Amid growing global energy challenges, nuclear power is making a comeback.
Canada's next-generation nuclear ambitions have gone from casual conversation to funding commitment in only four years.
Natural Resources Canada announced funding of roughly $710 million for a new project from Ontario Power Generation. The small modular reactor (SMR) technology could be supplying electricity to the grid by 2030, which could be a first among G7 nations. China has already begun construction of a SMR.
The funding marks swift progress for Canada, one of the world's largest producers and exporters of uranium, which first brought together stakeholders in 2018 to explore next-generation nuclear. It's just the latest sign of a global nuclear renaissance.
Going Small is the Next Big Thing in Nuclear
Nuclear power has become the ugly duckling of clean energy. Existing nuclear power plants are massive, capable of generating enough electricity for entire cities. They provide large amounts of zero-carbon energy and only require disruptive maintenance once every 18 months or so, which stabilizes local and regional grids.
However, those advantages have some drawbacks. Existing nuclear power plants cannot turn on or off rapidly. That can result in uneconomical generation in regions with high renewable energy penetration. There's also the question of long-term storage of spent fuels and wastes, and the potential consequences should something go wrong. The odds of a disaster are exceedingly low, but the magnitude of the consequences is severe.
Next-generation nuclear seeks to address many of these drawbacks.
- Size and cost: SMRs can be one-tenth the size of a traditional nuclear reactor. That could allow them to be manufactured in a factory, shipped to the plant site, then assembled and connected to the grid quickly. This could shorten construction times and reduce construction costs.
- Safety: SMRs often utilize different designs than traditional nuclear reactors. Many have passive safety mechanisms, which use thermodynamics to shutoff power and close the reactor even if the facility loses power.
- Flexibility: Several SMR designs can be turned on and off within minutes or hours. That could allow them to complement grids of the future that have high renewable energy penetration.
Ontario Power Generation is utilizing an SMR designed by GE Hitachi Nuclear Energy, a joint venture between General Electric (GE) and Hitachi, called the BWRX-300. The advanced reactor is water-cooled, which differs from other next-generation designs that seek to utilize sodium salts for heat transfer.
However, it still introduces new passive safety mechanisms and can leverage existing supply chains for traditional reactors. A BWRX-300 could be constructed in less than 36 months, reduce a power plant's footprint by 90%, and require 50% less concrete. These design decisions are expected to simplify regulation, capital and operating costs, maintenance, and time to market.
Indeed, leveraging traditional technologies and supply chains is what made it possible for Ontario Power Generation to proceed with BWRX-300 so quickly. If site preparation and construction go according to plan, then the SMR could be operating by 2028. That's only 10 years after Canada first proposed a next-generation nuclear industry within its borders.
An Emerging Investment Opportunity
It may still be too early to invest in advanced nuclear, but investors should at least keep an eye on the emerging opportunity.
General Electric's plan to spin off its power generation business in early 2024 could allow investors to own one of the pre-eminent next-generation nuclear companies – with a healthy dose of renewable energy technologies to boot. In addition to the BWRX-300, GE Hitachi has helped to design the small modular Natrium reactor from TerraPower.
Meanwhile, NuScale Power Corporation (SMR) recently debuted on public markets. The company's VOYGR power plants would utilize SMRs with a capacity of only 77 megawatts. It utilizes traditional uranium fuels, which could help accelerate the time to market.
Although exciting, investors also need to remember the first advanced nuclear reactors are at least six years away from operations. The industry may not begin deploying meaningful numbers of SMRs until the early 2030s. Commitments to the technology could generate significant business before then, but it's important to keep expectations in check.
