The nuclear energy landscape in North America is currently undergoing a significant transformation, with both the United States and Canada taking steps to strengthen their nuclear capabilities. From the revival of uranium enrichment in the US to Canada’s newfound embrace of nuclear financing, the region is on the brink of a nuclear energy resurgence.
Breaking U.S. Nuclear Dependence
The US uranium enrichment sector is poised to receive a substantial $2.7 billion injection as part of a government funding bill. This move is strategically aimed at reducing the country’s reliance on nuclear fuel imported from Russia. Proposed by the White House, this funding is a crucial component of President Joe Biden’s broader plan to source enriched uranium directly from domestic suppliers. The ultimate goal is to reinvigorate nearly dormant US capabilities by creating a guaranteed market for American-made nuclear reactor fuel.
This initiative coincides with potential legislative measures to restrict imports of enriched uranium from Russia. The NO RUSSIA bill, officially known as the National Opportunity to Restore Uranium Supply Services In America Act of 2022, seeks to eliminate Russia’s influence from the US uranium market. The provision of enrichment funding is contingent upon implementing restrictions on the importation of enriched Russian uranium. The fund stems from a credit program for domestic nuclear reactors established in the bipartisan infrastructure law of 2022.
The allocated funding is specifically dedicated to nurturing a market for domestically produced enriched uranium. This uranium is essential as fuel for the US fleet of over 90 nuclear reactors, as well as for highly enriched uranium used in emerging advanced reactor technologies, a sector currently dominated by Russia. In a significant milestone, in December 2023, the US granted approval for a groundbreaking nuclear reactor developed by Kairos Power, marking the first such approval in over 50 years. The California-based startup has been granted a construction permit by the Nuclear Regulatory Commission (NRC) for its Hermes demonstration reactor in Tennessee. This novel reactor utilizes molten fluoride salt as a coolant, a more efficient technology compared to conventional water-cooled nuclear reactors.
The NRC has also granted certifications to other innovative nuclear developers, including NuScale Power and Centrus Energy Corporation, in collaboration with the Energy Department. Most of these initiatives involve small nuclear reactors (SMRs) with a capacity of under 300 MWe. These developments signal a shifting regulatory stance towards innovative approaches to nuclear power generation in the US.
Financing the Canadian Nuclear Renaissance
In Canada, the federal government has made significant changes to its green bond programs by allowing the financing of nuclear projects. This move has garnered initial support from investors for this energy source. Notably, about 15% of Canada’s electricity is generated from nuclear power, with most of the 19 reactors located in Ontario, providing 13.6 GWe of power capacity.
Both the federal government and the province of Ontario have issued a combined C$5.5 billion or US$4.1 billion in securities. These offerings mark the first under the revised Green Bond Framework, which now includes funding for nuclear initiatives. Previously, the framework did not support nuclear energy financially. While the recent $4 billion issuance by the Canadian government did not explicitly earmark proceeds for nuclear power projects, it emphasized a commitment to nuclear development. Investors have shown strong interest in the 10-year debt offering, with orders exceeding $7.4 billion, nearly double the final amount raised.
Powering Ahead: Canada’s Ambitious Nuclear Expansion Plans
Canada aims to expand its nuclear capacity by developing new large-scale nuclear projects and small modular reactors (SMRs). In 2018, Natural Resources Canada (NRCan) unveiled its SMR Roadmap, outlining a strategic plan for the advancement of nuclear technology centered around SMRs. In February 2023, the Canadian government initiated the Enabling Small Modular Reactors Program, allocating approximately US$22 million to support the advancement and implementation of SMRs.
Another significant nuclear development in Canada is Ontario’s decision in 2015 to approve the refurbishment or lifetime extension of four nuclear units at Darlington and the remaining six units at Bruce (with the initial two units already refurbished). This ambitious C$26 billion 15-year program stands as one of the most significant clean energy initiatives in North America. Bruce Power, an Ontario-based company with plans to construct the world’s largest nuclear power plant, has announced that all future bonds will adhere to green financing principles. The company also introduced the first carbon offset protocol for nuclear generation at COP28 last year.
James Scongack, Bruce Power’s Chief Development Officer, highlighted that investor demand for green securities is shaping their future fundraising strategies. He emphasized that all future bonds funding nuclear projects will adhere to green bond principles, reflecting a growing acceptance of nuclear power as a means to decarbonize and enhance energy security. This shift in green finance underscores the evolving role of nuclear energy in Canada’s sustainability efforts.
By embracing nuclear power, both the US and Canada are leading the way towards a more sustainable energy landscape while enhancing energy security.
