IPPSO FACTO recently posed a number of questions to Denise Carpenter, exploring the opportunities and challenges facing the nuclear industry and how the Canadian Nuclear Association is responding. Her full answers are included below.
What do you see as the major challenges facing the nuclear industry in Canada and particularly in Ontario, in the coming business cycle?
As an advocacy organization the Canadian Nuclear Association wants to continue working on public acceptance of nuclear power as the affordable clean air energy. That acceptance remains quite high in Ontario, where people know we provide almost 60 percent of their power. We’d like to see it get stronger in some of the other provinces, and our industry is working on that.
A challenge some people point to is that the trajectory for resumed economic growth is so uncertain, and that deepens the uncertainty around the trajectory for power demand. But there’s a counterargument, which is that forecasting is only reliable a year or two out, and that’s not helpful for energy infrastructure decisions if they’re on a much longer time frame, often more than a decade to decide, approve, design and build. That’s why Ontario has a Long Term Energy Plan. At some point it’s necessary to build infrastructure for the future even when you can’t see the future perfectly.
Where do you see opportunities for growth in nuclear power, both new build and refurb in Canada?
Globally there are huge opportunities, particularly in Asia. Rapidly industrializing countries demand affordable, reliable low-carbon energy in large quantities. Canadian nuclear technology is known and is viewed favorably in some key markets like India, China and Korea, all of whom are using our reactor designs today.
Within Canada, there are opportunities in all the provinces that currently use nuclear power – Ontario and perhaps New Brunswick (eventually) for new build, Ontario and Quebec for refurbishments. In addition, there’s a very good opportunity for Saskatchewan to own the full cycle of nuclear technology. That province already has a world-competitive uranium mining industry, and they are investing in nuclear science and technology, which includes medicine, materials science, and crop science. If Saskatchewan were to decide to acquire power plant technology, it would make them a new powerhouse in nuclear.
Then there are newer technologies and applications for nuclear energy – remote communities, the mining industry, the oil sands, and other energy users. Small modular reactor designs are in the regulatory process now, so they are coming onto the menu of options for industry. Canada, with its cold climate, resource extraction industries, and high energy needs, offers many opportunities for applying these technologies.
The industry has seen a lot of change. Could you give us an overview of what you believe the industry has learned and the kind of continuous improvement processes that have emerged?
We’re applying a lot of lessons about project management on very sophisticated, engineering-intensive capital projects. We were always good at the engineering part; now we’re learning to be just as good on project management. One of our core strengths is our habit of sharing knowledge throughout our industry, through forums like the Canadian Nuclear Utilities Executive Forum (CNUEF), the CANDU Owners Group (COG), the World Association of Nuclear Operators (WANO) and others. With everything we’ve been learning from the refurbishment experiences at Bruce and Point Lepreau, this knowledge-sharing is going beyond engineering and into project management.
Many of the cost problems that affected nuclear projects in the past were exogenously driven, like regulatory changes and political stalling and interest rate jumps. They are not intrinsic to nuclear technology. That was demonstrated with the last CANDU refurbishment at Wolsong in Korea, which restarted successfully in mid-2011. There will be continued emphasis going forward on being on time and on budget.
As for the technology, the nuclear facilities that are installed and in use today have a great performance and safety record, but for the most part they do not reflect the latest designs or technologies. There is a nomenclature for classifying reactor designs that originated in the U.S. Department of Energy. Generations III and III+, which is what are being built now, have been all about further enhancing safety, particularly through passive safety measures. These will even further remove the vulnerabilities to very extreme events of the kind we saw at Fukushima.
Generation IV reactor designs, which are expected to be commercially available in about twenty years, will continue to get safer and safer, but they will also incorporate advances in two other areas: Simpler, more modular construction (which will further add to affordability), and new fuel cycles. Waste isn’t necessarily waste, it’s a resource. We’ll be able to get far more energy out of the fuel, and we’ll be able to make misuse far more difficult. And safety will continue to advance too.
From the perspective of the ordinary Canadian consumer, what advantages do you see for looking at nuclear in the long term?
It’s the affordable clean air energy. It’s clear that Canadians want low emissions, but they don’t want to pay too much to get there. From the ordinary consumer’s point of view, once you get an appreciation of the full benefits, nuclear becomes an obvious fuel of choice for base load power, even with the disposal and decommissioning costs rolled in (as they are in Ontario). A large number of Ontarians understand that. So do many people in other provinces.
From the perspective of government policy makers, what do you think the crucial considerations are?
For the people who manage the system and who make the policies, nuclear is the affordable clean air energy, from a technology that’s grown up here in Canada, one in which we have expertise and that has been proven for fifty years now. The price per kilowatt hour is not going mostly into fossil fuel that came from somewhere else; the fuel cost of nuclear is very low, and much more of the price per kilowatt hour is going into skilled jobs, science and technology and engineering performed right here. And that helps to explain why nuclear is supplying almost 60 percent of the power in Ontario today.
We know that nuclear has relatively low operating costs. How is it being seen as contributing to long term energy affordability?
The cost of initial plant construction is often criticized by opponents of nuclear, even though most of the overruns we’ve seen are not caused by the technology at all – they are related to exogenous political, regulatory, and financing issues.
The critics muddle the initial capital cost with the long-run unit cost. They argue that because the plant is expensive to build, nuclear is expensive electricity. In effect this is like saying, “A house costs hundreds of thousands of dollars, while a hotel suite is only a couple of hundred dollars, so living in a house is the more expensive option.” Obviously this is misleading, and the right question is, which makes more sense over an investment period of fifty years?
On top of that, fuel cost is a small part of nuclear’s overall cost, so it’s less exposed to risk of fuel price changes than any of the fossil fuel options. With fossil fuels, most of the generating cost is fuel cost, and the price of that could triple or quadruple after the plant is built. Nuclear, once it’s built, is not only an affordable clean air source of reliable energy, but it also has proven to give Ontarians this long-run cost certainty because the fuel component is small. Ontarians consider that certainty to be very valuable.
How are you characterizing the economic benefits?
We are presenting nuclear as exactly what it is: the affordable clean air energy, from a technology that grew up here in Canada, sustains highly paid jobs here in Canada, and is part of our national innovative capacity.
Last year we did a comprehensive study that showed how nuclear science and technology is an integrated part of Canada’s innovation system, supporting advanced manufacturing, medicine, food safety and many other areas of Canadian strength.
We are just now completing an economic impact study that will update the benefits nuclear has for jobs in Ontario and Saskatchewan in particular, for highly qualified personnel in science and engineering, for thousands of Aboriginal people who get good employment and training opportunities as a result of uranium mining, and so on.
How is the CNA is collaborating with other stakeholders in the sector?
In lots of ways. We’ve been developing a strategic partnership with Pollution Probe, and are also working toward one with the Canadian Cancer Society, which has a strong interest in nuclear medical diagnosis and treatment – that’s an area where Canada has been a leader since the beginning in the 1950s.
In policy areas, the CNA has been engaged in the national energy framework discussions that were convened by the Energy Policy Institute of Canada (EPIC). We’ve also contributed to important work done over the past year by the Canadian Academy of Engineering on Canada as an Emerging Energy Superpower (www.acad-eng-gen.ca/e/home_.cfm). And we’ve worked with the Canadian Manufacturers and Exporters on a study of the economic impacts of our industry, which is leading us to foresee possible further areas of collaboration.
What kind of assurance of demand growth does the CNA think policy makers should expect to have, before making a commitment to new nuclear generation?
With the possible exception of things like demographics, it is not realistic to expect strong assurance of any future market trend. The reliability of forecasts is very weak more than a year or two out, and the time frame for building infrastructure is long. If you wait for strong assurance that the demand is there, you’ll be undersupplied during years of economic growth, and electricity supply will be a bottleneck. That’s why Ontario has a Long Term Energy Plan, which was very well developed and continues to provide a good road map for the province.
To what degree is it realistic to expect the next generation of nuclear technology to operate flexibly – and will it be adequate to at least partially offset swings in output from renewable capacity?
Well, for the foreseeable future, nuclear is going to be in a base load role – and base load is base load; there’s a metaphor that “the elephant can’t dance.” You still need elephants, in other words, you still need reliable base load power, and it has to be affordable and clean. Nuclear will continue to be very good in that role.
You can breed smaller and nimbler elephants to a limited degree. A lot of work has been done with the existing fleet of reactors to improve load-following. Designers are telling us that the new reactor designs will have significantly more load-following capability. You’d have to talk to the individual companies for specifics of each design, but essentially there are two ways to do it: vary the output of the reactor itself, or vary the amount of steam that passes through the turbine. As we’ve said, base load is base load, and you still need good strong elephants. But advances have been made and continue to be made.
As long as we’re asking this question, it’s only fair to ask: to what degree can we expect renewable technologies to mitigate the problems they have with intermittency? Nuclear is the anchor of a very dynamic system, and we’re being very innovative in managing as the system changes. We are proud that we make a big contribution to mitigating this country’s carbon emissions in two ways – not only are our own operations providing affordable clean air energy, but their presence also enables the grid to accept more and more renewables. At the same time, it’s entirely appropriate that renewable technologies, too, should be making progress on closing the gap between when they generate power, and when the system needs that power.