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Canada's Nuclear Future

Who’s Going to Finance the New Nuclear Capacity Canada Needs?

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Mimi Ginger Wilde

Senior Engineer, Nuclear Business Unit, Hatch

Megan Goodland

Nuclear Specialist, Hatch

As Canada gets ready to expand electricity-generating capacity, the question is how this investment will be financed. In the changing landscape of power infrastructure, the answer is: creatively with nuclear.

Canada’s climate and energy goals are wholly dependent on the rapid development of new green baseload electricity generation infrastructure. We need emission-free capacity that’s always on, and that is nuclear.

Turning to nuclear for reliable baseload power 

“In order to reach Canada’s targets of net-zero emissions by 2050, we’re going to need to transition to high levels of electrification in all of our sectors,” says Mimi Ginger Wilde, a senior engineer in Hatch’s Nuclear Business Unit. “This involves looking at passenger vehicles and municipal transportation — buses and rail — and transitioning those over to electricity, as well as looking at commercial and residential heating. All of these require baseload power in addition to being able to maintain existing supply to industrial uses.”

“Other forms of green energy, like wind, solar, and storage, are going to play a very important role,” adds Wilde. “But when we’re talking about baseload power, there’s nothing better than nuclear for providing reliable green capacity to the grid.”

And so, realistically, the time for debate on whether or not Canada needs new nuclear is past. We need it. The question now is: how do we build it? And how do we pay for it?

“Large-scale nuclear is a significant capital investment that requires a lot of planning, and it has traditionally been built by public utilities with government backing,” says Megan Goodland, a Nuclear Specialist at Hatch. “Among the potential advantages that technologies like small modular reactors introduce is the possibility of expediting both the financing side and the project execution side.”

New financing models invite everyone to the table

While innovative nuclear technology is making project financing more approachable, electricity price unpredictability and regulatory hurdles are complicating matters. Navigating this space requires responsible innovation in finance planning, which is something Hatch has never shied away from. Understandably given their commitment to tackle the toughest challenges of today, and tomorrow.

“Nuclear power is capital cost-intensive, but has a lower operating cost as compared to other forms of generation,” says Wilde. “Without the promise of electricity prices that will allow you to pay that back for your operation, it’s very difficult to invest in nuclear. So, we’re introducing financing methods in order to guarantee that payback. There are a few methods for doing that.” One approach is through power purchasing agreements and energy offtake agreements, which become much more viable as projects become smaller and more targeted at existing energy needs. There are also sovereign loan guarantees, which bring government back into the picture as guarantors against the private risk of developing essential power infrastructure. Finally, the risk can be shared between many investors — including those who will benefit directly from having a new source of green baseload power in the community — whether through small business consortiums, innovative nuclear green bonds (as recently introduced by Bruce Power), or even crowdfunding. Nuclear investing is no longer the sole purview of those with pockets billions deep.

The rewards of nuclear investment are clear

These projects make money, of course. Though the price of electricity may be unstable in the short term, demand is only going up and up and up. These investments also bring multiplicative economic benefits, through job growth, through business opportunity, and through advancing Canada’s position as a leader on the world stage. “Every part of the economy is touched in some fashion, but more importantly – it’s the right thing to do!” says Wilde.

Most importantly, though, these projects are undeniably essential to meeting our climate and energy goals. Investing in Canada’s nuclear future is investing in Canada’s future. Period.

Discover more on the energy transformation challenge and nuclear opportunities at hatch.com.

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