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 Canaccord Genuity Corp.


Delwin Graham - Mar 08, 2021
SMRs are expected to play a key role in Canada’s efforts to meet its target of net-zero greenhouse gas emissions by 2050 and in providing economic benefits as the country emerges from the COVID-19 pandemic.

The Canadian government sees great hope in Small Modular Nuclear Reactors, or SMRs. SMRs are expected to play a key role in Canada’s efforts to meet its target of net-zero greenhouse gas emissions by 2050 and in providing economic benefits as the country emerges from the COVID-19 pandemic. Last December, the federal government released its SMR Action Plan, which lays out Ottawa’s role in advancing the technology. According to Seamus O’Regan, Minister of Natural Resources, “small modular reactors represent the next great opportunity for Canada – helping us to phase out coal and electrify carbon-intensive industries such as mining and petroleum extraction”. (Cf., Jimmy Thomson, “Is Canada Betting Big on Small Nuclear Reactors? Here’s What You Need to Know”,, January 4, 2021)

True to their name, SMRs are small and modular. Compared to the footprint of a conventional nuclear facility like Ontario’s Bruce Power, which occupies four kilometres of shoreline, SMRs are built small enough to be shipped by rail or by truck. But SMRs are primarily considered to be “small” because of their power output. Whereas Bruce Power produces around 6232 megawatts, enough to power more than a quarter of Ontario, SMRs typically produce under 300 megawatts – the demand for a northern community might be in the 10’s. SMRs are meant to function like batteries and replaced after 20 or 30 years of use. (Cf., Thomson, “Is Canada Betting Big …?”)

There is considerable provincial support for this technology. Alberta is on board; the province needs a cleaner source of energy for its oil-sands projects. In situ oil‑sands mines (those that melt the bitumen underground by using steam) need a great deal of power, and currently that power comes from natural gas. Nuclear energy is a cleaner alternative. And, of course, nuclear reactors need fuel. Saskatchewan is home to vast reserves of uranium. While mined in Saskatchewan, uranium is shipped to Ontario for processing. Ontario also has its eye on exporting nuclear technology to other countries, especially developing countries like India that are looking to get off coal. To this point, the federal government recently announced a $20-million investment in Oakville’s Terrestrial Energy, which is developing an Integral Molten Salt Reactor Project that can produce up to 195 megawatts – enough to power a city the size of Regina. (Cf., Peter Zimonjic, “Federal Government Invests in Small Nuclear Reactors to Help it Meet Net‑Zero 2050 Target”,, October 15, 2020)

Canada is well positioned to become a global leader in the development and deployment of SMR technology. With over 60 years of science and technology innovation that culminated in the Candu Reactor, an experienced and competent regulator, and a vibrant domestic supply chain, Canada looks to lead an emerging global market, estimated at $150 billion a year by 2040. (Cf., “Canada’s Small Modular Reactor Action Plan”,, February 5, 2020)

Not only does it have the expertise and infrastructure, Canada also has the landmass for industrial off-grid applications. The potential uses of SMRs include:

-  Helping utilities replace energy capacity lost to closures of coal-fired power plants

-  Providing power and heat to off-grid industrial projects like mines and oil-sands developments

-  Replacing diesel fuel as a source of energy and heat in remote northern communities

But there is trepidation. Nuclear energy has long been touted as “clean energy”, but due to the quantity of uranium that large-scale reactors use and the complexity of their cooling components, there have been several incidents where reactors have partially or completely melted down – Three Mile Island, Chernobyl, Fukushima. The industry claims that this time it is different – due to their scale and the small amount of uranium they use, SMRs pose nowhere near the same risk. And unlike wind farms or solar farms, which require vast swatches of land, SMRs produce carbon-free electricity with a very small footprint. Levelling forests of habitat to build massive green-energy farms ultimately trades one environmental problem for another. (Cf., Georgia Williams, “Putting the New in Nuclear: Small Modular Reactors”,, August 28, 2019)

But what will happen to the nuclear waste? Currently it’s stored at reactor sites and the Chalk River Laboratories in Ontario – first in deep pools to be cooled down and then in containers to keep them isolated. However, a site for the long-term storage of nuclear waste in Canada has still not been selected after 10 years into the process. Furthermore, Elizabeth May, former federal Green Party leader, says that the potential development of SMRs “definitely raises new and very serious weapons proliferation risks”. Plutonium, a byproduct of nuclear energy development, can be used in nuclear weapons. Because SMRs are less efficient than large reactors, they create more waste and thereby contribute to nuclear proliferation. (Cf., Thomson, “Is Canada Betting Big …?”)

At the moment, developing a SMR is mostly a paper exercise – there are hundreds of different systems being touted, using technologies ranging from scaled-down versions of light water reactors to novel advanced technologies that generate power from molten salts or spent nuclear fuel. While startups have made big leaps, incumbent players are also moving into the SMR space. In the United Kingdom, a consortium led by Rolls‑Royce has been working on the development of a 440-megawatt reactor that it calls an SMR, and it intends to build 10 to 15 of them in the U.K. But NuScale’s reactor design in the U.S. is probably closest to being put into operation – a plant using 12 of its modules is planned by Utah Associated Municipal Power Systems (UAMPS) to be operational by 2027. (Cf., Nate Trela and Hana Askren, “Investors Get Charge Out of Small Modular Nuclear Reactors”,, August 12, 2020)

Right now, SMRs are a nascent sector – don’t buy your uranium futures yet. But it might pay to keep an eye on things. Please contact me at or 780‑408‑1518 for a few ideas.