There were a couple of interesting updates on the Atomic Energy of Canada Ltd. saga in the Globe and Mail yesterday, one about Ontario Premier Dalton McGuinty urging the federal government to postpone a planned sale of AECL until a deal is struck to sell reactors to Ontario, while the other was about the lack of international interest in AECL’s nuclear business and how, as a result, it will become a niche player in the market selling older, smaller-scale reactor technology and doing refurbishments for the existing AECL fleet.

I put “become” in italics because I’ve always considered AECL a niche player, so the better word is remain. There’s this thinking in some Canadian circles that AECL is being held back from becoming a big player in the international scene, like it’s some washed-up boxer that “coulda been a contender!” But AECL’s chance at international stardom faded some time ago, and the thought that Ontario buying two Advanced Candu Reactors will suddenly make it a contender in the global nuclear marketplace is ridiculous. How can AECL deliver on a new, unfinished design when it can’t even get its old finished designs right? Two Candu refurbishment projects under way in Canada are way over budget and way behind schedule. I remember Bruce Power chief executive Duncan Hawthorne telling the Toronto Star’s Sandro Contenta in 2007 that the refurbishments at Bruce were ”a destiny issue for the industry” and that “the failure of this probably means that we wouldn’t want to do it again.” Now that project is two years delayed and $2 billion over budget, as we learned earlier this month. It boggles the mind why the Ontario government would still seriously consider a new reactor purchase based on the poor track record of this technology, which continues to this day, and it’s no surprise the federal government doesn’t want to backstop it given how much of taxpayers’ money it has already put at risk. Nor does Bruce Power, one of only two groups (both Canadian) willing to bid for AECL’s reactor business but unwilling to shoulder risk in such a deal.

Can we stop with this nonsense that AECL is a gem that only needs to be cleaned and buffed to prove its worth? Yes, it has talented, hard-working people working for it, but that doesn’t mean it has the right technology nor does it mean, just because it’s Canadian, that an unsuccessful technology should be perpetually put on public crutches. This is not the Avro Arrow all over again, as some contend. That’s because the Avro program didn’t have a history of overruns, didn’t have the MAPLE reactor fiasco, or the Chalk River fiasco, or the current-day refurbishment fiasco, or the unfinished ACR development project that has proven itself as nothing but a sinkhole for taxpayer dollars. This is a company that has consistently failed to prove its worth in a world that’s quickly blowing past it. If it dies, it dies on its own sword, just as any other company would if it were in the private sector.

This isn’t an anti-nuclear rant. This isn’t even a criticism of Candu’s heavy-water technology, which may be better than more popular light-water technologies but simply failed to get the market excited (read: Beta vs. VHS syndrome). This is just about business, a poorly run business.

The deadline to submit purchase offers for Atomic Energy of Canada Ltd. was last week, and from what we’ve heard so far only SNC-Lavalin has made its bid public. We’ve had an interesting situation here in Canada: a federal government looking to sell the homegrown maker of heavy-water nuclear reactors, and an Ontario government looking to buy at least a couple of nuke reactors. Ontario says the price so far is too high and, besides, it doesn’t want to do any deals with AECL — its preferred partner, apparently – while its future is so uncertain. Only when the feds deal with AECL’s ownership issues will Ontario get back into serious discussions, so I’ve read. The feds, meanwhile, have blamed Ontario’s decision to delay a purchase on the difficulty of finding a private buyer for AECL. Who, after all, wants to buy a company that can’t sell it’s latest and greatest product on its home turf?

Now we know that Canadian engineering giant SNC-Lavalin wants to take control of AECL. Personally, I don’t care who owns the thing as long as taxpayers aren’t on the hook for its future losses and liabilities. The question, at least for the scientists who have built their careers at AECL, is whether the new controller cares about Candu intellectual property, advanced reactor designs, and staying in the game with the big boys of nuclear — i.e. Westinghouse, GE and Areva — or simply wants to milk the company’s pipeline of refurbishment opportunities as previously sold reactors around the world reach their mid-life crisis. SNC-Lavalin is an engineering company. It just wants work and it wants profits. It doesn’t really care, as a matter of national pride, if we build AECL’s next-generation Advanced Candu Reactor. It’s just as happy fixing up old Candu 6s and building new Candu 6s in developing countries just getting into nuclear and which don’t need the mammoth reactors being pitched by the competition.

Here’s a little anecdote: When Linda Keen, former head of the Canadian Nuclear Safety Commission, required that the Candu 6 design after 9/11 be improved to handle major impacts, like from an airplane, SNC-Lavalin had a shit-fit. Back in 2006, Ontario Power Generation was more interested in building a Candu 6 than an Advanced Candu Reactor. The Candu 6 was a known design, had previous approvals, so in the minds of SNC-Lavalin — which was part of the Team Candu build consortium — constructing a Candu 6 would be a cakewalk compared to getting approval for a new design. Keen apparently deflated those hopes. In her view, it was SNC-Lavalin more than AECL that was gunning for her dismissal. Here’s a quote from Keen from an interview I had with her in July 2009 in which she discusses SNC-Lavalin’s reaction to Keen’s decision. This part of my interview has never before been published: (more…)

I have a story in today’s Toronto Star that pegs the price of two 1,200 megawatt ACR 1000 reactors from Atomic Energy of Canada Ltd. at $26 billion, including all balance of plant costs. That would put the cost at $10,800 (Canadian) per kilowatt, far beyond previous projections. Really far. The story was based on information supplied by sources close to the bidding, including one directly involved on a bidding team. It also found that the Areva bid — involving two 1,600 EPR reactors — came in at $23.6 billion, or roughly $7,400 per kilowatt. It was deemed non-compliant, however, likely because Areva wouldn’t guarantee the price (which explains the lower price, maybe?).

I can understand the Areva price (apparently it’s based on a similar bid for a plant being planned in Maryland), but like many I’m personally shocked at the high amount of the AECL bid. Yes, I wrote the story but like many have a difficult time believing such a high number. My sources, however, are quite credible.

I’ve yet to get any reply from the government or industry that denies or confirms these numbers. Premier Dalton McGuinty was scrummed by reporters earlier this morning and he didn’t refute the numbers, saying only that the process is confidential. McGuinty could have said something general like “The numbers are far off” or “Not even close” to dispute the article, but he didn’t. The $26 billion figure, by the way, almost completely consumes the budget for Ontario’s 20-year nuclear expansion strategy, as estimated in 2007 by the Ontario Power Authority. That budget was to cover a new build at Darlington and at least two refurbishment projects.