The Point Lepreau nuclear power plant in Point Lepreau, N.B., on July 9, 2018.Kevin Bissett/The Canadian Press
Mike Holland was among Canada’s leading evangelists for small modular nuclear reactors. During his tenure as New Brunswick’s energy minister, from 2018 to when he stepped down on June 20, he vigorously supported plans by the province’s Crown utility, NB Power, to construct two different small reactor designs from startup companies: U.S.-based ARC Clean Technology and Britain’s Moltex Energy. This represents Canada’s most ambitious – and perhaps riskiest – foray into bleeding-edge nuclear technology.
In an interview shortly before he resigned to pursue an opportunity in the private sector, Mr. Holland recalled how SMRs arrived on his agenda soon after he assumed office. He began exploring what advanced reactors could mean for decarbonizing the province’s electricity sector and growing its economy, and concluded New Brunswick could become a hub for nuclear design and manufacturing, and export reactors around the world.
“I saw the opportunity for New Brunswick to not just participate, but be a leader in this,” he said. “I am someone that loves to be on the cutting edge.”
His enthusiasm and risk tolerance proved a boon for ARC and Moltex, two tiny startups that have neither licensed nor constructed a commercial reactor. Under Mr. Holland’s leadership, New Brunswick became an incubator and helped the companies attract government funds to continue their work.
But NB Power is already struggling with persistent problems at its lone existing reactor at Point Lepreau Nuclear Generating Station. It has been negotiating a partnership with Ontario Power Generation that could see the latter assume partial ownership and help fix the ailing plant.
If NB Power needs outside assistance with a conventional reactor it has owned and operated for more than 40 years, one might question the wisdom of building two more featuring untested designs. Mr. Holland’s replacement as energy minister, Hugh Flemming, must now decide how comfortable he is with the province’s SMR ambitions.
Unconventional thinking
Nearly all of the more than 400 nuclear reactors operating today use water to cool their highly radioactive cores. Water also acts as a “moderator,” slowing down the high-energy neutrons produced by nuclear fission. Though water-cooled reactors have dominated for decades, they cost huge sums to build and produce waste that remains hazardous for countless human lifetimes. They’re vulnerable to severe (albeit rare) accidents that can render surrounding areas uninhabitable.
Virtually every SMR is marketed as addressing these and other shortcomings – and most have ditched water as coolant and moderator.
According to documents released by New Brunswick’s energy ministry through the province’s freedom of information legislation to researcher Susan O’Donnell, and provided to The Globe and Mail, in 2017 NB Power reviewed dozens of SMRs it read about in nuclear industry publications. It came up with a short list of five, which it later narrowed to ARC and Moltex, and enticed both companies to set up headquarters in Saint John.
ARC and Moltex are pursuing what the industry calls “fast” neutron reactors, so named because they lack a moderator. The ARC-100 reactor would be cooled using liquid sodium metal and consume enriched uranium metal fuel. Moltex’s Stable Salt Reactor-Wasteburner (SSR-W), meanwhile, would use molten salt fuel placed in fuel assemblies similar to those in conventional reactors.
The SSR-W would require its own fuel reprocessing plant called WATSS (short for Waste to Stable Salt), which would convert Point Lepreau’s spent fuel into new fuel. For NB Power, that’s a major attraction: As of last summer, Point Lepreau had more than 170,000 Candu spent fuel bundles. Moltex says that’s enough to power its reactor for 60 years.
In May, 2019, NB Power sent a letter to Mr. Holland and Premier Blaine Higgs urging them to support fast reactors. The utility told its government masters that there was enough room at Point Lepreau for both reactors and that they could be up and running by 2030.
“These two technologies have different market applications and there is no downside to letting both of them work through the process,” the letter stated.
New Brunswick’s latest energy plan suggests electricity consumption will nearly double in the next few decades. NB Power’s challenge is to satisfy that demand while simultaneously reducing greenhouse gas emissions; Lori Clark, its chief executive, has cast SMRs as playing an important role in the utility’s efforts to reach net zero by 2035.
What New Brunswick covets most, however, is a shot of economic adrenalin.
Even optimists expect that SMR demonstration units will be too expensive to be economically attractive. Multiple units must be built to exploit economies of scale and reduce costs.
NB Power is counting on that. According to documents released under the federal Access to Information Act, the utility expects the first ARC-100 would be followed by 11 more units by mid-century. By then, up to 24 would be built in Canada, and the same number in other countries. And the first SSR-W would lead to 11 more built across Canada and two dozen more in the United States, Britain and Eastern Europe. If that happened, they’d be among the most successful models in history.
NB Power thought more than half of the components would be manufactured in New Brunswick. It also enthused about royalty payments on reactor sales, “potentially worth billions of dollars.”
Technical risks
But to realize any of that, New Brunswick’s SMR program must overcome technical challenges that have plagued the nuclear industry from its earliest days.
Edwin Lyman, a physicist at the Union of Concerned Scientists, has warned policy makers about the pitfalls of betting on “advanced” reactor designs, which he has studied over many years. “Developing new designs that are clearly superior to light water reactors overall is a formidable challenge, as improvements in one respect can create or exacerbate problems in another,” he wrote in a 2021 report.
Fast reactors, which originated in the earliest years of the nuclear age, bear this out. The U.S., Britain, the Soviet Union, France, Germany, Japan and India all pursued so-called “fast breeder” reactors that could produce more plutonium fuel than they consumed. A report that examined the history of those reactors, produced in 2010 by the International Panel on Fissile Materials, a group of arms control and non-proliferation experts, found member countries of the Organization for Economic Co-operation and Development collectively invested about US$50-billion researching breeder reactors. Outside the OECD, Russia and India also spent heavily.
They didn’t have much to show for it. According to the International Atomic Energy Agency, there are only two fast reactors currently generating electricity – both in Russia. The International Panel found that sodium-cooled reactors proved expensive to build, complex to operate, prone to malfunctions, and difficult and expensive to repair. Sodium reacts violently with water and burns if exposed to air. Major sodium fires have occurred in previous reactors, often leading to lengthy shutdowns.
As for molten salt reactors, there have only been two experimental exemplars, the most recent of which operated in the 1960s. Mr. Lyman’s 2021 report said molten salts were highly corrosive to many materials typically used in reactor construction. Moreover, “liquid nuclear fuels introduce numerous additional safety, environmental and proliferation risks.” Molten salt reactors likely couldn’t be built before the 2040s at the earliest, he concluded.
In addition to confronting such technical challenges, New Brunswick’s strategy also presupposes that reprocessing of spent fuel will be permitted and affordable. But a report published last year by the Nuclear Waste Management Organization, the industry-controlled organization tasked with disposing of Canada’s reactor waste, was skeptical on both counts.
NB Power is also counting on circumstances that are beyond its control. According to a letter signed by former CEO Keith Cronkhite in 2020 and released under the Access to Information Act, New Brunswick’s plan hinges on Ontario and other provinces building multiple BWRX-300s. (The letter was sent to Prime Minister Justin Trudeau.) If they do not, “SMR companies based in New Brunswick will not be able to attract private investment necessary to ever deploy a new reactor,” Mr. Cronkhite’s letter predicted.
The SMR plan is already falling behind schedule. At a rate hearing in June before the New Brunswick Energy and Utilities Board, Brad Coady, vice-president of strategic partnerships and business development, said NB Power believes it is no longer possible to have SMRs operating by 2030; the earliest date for the first unit has been pushed back to 2032 or 2033.
Delays will have consequences, because NB Power needs options to replace its coal-fired generation while at the same time satisfying growing demand for electricity. The utility, he said, has been studying alternative scenarios “if we don’t have them in time.”
Paying for it
Perhaps the most fundamental risk to New Brunswick’s SMR push is that the province can’t afford it.
Last year, ARC and Moltex each estimated that developing their reactors would cost around $500-million per company. NB Power is Canada’s most heavily indebted utility, and its budgets must be approved by the province’s Energy and Utilities Board. It has limited ability to pay for crucial early steps such as studies necessary to establish what the environmental consequences of the SMRs might be. In published reports, NB Power has acknowledged that its research and development efforts might have to be sacrificed to meet debt-reduction targets.
David Coon, leader of New Brunswick’s Green Party, said NB Power faces huge capital spending to retire its Belledune coal-fired generating plant and refurbish its Mactaquac hydroelectric dam and transmission lines.
“That is why they’re really not putting much into this,” he said. “Their approach has been, well, if we get a new nuclear plant out of this that that doesn’t really cost us much of anything, then bonus!”
ARC and Moltex also don’t have the money. In late June, ARC parted ways with CEO William Labbe and laid off an undisclosed number of staff – a move some observers said was likely due to a shortage of funds. Mr. Chronkite’s 2020 letter warned that the two SMR developers were small startups that couldn’t afford to do work using their own resources, and were at immediate risk of insolvency.
“Without federal support this year to the SMR developers in New Brunswick, one or both companies are expected to close their offices in the next year,” Mr. Cronkhite’s letter stated.
Indeed, New Brunswick officials have counted on continuing and generous support from Canadian taxpayers. In his letter, Mr. Cronkhite called on the federal government to provide $70.5-million that year to ARC and Moltex – and more than $100-million the following year – to “keep the SMR development option in New Brunswick viable.” In 2022, the two companies would need another $91-million.
Ottawa obliged, but only partly. It gave Moltex $50.5-million in 2021. The federal government also provided ARC $7-million last year. The lobbying efforts continue: When NB Power board vice-chair Andrew MacGillivray received his mandate letter in May, 2023, it instructed him to “support efforts to acquire federal funding” for the SMRs.
New Brunswick’s own history suggests the risks inherent in counting on boundless federal support.
Andrew Secord, an economics professor at St. Thomas University in Fredericton, has studied decision-making in the 1970s that led to the construction of the original Point Lepreau reactor. In a 2020 paper, he detailed how Point Lepreau arose in part from an export-led strategy under which multiple large reactors would be built and their electricity exported to New England. NB Power (then known as the New Brunswick Electric Power Commission, or NBEPC) first focused on building interconnections with New England and then pivoted to building reactors.
This strategy failed by 1972, but by that point NBEPC was unwilling to change course. Over the next three years, it assumed ever greater risks as potential partners failed to materialize.
“NBEPC managers continued along the nuclear path, exhibiting higher risk behaviour in the process,” Mr. Secord wrote. “As NBEPC executives spent more time and resources on the nuclear option, their personal attachment and the associated institutional commitment increased.”
Mr. Coon said New Brunswick’s SMR plan so far has cost the provincial and federal governments only around $100-million. But it could start costing taxpayers and ratepayers “much more money” if things progress further.
“It seems like we haven’t learned our lesson in New Brunswick,” he said.