Power lines in Bowmanville, Ont., in March, 2025.Andres Valenzuela/The Globe and Mail
Ontario Power Generation’s plan to construct the first small modular reactor in a G7 country has an official price tag of $7.7-billion – which independent observers say is higher than necessary to spark widespread adoption.
On Thursday, the Ontario government announced that its wholly owned utility can spend $6.1-billion to build the first BWRX-300 reactor adjacent to OPG’s existing Darlington Nuclear Generating Station. It can spend another $1.6-billion on infrastructure such as administrative buildings and cooling water tunnels the new reactor will share with three additional BWRX-300s to be built later.
Those remaining units, which have not yet received final approval, are expected to cost substantially less: All told, the 1,200-megawatt plant‘s estimated cost is $20.9-billion, expressed in 2024 dollars.
The plant, known as the Darlington New Nuclear Project, is being watched closely by utilities around the world, many of which have dispatched representatives to visit the site. The BWRX-300 is a candidate for construction in the United States, Britain, Poland, Estonia and elsewhere.
But the costs published Thursday are higher than what independent observers argue are necessary to attract many more orders. For comparison, a recently completed 377-megawatt natural gas-fired power station in Saskatchewan cost $825-million.
“It’s an eye-popping figure, but not unexpected given what we know about the poor economics of small nuclear reactors,” said Ed Lyman, director of nuclear-power safety at the Union of Concerned Scientists.
“It’s certainly a boutique unit that’s going to produce electricity for a very expensive price.”
Koroush Shirvan, a professor of energy studies at the Massachusetts Institute of Technology‘s nuclear engineering program, said Ontario’s estimates validate previous studies, including his own, which determined that SMRs “will never be able to approach a large reactor” in cost per kilowatt of capacity.
He said that limits SMRs to two purposes: as a first reactor for countries with no previous experience with nuclear energy, or for power grids too small to accommodate large reactors.
Some were more optimistic. Chris Gadomski, head of nuclear research at BloombergNEF, said the cost figures published Thursday were “not horrifying” and could attract utilities seeking to avoid the risks of building larger reactors such as Westinghouse’s AP1000.
“Utility executives are just really scared to death of the company risk involved in a large nuclear project,” he said, adding that Canadians had made “a very, very positive decision” to proceed with an SMR plant.
“I mean, the U.K. and the U.S. are hopelessly fooling around, but you guys are moving.”
High costs, overruns and delays contributed to the decline of nuclear power in advanced economies such as the U.S., France and Canada, all former leaders in reactor construction. The global reactor fleet‘s total generating capacity has been largely flat since the 1990s. Most reactors under construction today are of Chinese or Russian design.
Proposals and memoranda of understanding for novel reactors abound, but very few proposals advance to the point of construction.
“It’s a significant milestone,” said Brendan Frank, director of policy and strategy with Clean Prosperity, who noted the project is backed by a consortium including GE Hitachi, architect/engineer AtkinsRéalis and constructor Aecon.
“There’s a track record. They have the capital.”
The first reactor was to have been completed in 2028, but OPG has pushed that back by one year. It attributed the delay to a construction licence the Canadian Nuclear Safety Commission granted in April, later than expected; the time elapsed between pouring the first concrete and completion remain unchanged.
OPG’s costs are several times greater than Wilmington, N.C.-based GE Hitachi Nuclear Energy originally promised. Early in the BWRX-300’s development, GE Hitachi emphasized it was designing to achieve a specific cost: US$700-million a reactor, low enough to compete with natural gas.
OPG said the government is not funding the project: The utility will pay for it using its own funds, including cash on hand, cash flow from generating stations and debt. The utility added that its estimates include items such as interest paid on borrowed funds, inflation and wage increases over the project’s 10-year duration – factors often absent in figures the Darlington project is being compared against.
The Independent Electricity System Operator estimated the average cost of power from the four reactors at 14.9 cents a kilowatt-hour, contingent on the federal government providing investment tax credits.
The IESO said an alternative would be to build between 5,600 and 8,900 megawatts of wind and solar generators supported by batteries. Their capacity would need to be far greater, it reasoned, to account for the intermittent nature of wind and sunlight, and they would also require far more new transmission infrastructure. The IESO estimated the costs for all that at between 13.5 cents and 18.4 cents a kilowatt-hour. Building the BWRX-300, the IESO concluded, is the lower-risk option.
“They claim it’s the most affordable option, but that’s just not true,” said Jack Gibbons, chair of the Ontario Clean Air Alliance, which opposes nuclear power.
“SMRs are actually the highest-cost option to keep our lights on. They’re going to lead to higher electricity rates.”
Mr. Gibbons’s organization recently commissioned a consultant, Energy Futures Group, to compare levelized costs for electricity from wind, solar and nuclear resources. (LCOE, as this figure is known, measures average costs from a generator over its lifetime.)
OPG expressed confidence it can stick to its schedule and budget. It pointed to its continuing $12.8-billion refurbishment of Darlington’s existing four reactors, a complex project it said remains on schedule and on budget and is expected to wrap up next year. But if overruns do occur on the Darlington SMR, OPG and its partners must cover those costs.
The utility added that 80 per cent of its spending on the project will go to Ontario companies; just 5 per cent goes to U.S. companies, primarily GE Hitachi for its design and development work.
Clean Prosperity’s Mr. Frank said cost is not the only consideration for utilities and politicians shopping for power plants.
“Reactors are a geostrategic asset,” he said. “They enhance energy security, they anchor regional economies.”