Ottawa favours Candu reactors

Federal Natural Resources Minister Gary Lunn says it is "imperative" that Crown-owned Atomic Energy of Canada Ltd. be awarded the multibillion-dollar contract to build Ontario's first new nuclear reactors in more than two decades.

"I'm quite prepared to say on the record that we are not technology neutral," Mr. Lunn said in an interview. "We are very favourable to the Candu technology."

However, his comments are at odds with those of Canada's nuclear safety regulator, who has said that Atomic Energy does not have the hometown advantage over global vendors.

Linda Keen, chief executive officer of the Canadian Nuclear Safety Commission, says in a statement posted on the regulator's website that the future for regulation will be based upon an expanded use of international standards.

Ms. Keen delivered a similar message to industry executives last October, deflating AECL's hopes of being the fastest to deliver a new reactor, government and industry sources say.

Nuclear power is the backbone of Ontario's electricity generating system, with AECL's Candu reactors supplying 40 per cent of the province's energy needs.

The Ontario government plans to spend up to $40-billion building two new nuclear reactors and refurbishing up to half a dozen existing ones over the next two decades, ending a prolonged slump in the industry.

The last time a new nuclear plant went online in Ontario was 1992.

But in contrast to the country's previous nuclear building program, AECL is competing with global vendors for the business in its own backyard. Ontario Power Generation, the provincially owned electricity utility, and Bruce Power, a private company that operates a nuclear station on Lake Huron, have applied to the regulator for site approval. Neither company has yet chosen the technology it plans to use.

AECL is facing competition from Areva NP, a French-German consortium that is building reactors in France and Finland.

Murray Elston, president of the Canadian Nuclear Association, said he understood that AECL was marketing itself on the basis that it could readily deal with Ontario's demand for a new nuclear plant.

"I think they have products that they believe are more quickly available," he said.

"They're certainly keen to be in the field pretty quickly, no question about that."

AECL spokesman Dale Coffin said the company could have an advantage over other bidders because the regulator is familiar with its technology.

"Other than that, we're subject to the same review as everybody else," he said. "We have not publicly stated that we think we have a fast-track advantage here."

Aurèle Gervais, a spokesman at the regulator, said no decision has been made regarding the licensing of any reactor design.

The federal government appears willing to circumvent the regulatory process in the interests of protecting Canada's nuclear industry just as nuclear energy enjoys a renaissance internationally.

"We must build the Candu technology at home," Mr. Lunn said. "It's imperative for the Canadian nuclear industry. If we can't compete at home, I would suggest it wouldn't look very good for our technology elsewhere around the world."

He said cost overruns associated with building reactors in Ontario in the 1980s are a thing of the past. AECL has had an "impeccable record" over the past 10 years. The organization delivered six reactors on time and under budget. That included three in South Korea and two in China, he said.

The federal government has also boosted the regulator's funding by $93-million over five years to help it deal with a growing workload and to address Ms. Keen's warning to the industry that there could be delays licensing new reactors.

"We are determined to have a world-class regulator so we can take on the challenges of a rapidly growing industry," Mr. Lunn said.

Ms. Keen has privately told industry players that she cannot give them a timeline for approving new reactors because she does not have enough resources to take on the added workload, according to the sources.

"The CNSC will have to acquire new resources - both human and financial - in order to carry out the necessary work," she told a seminar on regulation last February sponsored by the Canadian Nuclear Association. "The combined forces of a growing industry and a work force with many nearing retirement present challenges."

It typically takes 10 years to build a new reactor, but the first shovel cannot go in the ground without construction and operating licences.

The sources said the uncertain time frame for approving projects could put further pressure on the Ontario government as it races to meet an anticipated severe energy shortage in the province in 2015.

A senior adviser to AECL, who wished to remain unidentified, said he was aware that Ms. Keen had sent a letter in the last month to chief executive officer Robert Van Adel to complain about inadequate resources and to warn that the regulator couldn't proceed expeditiously with an agreed-upon timetable for licensing of the enhanced Candu 6 and the Advanced Candu Reactor because it wasn't as high a priority as ensuring the safety of existing reactors and licensing projects launched by power utilities.

But the adviser to AECL said that OPG is interested in building another Candu reactor at its Darlington site because it is proven technology and could be counted on to be put into service in 2015.

Mr. Lunn said it is up to the company seeking the licence to choose the technology. The job of the regulator is to ensure safety, he said.

"And the safety record of the Candu is top notch."