Small Modular Reactors (SMRs) well-equipped to drive cost-efficient decarbonisation of Canada’s heavy industries

Climate change is considered a serious issue by 91 per cent of Canadians, with 86 per cent who believe the government should invest in clean energy technologies including renewables and nuclear energy to address the issue. As an energy-dense, carbon-free, and reliable energy source available around the clock, nuclear energy can play an integral role in fighting climate change – including through SMRs (small modular reactors). While much focus on SMRs has been on their ability to supply clean electricity, new research points to their significant potential to cost-effectively help decarbonize Canada’s heavy industry sector.

Nuclear is one of the largest producers of clean electricity around the world and in Canada, already accounting for 15 per cent of Canada’s electricity production. But of equal importance is its potential to decarbonize heat and power in Canada’s industrial sectors. The research, conducted by EnviroEconomics and Navius Research, and commissioned by the Canadian Nuclear Association (CNA), explores the economic and climate benefits and implications of employing small modular reactors (SMRs) in Canada’s high-emitting industrial sectors.

“Canada’s economy is built on the advantage of extensive, rich natural resources. But it’s a double-edged sword when it comes addressing climate change,” said John Gorman, President and CEO of the Canadian Nuclear Association (CNA). “While fossil fuels currently serve 80 per cent of all energy needs in Canada and contributed $108 billion of Canada’s GDP in 2018, they also account for a large share of this country’s greenhouse gas emissions. Collectively, oil sands, chemical manufacturing and mining currently contribute more than 30 per cent of Canada’s greenhouse gas emissions and face enormous challenges in reducing them. But the reality is we cannot afford to abandon these industries that form the backbone of our economy. We must focus on decarbonising them in an environmentally and economically advantageous way. This is where new research demonstrates that SMRs have the potential to be a gamechanger in Canada.”

The research points to the potential impact that SMRs can have on reducing emissions within heavy industries, while driving cost-efficiencies and contributing to Canada’s GDP (gross domestic product).

Key research findings:

• The study concludes that between 2035-2050, SMRs could reduce GHG emissions by 216 megatonnes (Mt) in the heavy industrial sector (Canada-wide emissions are approximately 700 Mt per year). That is the equivalent of removing all current emissions from the oil and gas sector for a one-year period in Canada, and is more than the yearly GHG emissions created by all types of transportation across Canada.
• This means that SMRs could contribute to getting to net zero by reducing GHG emissions by 14 Mt per year on average, the equivalent of taking over 3 million cars off the road per year.
• Beyond their value in cutting GHG emissions in the heavy industrial sector by 18 per cent by 2050, SMRs could lower the country’s cost of reaching net zero by more than five per cent and contribute up to $5 billion to GDP annually by 2050.
• By using SMRs as a GHG reduction method in large industry, SMRs create opportunities for scarce technologies such as hydrogen and renewable gas to reduce GHG emissions cheaper and easier in other industrial, household and transport heat and power applications.
• The deployment of SMRs will reduce the cost for the pathway to NetZero 2050 in large industry. When comparing GHG reducing technologies, SMRs provide a lower cost option for industry versus technologies like hydrogen, carbon capture utilization and storage, renewable natural gas, and other approaches. Additionally, by adding SMRs to large industry, reducing Canada’s overall GHG emissions can be done for a cheaper cost than if SMRs were not available.
• Across the range of the cost and technical feasibility assumptions tested, SMRs continued to deliver low-cost emission reductions.
• The modelling demonstrated SMRs will become very important after 2035 as more reductions from the industrial sector are needed to achieve net zero, as most other sectors will be abating heavily by this point and industry will need to catch up.

“The research has profound implications around how clean nuclear energy can play a fundamental role in helping Canada meet its 2050 emission reduction goals. Beyond clean electricity generation, SMRs are well-suited in helping decarbonize many of Canada’s high-emitting industries given their ability to generate reliable, carbon-free electricity and heat, with a much smaller land footprint than current reactors. These SMRs are often factory-constructed and modular, which means they are also easily transported to remote or challenging locations. Beyond their practical benefits, the research points to a huge breakthrough in being able to drastically lower emissions for some of the most emission-challenged industries, which are critical to our economy. This is a huge breakthrough in Canada’s fight against climate change.”

About the research

The model used by EnviroEconomics and Navius Research, which has been leveraged by several organizations including the Canadian Institute for Climate Choices and the International Council on Clean Transportation, explored a variety of cost and technical assumptions for deploying SMRs, which are currently in the research and development phase. Across all scenarios, SMRs delivered low-cost emission reductions, driving down the cost of getting to net-zero as a nation. With deployments set to begin as early as 2026, SMRs could be widespread by 2035 as the demand increases rapidly for reductions in the industrial sector. The full study can be found at https://cna.ca/wp-content/uploads/2021/03/GHG-Study-Slide-Deck.pdf and the Executive Summary can be found at https://cna.ca/wp-content/uploads/2021/03/SMR-GHG-Study-Executive-Summary-CNA-March-31-2021.pdf.

About the CNA

Since 1960, the Canadian Nuclear Association (CNA) has been the national voice of the Canadian nuclear industry. Working alongside our members and all communities of interest, the CNA promotes the industry nationally and internationally, works with governments on policies affecting the sector and works to increase awareness and understanding of the value nuclear technology brings to the environment, economy and daily lives of Canadians.