Nuclear cheaper than wind, solar as Canada greens its grid: report
The Canadian Energy Regulator (CER) should support the country’s commitment to solar and wind for most of its new power generation capacity by 2050, according to a new report that suggests small nuclear reactors are the best option.
Canada is well-positioned to take advantage of small nuclear reactor technology, having operated reactors for more than 70 years, the CD Howe Institute said in a report released Tuesday. Canada has 19 operating reactors and is the world’s second largest producer of uranium, a key component of nuclear fuel. By 2021, Ontario Power Generation said Canada could secure 70 to 80 percent of the nuclear supply chain, from fuel production to parts manufacturing.
However, the CER projection does not include any expansion of Canada’s nuclear assets, only the rehabilitation of existing reactors. Wind and solar account for a quarter of the nation’s total energy generation by 2050, the year Canada has committed to net zero emissions.
Solar and wind will make up 60 percent of the increase in new capacity added between 2019 and 2050, according to researchers at CD Howe. But this means additional energy storage costs.
“The Achilles heel of wind and solar is adequate storage, at a reasonable cost, for power that isn’t needed in the middle of the day, but is needed when the sun isn’t out and/or the wind isn’t blowing,” authors John Richards. and Christopher Mabry wrote in the report.
CD Howe’s findings followed a report by the Royal Bank of Canada in September Energy consumption in Canada will increase by 50% in the next decade. The bank warned of a power shortage in 2026.
Calculating the cost of small nuclear wind and solar
In their report, Richards and Marby rank the cost of various energy sources, with nuclear power from small modular nuclear reactors (SMRs) being the cheapest to operate, once wind and solar energy storage costs are factored in. Unlike larger nuclear power plants, which often run over cost estimates and suffer construction delays, SMRs are less complex and require less material and labor.
The International Atomic Energy Agency (IAEA) defines small reactors as having a power of less than 300 MW. last month, Canada Infrastructure Bank announced an agreement with Ontario Power Generation to provide $970 million to build the country’s first small modular reactor. Clarington, Ontario, near the Darlington Nuclear Generating Station. The federal government’s autumn economic statement also included a tax credit of up to 30 per cent for investment in clean technologies, including SMR.
CD Howe calls Ottawa’s latest nuclear policy offer “a modest down payment on green energy funding,” and insists Canada’s net zero goal will require a “massive reconfiguration” of the energy sector.
“These are welcome actions from Ottawa, but nuclear power is still excluded from important federal clean energy funding programs such as the Green Bond Framework,” Richards and Marby wrote. “It’s going to take a lot more funding to make sure we don’t put all our eggs in the wind and solar basket.”
Europe’s energy crisis sparked by Russia’s invasion of Ukraine has helped nuclear power overcome its reputational baggage, with an increased focus on energy security. Governments from Japan to South Korea to the United States have made “conversions” to nuclear power over the past year because energy prices have risen, according to a major Canadian uranium investor.
“What politicians have figured out is that we’ve loaded a lot of continuous power into the grid over the last 20 years, which has been good. But it’s not a magic bullet,” said John Ciampaglia, CEO of Sprott Asset Management. Yahoo Finance Canada in August The Toronto-based financial firm owns the world’s largest physical uranium investment fund. (U-UN.TO).
“You need electric baseload generation to offset the intermittency of renewables,” added Ciampaglia. “There’s only three ways to do it. You can burn natural gas. You can burn coal. Or you can have nuclear power plants.”
Jeff Lagerquist is a senior reporter for Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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