Nuclear Renaissance – Don’t Count Out Nuclear Yet

Recently, there has been an increase in commentaries suggesting that the North American “Nuclear Renaissance” is on life support, which, if true, will have made it a very short renaissance period indeed. The latest pronouncement came from The Economist that pointed out in this article that of 18 applications received by the U.S. Nuclear Regulatory Commission since 2007 for 24 new build nuclear reactors, only two applications have been approved. This is in stark contrast to the nine that have since been withdrawn or are stalled and the seven that continue to be under the NRC’s intense scrutiny process. The primary reason cited for the industry’s deathwatch is the low price of natural gas. Shale gas discoveries, which appear to be a game changer in a number of areas of the North American economy, hold the promise of inexpensive and relatively clean thermal generation fuel supply for generations to come.

It would be hasty to write nuclear’s obituary in Canada, however. Despite the Province of Québec’s announcement in September that Gentilly-2 nuclear facility will be decommissioned, nuclear is expected to enjoy a long and healthy life in Ontario. The Province’s 2010 Long-Term Energy Plan (LTEP) continues to call for 50% of the Province’s installed capacity, or 12,000 megawatts, to come from nuclear. Bruce Power reclaimed its bragging rights to running the largest operational nuclear facility in the world by finishing the refurbishment of Units 1 and 2 of the Bruce Nuclear Generation Station A last year. By so doing, it reached the 1,540 megawatt milestone in the 10,000 megawatt nuclear refurbishment requirement called for in the LTEP. Ontario Power Generation also continues to do its part by announcing that it received its environmental assessment approval from the Canadian Nuclear Safety Commission this past March related to the anticipated refurbishment of 3,500 megawatts of capacity at the Darlington Nuclear Generation Station.

While the question of new-build nuclear in Canada remains less certain, there are several matters for industry watchers to keep on their radar screens to predict whether the called-for 2,000 megawatts of new-build will become a reality. First, OPG is expecting to receive at the end of June two cost estimates it commissioned in June 2012 for new reactors from Candu Energy and Westinghouse. Second, the Federal Ministry of Natural Resources announced on June 10, 2013 that it will table legislation increasing liability limits for Canada’s nuclear industry in the fall of 2013. While on its face, this may look like another body blow to nuclear, the industry has long recognized that an update to the almost 40 year old Nuclear Liability Act is necessary. The expectation is that new legislation in the form introduced in Parliament several times previously will provide greater certainty to nuclear operators and their stakeholders, including the public. Third, the provincial Ministry of Energy announced the commencement of its triennial LTEP review. Minister Bob Chiarelli has already indicated that he does not anticipate “major changes” in the Province’s view of nuclear in its supply mix. Despite such reassurances, all segments of the generation industry have the right to be nervous. Nuclear in particular saw its share of the capacity pie be reduced 14% from the 14,000 megawatts allocated to it in the 2006 supply-mix directive. However, for purposes of planning power capacity in the province for the next forty years it would seem prudent not to substantially diminish nuclear’s role on the hopes of a perpetual $2.00 MMBtu gas price.

Bob Chiarelli Bruce Nuclear Generation Station A Bruce Power Canadian Nuclear Safety Commission Candu Energy Darlington Nuclear Generation Station Federal Ministry of Natural Resources Gentilly-2 Long-Term Energy Plan natural gas NRC Nuclear Liability Act Nuclear Renaissance Ontario Power Generation OPG shale U.S. Nuclear Regulatory Commission Westinghouse



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