Small Modular Reactors: A Key Component to a Low Carbon Future?

March 29, 2022

Written By David Macaulay, Luke Morrison, Sharon Singh and Dayo Ogunyemi

Energy innovation and transformation is front and centre at all levels of government and industry as society collectively tackles climate issues. Interest in the development and deployment of Small Modular Reactors (SMRs) continues to gain traction due to their size, design and the potential to help reduce greenhouse gas emissions. SMRs are nuclear fission reactors that can produce significant amounts of low-carbon electricity despite being considerably smaller in scope and footprint than conventional nuclear reactors.

The following is a look at what's new in Canada in SMRs, opportunities for Canadian companies and communities, and challenges for SMR development.

What's New in Canada in SMRs

Four-Province SMR Strategic Plan Released

Under the Strategic Plan for the Deployment of Small Modular Reactors released on March 28, 2022, Alberta, Ontario, Saskatchewan and New Brunswick have agreed to collaborate on the advancement of SMRs as a clean energy option to address climate change and regional energy demands. The plan identifies five key priority areas for SMR development and deployment—technological readiness, regulatory framework, federal government commitments, Indigenous and public engagement, and nuclear waste management. The provinces will assess these areas as they decide whether or not to move forward with SMR projects.

One of the underlying themes of the SMR Strategic Plan is positioning Canada as a world-leader in nuclear innovation and SMR technology, which is to be accomplished through three proposed project streams:

1. on-grid SMR deployment in Ontario and Saskatchewan (including a grid-scale SMR project of 300 MW to be constructed at the Darlington site in Ontario by 2028);
2. on-grid SMR deployment in New Brunswick (which proposes developments at Point Lepreau Nuclear Generating Station site to be fully operational by the early 2030s); and
3. a new class of micro-SMRs designed primarily to replace diesel use in industrial, remote community and other commercial applications (existing projects targeting mid-2020s for first deployment in Canada).

The SMR Strategic Plan follows on work commenced by Ontario, Saskatchewan and New Brunswick under a SMR Memorandum of Understanding (MOU) signed in December 2019. Alberta signed on to such MOU in April 2021, which we covered in our previous insight, Going Nuclear: Alberta Signs Inter-Provincial MOE to Explore Small Modular Reactors.

Federal SMR Action Plan

In December 2020 the federal government launched Canada's SMR Action Plan for the development, demonstration and deployment of SMRs for multiple applications at home and abroad. The plan builds on the Canadian Small Modular Reactor Roadmap, which was released in 2018, and includes input from a wide array of stakeholders including governments, Indigenous communities, utilities, industry, and academia. The SMR Action Plan outlines a variety of principles and goals, which include:

• promoting cross-jurisdictional cooperation on SMRs to enable first units to achieve operation by the late 2020s;
• leveraging Canada’s extensive capabilities in academia, research, engineering and manufacturing in the deployment and export of SMRs; and
• seeking out opportunities to integrate SMRs with other clean energy sources, storage technologies and applications to accelerate Canada’s low-carbon future.

SMR Opportunities for Canadian Companies and Communities

SMRs offer numerous benefits and opportunities, a few of which are highlighted below.

1. Electricity Generation: Unlike conventional nuclear reactors, SMRs are small in both physical size and footprint, while still being able to produce sufficient power to support industrial applications or remote communities with limited grid capacity. SMRs are typically factory-built, portable/modular, scalable and can be transported as a unit to any site for assembly by truck, rail, or ship.
2. Heat Source: SMRs can be used to create heat for industrial purposes. The heat generated from SMRs can be used for district heating, heating homes, commercial buildings, and greenhouses; process heat for bitumen extraction; and steam supply for a wide variety of industrial uses, all of which have potential broad applications and implications for Alberta's economy (including in relation to leveraging uranium deposits within the Athabasca Basin as raw materials for SMRs).
3. Support for Hybrid Energy Systems/Decarbonization: SMRs can play a critical role in supporting Canadian emissions reduction goals. Multiple proponents are looking at ways to integrate SMRs into hydrogen production (which may in turn be utilized by the electricity and transportation sectors for energy storage or as a fuel source for long haul transportation).
4. Economic Partnerships for and With Indigenous Communities: The four-province SMR Strategic Plan states that SMR project proposals in Alberta, Ontario, Saskatchewan and New Brunswick will need to consider opportunities for, and we suggest opportunities to allow, Indigenous communities to participate in their development. This includes areas such as equity investments, employment, skills development and supplier arrangements.

Challenges for SMR Development

Despite opportunities and comparative advantages, the development and implementation of SMRs continues to face challenges and obstacles, such as:

1. Regulatory Uncertainty/Need for Policy Reform: While the International Energy Agency's (IEA) Canada 2022 Energy Policy Review welcomes SMR developments in Canada, it highlights that federal government support for ongoing SMR projects under discussion at the provincial level is critically required, and further that policy reform at both the federal and provincial levels will be required to allow for licensing and construction of demonstration projects. Such support and policy readiness is recognized as a key challenge in both the SMR Strategic Plan and the federal SMR Action Plan. Given the significant expertise the Canadian Nuclear Safety Commission brings to the policy and regulatory framework for all reactor facilities, there should be a pathway to ensure that the current licensing requirements can be appropriately tailored using a risk-informed approach to facilitate an efficient and effective regulatory process for SMR development.
2. Waste Management: While the regulatory framework for radioactive waste in Canada is well-established (management of waste is a component of Canadian Nuclear Safety Commission licensing), SMR proponents and governments recognize the need to engage in a dialogue to provide information regarding fuel waste from new or emerging reactor technologies, and to engage with multiple stakeholder groups to demonstrate how a proposed SMR project will meet waste storage and handling requirements and international standards.
3. Capital Costs: While several analyses have shown that SMR capital costs per unit of power are comparatively lower than costs for large nuclear reactors or other sources of electricity such as diesel, proposed SMR projects face cost certainty issues in relation to matters such as fuel source scarcity and reliability, logistical and transportation costs (both for fuel and for the modular SMR units) and limitations regarding spent fuel storage.

*The authors wish to thank and acknowledge Sean Wagner at Alberta Nuclear Nucleus for his contributions to this article.

To discuss the development, opportunities and challenges of SMRs in Canada, please contact David Macaulay, Luke Morrison, Sharon Singh or Dayo Ogunyemi.

Authors