McKercher Leaderboard March 2021
Risk

Are Small Modular Nuclear Reactors in Saskatchewan’s Future?

The Government of Saskatchewan is working to achieve a 40 per cent emissions reduction from 2005 levels in Saskatchewan power generation by the end of 2029. Early efforts have seen expansions in wind and solar power capacity and a recent breakthrough with geothermal technology. In order to supplement expansion of zero-carbon and renewable power sources as well as support reliability in the power grid, the Saskatchewan Government has signaled it is taking a serious look at deployment of nuclear technology. In the last 18 months, the Government of Saskatchewan has taken two key steps which included signing an MOU with Ontario and New Brunswick for the development of small modular reactors (SMR) in Canada, and establishing a Nuclear Secretariat to co-ordinate nuclear policies and programs.

While the topic of nuclear energy in Saskatchewan has not been without controversy, this new conversation occurs with a much longer runway as deployment would occur in the early to mid-2030s. At the center of these new conversations is SMR technology, which offers the potential to introduce smaller, transportable reactors that can be tied together to increase output and that are designed to reduce generated waste. For comparison, a traditional nuclear reactor would generate in excess of 800 megawatts (MW) of electricity, while SMR designs for anywhere from 3 to 300 MW have been submitted to the Canadian Nuclear Safety Commission (CNSC). Given the above, SMR introduces opportunities for both on- and off-grid applications and could service remote industrial operations and Northern communities.

SMR technology enables both smaller-scale deployment and the ability to more effectively control traditional life cycle challenges such as generated waste and decommissioning of reactors. As a zero-emissions technology, SMR nuclear has the potential to be a key source of stable power generation to meet increasing public and private demand for power while also continuing to reduce emissions long-term.

In addition to the environmental benefits, SMR technology could blossom into a multi-billion dollar marketplace as Canada works to meet its international commitments to reduce emissions. With Saskatchewan’s rich uranium deposits, SMR deployment may ultimately metaphorically “kill two birds with one stone” by supporting a stable, low-emissions power grid in Saskatchewan and enabling the province to capture the economic benefit of a world-class resource in its own backyard.

Economic Benefits

The development costs of SMR have been viewed as a barrier to deployment. The existing MOU between Ontario, New Brunswick and Saskatchewan introduces potential cost-sharing benefits in developing the technology while leveraging key national stakeholders in nuclear energy. It is also worth noting that the Government of Alberta recently indicated its intention to sign onto the MOU. This type of inter-provincial collaboration offers a unique opportunity to reduce the economic burden on Saskatchewan while enabling it to leverage benefits that come with economies of scale. The most recent international climate agreement, the Paris Accords, introduced rolling emissions targets, where national climate plans introduce increasingly ambitious emission reduction targets. In this context, early adoption of SMR technology positions Canada to be a climate leader with the ability to export SMR technology to an international marketplace.

Canadian Regulatory Environment

A key question facing SMR deployment is how Saskatchewan and Federal impacts legislation and existing nuclear regulations will interact with the technology. The vast majority of legislative authority surrounding nuclear energy falls within federal jurisdiction. Given the lack of new nuclear energy projects in Canada in recent years, it is unclear how the relatively new Federal impact assessment framework will interact with a proposed SMR project. That uncertainty is magnified in a Province like Saskatchewan, which has no previous nuclear power projects and where projects infrequently trigger the Federal framework.

What is clear is that early engagement provides an opportunity to address concerns that arise under the Impact Assessment Act and other applicable regulation. The CNSC continues to provide expertise and technical knowledge to the Impact Assessment Agency for all nuclear projects, which includes a pre-licensing Vendor Design Review (VDR) process where project owners and proponents are able to seek clarity on regulatory requirements and design requirements. While Saskatchewan plans to continue leveraging natural gas as a key pillar in its emissions reduction targets through the 2020s, the federal government has signaled that no new natural gas plants will be approved after 2030, which creates both a significant need for a reliable, new energy source and an opportunity for SMR to meet future increases in demand.

Conclusion

Christopher Masich

Christopher Masich

The next decade presents a unique opportunity for Saskatchewan to re-define the conversation on nuclear energy technology locally, nationally, and internationally. While key regulatory and financial questions remain to be answered, it is clear that advancements in nuclear energy found in SMR technology have made the nuclear energy conversation one worth having. Strong investment in determining viability at an early stage uniquely positions Saskatchewan to reap the environmental and economic benefits of SMR technology locally and in the Canadian and international marketplace.

Chris Masich is a Partner practicing in the Firm’s Saskatoon office where he maintains a commercial transactions and project development practice focusing on Saskatchewan key economic sectors – energy, natural resources and agriculture. If you have a question on this Article or any other Saskatchewan legal matter, our natural resources advisory team invites an opportunity to discuss. Chris acknowledges the contributions of Tyler Gray, Student-at-Law, to this Article.

Chris Masich
McKercher LLP
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Saskatoon, SK
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