024

A Big Deal

Leveraging investment in CANDU as Canada negotiates the future of its nuclear sector

In Brief

Few decisions have been as consequential for Canada's nuclear sector as the upcoming technology selection at Bruce C. To make the most of this generational opportunity, Canada must give itself the best position to negotiate with the foreign technology vendors it has invited to apply.

Executive Summary

Canada’s nationally important nuclear sector is at a crossroads. As electricity demand projections grow to record heights, 4,800 megawatts (MW) of new nuclear capacity is being considered at the Bruce Nuclear Generating Station. Breaking from past successful nuclear builds, the technology selection process at “Bruce C” is open to non-Canadian reactors.

Using competition to yield the best possible reactor is a wise choice. Concerningly, however, no Canadian technology is ready to build at the specs required, namely an economically advantageous 1,000+ MW capacity. To make sure the Bruce C technology selection works in Canada’s best interests, it is imperative that the federal government support engineering and design work on the large-scale “CANDU Monark,” thereby letting Canadian technology compete for the site.

With construction-readiness being a key criterion for the Bruce C decision, an unfinished CANDU Monark design limits the ability of a Canadian technology to drive serious competition around the three major pillars of Canada’s continued strength in nuclear, namely:

  1. Supply chain localization

  2. IP ownership and export sovereignty

  3. Social and political licence

Supply chain localization. Since the very first reactor, CANDU technology has given Canadian suppliers a natural high ground, assuring opportunity wherever work is to be done. The same is yet to be true for other types of reactors. Not only do other countries have existing supplier networks, but nuclear exports are sources of much-sought-after economic opportunity. As a result, ensuring maximal involvement by Canadian businesses and workers on imported nuclear technology could be a challenge that Ontario has rarely faced—and one that would take a strong negotiating position to solve.

IP ownership and export sovereignty. Complete ownership of CANDU lets Canadian engineers and scientists improve upon the technology without restriction and keep the fruits of R&D spending. Just as importantly, it gives Canada the ability to export its technology, which has sustained the sector as reactor sales in its relatively small domestic market paused. To prevent the eventual decline of the sector, Canada must secure its involvement in future exports of whatever reactor is chosen for Bruce C. Technology transfer and other guarantees are essential, since if CANDU isn’t chosen, it will effectively end future export opportunities for CANDU.

Social and political licence. Long-duration, financially weighty projects like nuclear construction are sensitive to interference from any number of stakeholders. CANDU, however, has enjoyed cross-party social and political licence as a flagship achievement of high technology, a driver of world-renowned scientific and industrial research, and an intergenerational job-creator for 76,000 Canadians. The crucial task of garnering similar public support for a foreign technology could prove challenging, making strong guarantees for supply chain localization and technology transfer all the more important.

To keep these pillars amid a competitive technology selection, the CANDU Monark, the new 1,000 MW CANDU reactor announced by AtkinsRéalis, must be able offer a compelling bid for Bruce C. This would unlock the option of building Canadian technology while providing two other key benefits: 1) raising the bar for competition among all reactors along the lines of supply chain localization and IP ownership; and 2) strengthening Canada’s negotiating position to secure these essential guarantees with foreign vendors — creating the option to go with high-quality Canadian tech if other offers fall short.

To be competitive, the CANDU Monark must first have a finished design. This will take the help of the federal government to develop a funding pathway for engineering and design work. We expect this work to cost a total of between $300 million and $600 million, with AtkinsRéalis asking the federal government to put up half of that cost.

There is firm precedent for government support of reactor technologies. The United States, for example, funded the Westinghouse AP1000 design in the mid-2000s to the tune of $450 million in today’s equivalent Canadian dollars. Moreover, the CANDU IP is a government-owned asset that is merely privately licensed. The investment, modest in comparison to subsidies for clean energy and innovation, would preserve and enable new returns on significant past R&D investment in CANDU.

Beyond getting the CANDU Monark ready for a competitive bid, the federal and provincial governments should take the role of making sure that supply chain localization, technology transfer, export involvement, and other strategic factors are properly valued as competitive criteria. One way to achieve this could be to vary the level of risk-sharing offered on the project based on these criteria, possibly benchmarked to the CANDU Monark.

With the 2024 Federal Budget coming up and the Bruce C decision approaching, the time to act now.

Read the full report

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