This year, the federal government has made apparent its enthusiasm for the nuclear industry’s latest dream – small modular reactors (SMRs). Following up on an SMR “Action Plan” released last July, it recently provided a $20-million investment to an Oakville, ON-based company to bring the reactors to the market. But Ottawa’s enthusiasm may be unjustified. SMRs face more than a few significant challenges – economic and environmental – along with the more fundamental consideration that they don’t actually exist yet in Canada.

SMRs are intended to be much smaller than conventional nuclear power plants, small enough to potentially be constructed at a central location and shipped to their intended destinations. Atomic Energy of Canada Limited (AECL), which hasn’t sold a new reactor in decades, sees SMRs as potential replacements for coal-fired power plants and as energy sources in remote locations.

The New Brunswick government has entered into agreements with companies from the U.S. and U.K. to develop SMRs next to the existing NB Power nuclear generating station at Point Lepreau, located on the northern shore of the Bay of Fundy. The Point Lepreau facility is Canada’s only operating nuclear plant outside of Ontario.

In addition to financial support, the federal government has already exempted the still-to-be-designed SMRs under 200MW capacity from the environmental review requirements of the recently adopted Impact Assessment Act. Even larger units may escape review if they are on the site of an existing nuclear plant.

But the federal government may be getting far ahead of itself on the SMR concept.  The much-touted SMRs at the centre of its plans are nonexistent, even at a meaningful design stage.

Smaller nuclear reactors – none of them designed or built in Canada – have been used in highly specialized applications, most notably nuclear-powered submarines and a few mostly military or quasi-military ships. These applications have involved extreme requirements and situations where costs (and environmental considerations) are secondary factors.

The federal government’s key selling point for SMRs is that they are a potential low-carbon energy source specifically one that avoids one of the major problems associated with conventional nuclear power plants — that they were too large and inflexible to meet smaller-scale energy needs.

Nuclear power facilities have traditionally come only in one size – “extra large” – and have been associated with up-front capital costs in the billions. Their planning and construction timelines stretch over decades. They also tend to have profound lock-in effects, dominating and defining whatever energy system they are added to, and pushing out potentially safer and cheaper alternatives.

These outcomes have been clearly witnessed in Ontario over the past few years as the province doubled down on its nuclear commitment, attempting to refurbish the Darlington and Bruce nuclear facilities. A range of other options such as energy efficiency, renewables and hydro imports from Quebec, have been pushed to the margins in the process.

Beyond the potential advantage of some degree of scalability, SMRs otherwise have all the problems of conventional nuclear facilities. Virtually all recent attempts at construction of new nuclear facilities in the United States and Europe have proven hopelessly uneconomic, even with major government subsidies, as well as partial or complete public assumption of the liabilities for waste management, decommissioning and accidents. The economic prospects for SMRs are no better. Preliminary estimates of SMR costs put them 10 times higher than competing technologies in similar applications.