Written By Luke Morrison, Jessica Kennedy, Shawn Munro, Dayo Ogunyemi and Nathan Green

The concept of deploying nuclear reactors as a carbon-free source of energy is gaining momentum in Alberta and elsewhere in Canada. This article explores recent promising developments in this space and discusses some of the challenges that lay ahead for those seeking to develop small modular reactors (SMRs) in Canada.

Promising Developments in the Alberta SMR Market

In support of the Alberta Government's efforts to decarbonize energy production in the province, the Minister of Environment and Protected Areas, Rebecca Schulz, recently announced a $7 million investment in support of Cenovus Energy's SMR study.¹ The study, expected to cost nearly $27 million, will evaluate the feasibility of utilizing SMRs to provide the energy inputs needed to support oil sands production via steam-assisted gravity drainage.

In her announcement, Minister Schulz confirmed the Province's ongoing focus on SMRs:

A few years ago, the idea of expanding nuclear energy use was on the back burner—that is no longer the case.  In Alberta, small modular nuclear reactors have the potential to supply heat and power to the oil sands, simultaneously reducing emissions and supporting Alberta's energy future.²

Alberta's Premier, Danielle Smith, also recently confirmed that an Alberta-Ottawa working group on emissions reduction and energy development held its first meeting to align emissions reduction and energy development efforts between the Alberta and Canadian governments. This meeting highlighted key areas of contention, including the federal Clean Electricity Regulations.³ Nevertheless, the working group has agreed to commence the development of a regulatory framework for SMRs and focus on other emissions reduction technologies as key areas of desired cooperation.

The Alberta Government has consistently demonstrated an interest in the development of SMRs. Premier Smith included explicit reference to SMR development in each of her mandate letters to Minister Schulz,⁴ the Minister of Energy and Minerals,⁵ and the Minister of Affordability and Utilities.⁶ Additionally, Alberta has collaborated with Saskatchewan, Ontario and New Brunswick to develop a strategic plan for the advancement of SMR technology as a new source of clean, reliable energy, which we previously commented on in our blog, Small Modular Reactors: A Key Component to a Low Carbon Future?

The Ontario government has also made strides in advancing SMR development by announcing plans to increase the ultimate number of SMRs at its Darlington generating station from one to four,⁷ having selected a 300 MW design from GE-Hitachi. SaskPower recently identified the same 300 MW reactor as its model of choice for its future SMR deployment strategy,⁸ which is set to receive an injection of $74 million from the federal government.⁹In addition, Canadian Nuclear Laboratories recently issued a call for proposals for the next round of the Canadian Nuclear Research Initiative, which is a collaborative research program supported by Atomic Energy of Canada (a Crown corporation) that is designed to accelerate the development of SMRs.¹⁰

The Invest Alberta Corporation, a Crown Corporation established by the Alberta Investment Attraction Act, has entered into several memoranda of understanding with additional SMR developers, including X-Energy Canada Inc.,¹¹ Terrestrial Energy,¹² and ARC Clean Technology Canada.¹³ This indicates a growing interest in Alberta's SMR market.

It is anticipated that the federal government will include nuclear as part of its agenda at COP28, which will kick off shortly at the end of November in Dubai. These announcements demonstrate that SMR developments continue to feature prominently in the overall discussion around emissions reductions in Canada.

Challenges Ahead for SMR: Federal Cooperation with Provinces Crucial

Despite the promise and growing interest in SMRs, there are still significant challenges. The regulatory burden associated with design review and certification, as well as potentially lengthy project development timelines, remain key hurdles for the timely implementation of this clean energy solution.

A recent paper jointly authored by the World Nuclear Association, Canadian Nuclear Association, and Nuclear Energy Institute recommended that international nuclear regulators work together on collaborating and harmonizing review processes for reactor designs to avoid excessive duplication, which can increase the costs and time required to deploy new nuclear technologies.¹⁴As an example, the paper cited the bilateral efforts that the United States and Canadian nuclear regulatory commissions are undertaking for the aforementioned GE-Hitachi reactor to streamline licensing processes in both countries.

Regardless, individual development proposals will be subject to robust environmental and stakeholder impact assessment and review processes that will take years to navigate. The Canadian Nuclear Safety Commission remains the principal regulating authority for nuclear development in Canada, and provincial power authorities and environmental regulators are likely to play important roles in reviewing and approving proposals. In the context of regulatory requirements and lengthy construction lead times, SMRs may present a viable energy source in Alberta in the medium-to-long term.

Ultimately, successful deployment of nuclear technology in Alberta will require federal cooperation due to the Canadian federal government's jurisdiction over nuclear power.¹⁵ Ideally, this would include cooperative and streamlined regulatory processes that avoid duplication and the "pancaking" of regulatory layers. Federal-provincial cooperation and a focus on shared decarbonization objectives will be crucial for the realization of the province's SMR ambitions.

SMRs and Indigenous Partnership Opportunities

There are also several opportunities to explore Indigenous equity partnerships in pursuing SMR projects. In addition to financial support and incentives from governments that support such partnerships, the Canadian Government worked with the First Nations Power Authority to create a national Indigenous Advisory Council specifically focused on SMRs. The Council focuses on building capacity for Indigenous people(s) to meaningfully engage, make informed decisions, and participate economically in low-carbon energy alternatives like SMRs.¹⁶ The establishment of the Council presents opportunities for the industry to explore potential Indigenous co-ownership transactions in future SMR deployments, as well as contracting and capacity-building opportunities.