Nuclear Intelligence Report - October 2021: Ontario's electricity future needs nuclear

NUCLEAR INTELLIGENCE REPORT | OCT 2021

Ontario’s electricity future needs nuclear This month’s Nuclear Intelligence Report examines the role of nuclear energy in Ontario’s electricity future. Working with a climate modelling firm, Navius Research, we modelled Ontario’s electricity supply out to 2050 under different scenarios.

Our modelling assumes that Ontario (and Canada) will meet our 2050 climate targets. This is no small feat—it will require policymakers to take more ambitious actions than they have so far to reduce emissions. That may mean more restrictive regulations, an increase to the carbon price, or some other set of policies. But we start with the assumption that we can and will meet this challenge.

TAKEAWAYS •

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A massive increase in electricity generation is needed for Ontario to reach its climate goals. New nuclear power would help ensure this transition is affordable and successful.

By deploying 9,000 MW of new nuclear in the 2040s—effectively doubling the size of our nuclear fleet—Ontario could reduce the cost of electricity buildout by 10% while helping get to net-zero emissions.

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Ontario’s refurbished fleet of nuclear reactors is crucial to keeping our grid clean, safe, and reliable.

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Deploying new generation in time to meet our climate goals requires that planning starts now.

The energy transition that results from these efforts brings two major changes for our electricity sector.

First, the move away from fossil fuels across our economy produces a major increase in electricity demand. Ontario’s current electricity mix provides the groundwork for meeting this challenge. Anchored by a refurbished fleet of safe, reliable nuclear power plants, our generation assets provide a solid foundation on which to build.

But build we must. Some industry experts suggest that electricity demand could increase close to threefold over the next thirty years. For our baseline scenario, we modelled a very conservative projection—an increase in electricity generation from 154 TWh in 2020 to 283 TWh in 2050, or about an 80% increase in generation. Even at this conservative level, the buildout of electricity generation and infrastructure required is massive.

80

%

BY

2050

Our modelling found that even at a conservative level, Ontario will need to increase electricity generation by 80% in order to reach our climate goals.

The second implication of the energy transition is that emissions from the electricity sector must be reduced to zero. This means that generation from Ontario’s natural gas plants must be reduced, while making greater use of renewable natural gas.

Recent reports from Ontario’s electricity system operator have highlighted what a significant challenge this is. The shift from natural gas creates additional capacity needs in the electricity sector which must be met by cleaner forms of generation.

In short, by 2050 our electricity needs will dramatically increase, even as our options for generating that electricity are reduced.

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How can we meet the challenge?

Our modelling tested exactly this question, exploring the most economical ways of meeting rising demand while reducing emissions and keeping prices affordable.

We explored two main scenarios—one relying on technologies that are ready to be deployed today, and another where new technologies become commercially available, specifically Small Modular Reactors (SMRs) and utility-scale storage.

Our findings should be a wakeup call to policymakers and energy leaders.

To meet the demands of the future, we must start planning now.

Build new large-scale nuclear Our first scenario tested how Ontario can meet this challenge using the tried and tested technologies on the market today.

In this scenario, we meet new electricity demand primarily through a mix of wind, solar, and nuclear energy.

In this scenario, our baseline, total electricity generation increases by 129 TWh between now and 2050. A dramatic expansion of wind and solar play a crucial role in meeting this growth. Ontario’s wind capacity more than doubles, allowing wind generation to grow from 18 TWh to 45 TWh. Solar’s rise is even more dramatic, with a more than ten-fold capacity increase allowing generation to grow from 2 TWh to 42 TWh. But the expansion of renewables, dramatic as it is, still falls well short of meeting Ontario’s new demand. For that, new nuclear generation is needed. The model projects that to reduce emissions and keep prices low, Ontario should plan

for one or more large-scale nuclear plants, like those at Bruce Power and OPG’s Darlington and Pickering sites, to come online in phases throughout the 2040s. More than 9,000 MW of capacity would be needed, producing 74 TWh of electricity—nearly doubling our current nuclear fleet.

This nuclear expansion powers a shift from fossil fuels, reduces the cost of our energy transition by 10%, and eliminates the need to find land for tens of thousands of additional MWs of new renewable electricity generation (a significant challenge that we explored in our last Intelligence Report).

Of course, new nuclear plants will require significant lead time for siting, licensing, planning, and construction. If Ontario is to meet our 2050 targets, planning for this new generation should begin right away.

ELECTRICITY GENERATION (TWh)

2020 2050 0

50 Existing and refurbished nuclear

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2

BRUCE POWER CENTRE FOR NEXT GENERATION NUCLEAR

100 New large-scale nuclear

150

200 Natural gas

Cogeneration

250 Hydro

300 Wind

Solar

Build SMRs Over the coming decades, energy technologies only just entering the market now may also be able to play a role in meeting our electricity needs. This includes utility-scale battery storage, which would enable broader adoption of wind and solar generation. It also includes an emerging nuclear technology—Small Modular Reactors (SMRs). For our second scenario, we looked at what could happen if both of these energy sources become commercially available.

Frequent readers of the Centre will be familiar with SMRs, a technology that may enable broader deployment of nuclear energy in a way that is both economical and flexible. Some leading SMR developers are already near to commercializing their designs in Canada and abroad. To project how the economics of SMRs may evolve from now to 2050, we used estimates from the federal government’s SMR Roadmap.

What we found is that a dramatic deployment of SMRs may be both economical and practical in Ontario. The model projected that as much as 9,400 MW of SMRs could be deployed in Ontario by 2050.

9,400 MW of SMRs deployed by 2050 Like large-scale nuclear, their impact includes keeping prices low while providing an important complement to intermittent renewable sources. By providing flexible generation through modular design, SMRs might prove particularly useful for targeted deployment, such as alongside large industrial sites or in locations not currently connected to the provincial grid. In all, the modelling found that SMRs could reduce electricity price increases by more than one third.

The model projected that, like large-scale nuclear, the crucial time for deployment of SMRs will be in the early 2040’s, meaning that Ontario must start planning for this deployment today.

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An urgent challenge Ontario has built a competitive advantage with our clean grid, anchored by reliable nuclear power. The refurbishment of our nuclear fleet is providing the critical foundation for our net zero transition.

But work remains to be done to meet our climate goals. Our modelling shows that an expansion of nuclear power—both large-scale and SMRs—will be crucial to transitioning our economy in a way that is realistic and affordable.

Meeting that objective requires that we increase the current rate of planning.

2050 is just around the corner— the time to start is now.

BRUCE POWER CENTRE FOR NEXT GENERATION NUCLEAR Based within the Nuclear Innovation Institute, the Bruce Power Centre for Next Generation Nuclear nurtures a deeper understanding of the role of nuclear power in developing new energy technologies that can help forge Canada’s path to a net-zero economy.

Each month, the Nuclear Intelligence Report explores next-generation nuclear technologies, examining the energy policy and business landscape behind them. nii.ca/centre-for-next-generation-nuclear This report was supported by analysis from Navius Research Inc. (naviusresearch.com)

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