In a groundbreaking move, the most populous province of Canada, Ontario, has given the green light to a C$20.9 billion ($15 billion) venture aimed at constructing a novel type of nuclear power plant. The provincial government announced on Thursday that Ontario Power Generation Inc. has been granted approval to embark on the construction of the first of four small modular reactors, a project known as the Darlington project, designed by GE Vernova Inc. at a facility outside Toronto.
The approval of the Darlington project, touted as the initial deployment of its kind in a Group of Seven country, signifies a significant step forward for a budding technology that has been heralded as a pivotal solution in meeting the burgeoning power demands stemming from artificial intelligence.
The interest in nuclear energy has surged on a global scale as technology companies and governments seek sustainable and reliable energy sources to cater to the escalating electricity requirements. Proponents of Small Modular Reactors (SMRs) argue that these reactors, which can be manufactured in factories and subsequently assembled on site, hold the promise of being more cost-effective and quicker to construct compared to traditional nuclear reactors. Tech giants like Amazon.com Inc. have already struck deals with companies involved in developing next-gen nuclear technologies to secure power supply for their data centers.
Despite this optimistic outlook, there are still formidable challenges to surmount. SMRs are currently costly, generate lower power output than conventional reactors, and have seen limited large-scale deployment. The few that are operational commercially are predominantly located in Russia or China. Merely a couple of years ago, NuScale Power Corp., the pioneer in small reactor design with US approval, decided to scrap its flagship project due to escalating costs.
The initial unit at the Darlington site is projected to cost C$6.1 billion, with expectations of subsequent reactor costs decreasing as the company acquires more experience, as per the recent statement. Ontario's Minister of Energy and Mines, Stephen Lecce, highlighted the project as the optimal and most cost-effective solution to address the escalating electricity needs confronting the province.
Ontario Power, a government-owned entity, entered into an agreement in 2023 with GE Hitachi Nuclear Energy to implement its BWRX-300 SMR at the Darlington site. With a capacity of around 300 megawatts, approximately a third of the output of traditional reactors, these small modular reactors mark a pivotal foray into innovative energy solutions.
Commenting on the significance of the project's approval, Chris Gadomski, lead nuclear analyst for BloombergNEF, emphasized the substantial advancement this represents for the US, Canada, and the West, given that they have been lagging behind the progress made by China and Russia in this domain. The endeavor of constructing four SMRs as part of Ontario Power's plan is anticipated to facilitate learning and drive down costs, making each subsequent unit more cost-effective than its predecessor.