Canadian Electricity and the New Nuclear Strategy
This week, our guest is Mike Law, former president and CEO of the Alberta Electric System Operator (AESO). Mike now leads MGL Advisory Services Ltd. and advises several companies, including Energy Alberta, where he is head of power system integration. Energy Alberta is proposing a nuclear generating station in northern Alberta’s Peace River region.
The podcast touches on a long list of Canadian electricity policy initiatives, including the federal government’s Nuclear Energy Strategy (June 22) and the Electricity Strategy (May 14). Other policies that are impacting investment and growth forecasts include the Alberta-Canada MOU, the Clean Electricity Regulations (CER), and – specific to Alberta – the new Data Centre Regulation and the Restructured Energy Market (REM).
Topics covered include Canada’s need for new electricity generation to meet growing demand, including from AI data centres; how the CER is creating uncertainty for investment in new natural gas generation; and how Alberta’s REM adds another layer of uncertainty. The discussion also covers Canada’s new nuclear strategy and the plan to build 10 new reactors, including how it compares with the U.S. push toward a similar target. Finally, Mike outlines Energy Alberta’s large-scale Peace River nuclear project, including timelines, regulatory requirements, costs, and stakeholder engagement.
Content referenced in this podcast:
- Nuclear Energy Strategy for Canada (June 29, 2026)
- Powering Canada Strong: A National Strategy for an Electrified Canadian Economy (May 14, 2026)
- Energy Futures: BC Hydro Turns Back to Natural Gas to Help Fill Electricity Gap (June 1, 2026)
- Alberta Data Centre Regulation (June 9, 2026)
- CBC: Power plant proposed for area northeast of Edmonton inches closer to becoming reality (June 24, 2026)
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Episode 332 transcript
Disclosure:
The information and opinions presented in this ARC Energy Ideas podcast are provided for informational purposes only and are subject to the disclaimer link in the show notes.
Announcer:
This is the ARC Energy Ideas podcast, with Peter Tertzakian and Jackie Forrest, exploring trends that influence the energy business.
Jackie Forrest:
Welcome to the ARC Energy Ideas Podcast. I’m Jackie Forrest.
Peter Tertzakian:
And I’m Peter Tertzakian and welcome back. Good morning. Well, at least it’s morning for us. It is Monday, June 29th. This is the week that we lead up to Canada Day. It’s the week that we lead up to the stampede in Calgary. And well, it’s still not the lead up to summer it seems here, but I look at the forecast and it looks like the rain is going to sort of fade away over the week and certainly next week looks pretty darn good.
Let’s take a quick check of the temperature of the Strait of Hormuz as we do. The temperature as indicated by the price of oil is in the US $70 range for WTI. It’s trending down by the end of the year and into next year, into the $65 range. So at least for now, things have cooled down. This story is far from over in my opinion. There’s more to come and the ramifications of this incident are going to be far-reaching.
But as I think we’ve said last time, we’re sort of fatigued talking about the subject and we sort of want to move on. So Jackie, I’d like to talk about electricity and nuclear power.
Jackie Forrest:
Yeah, and there’s been lots of news around that in Canada. So I just want to give some highlights of some of the recent announcements from the Canadian government. June 22nd, the Government of Canada launches a nuclear energy strategy. And I’m just going to give some highlights in terms of the pillars of that. One is grow inside of Canada, our nuclear generation, and use the modern CANDU design. So that’s the Canadian owned proprietary nuclear technology.
Peter Tertzakian:
Yeah, it goes back 50, 60 years.
Jackie Forrest:
Yeah, and we were real leaders back then. The idea is could we reinvest some money in a modern CANDU design? And the gold have 10 new reactors by the 2040s, either under construction or under development. And also they want us to participate with these small modular reactors like the one going into Ontario right now with Ontario Power Generations, but also develop the fuel needed for those units. So the CANDU, what’s unique about it, it doesn’t need enriched uranium.
And so we can actually process and create the fuel here in Canada. But these SMRs like the one in Ontario, we don’t have the ability to create the fuel. So can we develop that whole fuel system? They also want to export the CANDU technology to other countries. Of the existing fleet, 17 are in Canada, but there’s actually nine operating abroad. So can we get more of our technology out into the world? Want to do things like grow our uranium production, support waste management, advanced next gen technologies, including even fusion, Peter.
Peter Tertzakian:
Right.
Jackie Forrest:
So something we’ve talked about on the podcast a few times. So that’s kind of like a high level summary. I do encourage people to read it. I’ll put a link to it, but I did want to contrast it to what the Americans-
Peter Tertzakian:
The United States, yeah. They’ve got 10 reactors or something on the way.
Jackie Forrest:
Yeah. I mean, they have the same goal, 10 new large reactors. Theirs is a little sooner. They want construction by 2030 and operating by 2035, but it is a little different in a few respects. First of all, the US announced just last week, 17 and a half billion dollars in loans for these 10 new large reactors to go ahead and buy the long lead items. Also, the Americans are prioritizing just one technology, the US Westinghouse AP1000 technology with the idea that if we do this over and over again, we’re going to get the benefits of standardization and we’re going to get lower and lower prices.
I would contrast that to Canada where it doesn’t … We’re talking about the candy, but we’re also open to SMRs and we’re open to creating a whole new fuel system. So I wouldn’t say-
Peter Tertzakian:
And we’re not giving 17 and a half billion dollars.
Jackie Forrest:
Yeah. Well, I mean, the document did talk about providing financing, but no numbers, no kind of commitment of capital right now to help purchase long lead items, things like that.
Peter Tertzakian:
It’s interesting you say 2030 for a while, for a long while. 2030 seemed like a long way out, but actually here we are at the end of June. So it’s actually three and a half years away. That’s not very long to construct 10 nuclear reactors.
Jackie Forrest:
Yeah. Well, I saw Chris Wright, who’s Secretary of Energy at CERAWeek, he is all about trying to push forward nuclear. And so, I think this is part of the US fast tracking projects of their national importance, and nuclear is one of them. So I like the fact that Canada is putting that forward. We certainly have the technology with the CANDU that’s unique to us, but I do think there’s a lot we’re trying to do in that document and for a country our size, maybe a little bit more focused as they kind of start working on the details would help.
Peter Tertzakian:
Well, nuclear is under the broader umbrella of electrification. So we want to talk about that and who better to talk about that than someone we’ve had on our podcast before. So want to welcome our special guest, Mike Law, the former president and CEO of the Alberta Electricity System Operator, otherwise known by the acronym of AESO. Welcome back, Mike.
Mike Law:
Excellent. Well, thank you, Peter and Jackie. It’s great to be back.
Peter Tertzakian:
Yeah. No, you were the former presidency of the AESO system, but you’re now an advisor of many ventures. You’re involved with a number of companies, including a nuclear one, which we’re going to talk about. So tell us what the situation in Canada is now.
Mike Law:
Canada overall has shifted from being a net exporter of electricity to an importer over the last few years and there are a couple of big drivers behind that. They differ slightly by jurisdiction within Canada, but fundamentally, the demand expectations within the country have changed dramatically. There’s been this broad expectation and push of electrification across the economy and the industrial environment.
But then as we look forward, the real big driver of AI and data centers, which has structurally changed the forward expectations of demand growth.
Peter Tertzakian:
Those are the expectations.
Mike Law:
Yes. Yes.
Peter Tertzakian:
We haven’t really built any big data center yet.
Mike Law:
No. So I think there’s two pieces to this. There’s the fact that we are seeing an expected change in demand, but then on the generation side, we’ve had the clean electricity regulations that have been sort of hanging over the industry for a number of years now that have really put the brakes on natural gas generation in the country. There’s been a focus on renewable intermittent development, which is great and it’s an important part of our portfolio, but it doesn’t provide the capacity requirements that real industrial and economic growth require.
So as you put those two things together and then also, recognize that the time horizons to build new generations have really expanded because of the length, the lead times associated with the equipment, with the permitting processes, et cetera. When all those come together, we’ve created a bit of a squeeze where demand has moved in one direction and effectively our ability to deliver the generation has really slowed down over time
Jackie Forrest:
We used to be viewed as this huge country with all this hydro and we have excess electricity and we’re sending it to the US and according to data, it showed that in the end of 2025, we’re net importers of electricity. And as you say, across the country, there’s procurements underway as system operators are saying, “Whoa, we need more generation and we need it quickly.” So the electricity strategy, what is it doing, do you think, to help accelerate the development of generation?
I mean, it had a goal of something like doubling our electricity generation and infrastructure by 2050. Is that achievable and does that strategy help us?
Mike Law:
Yeah. I mean, I think there are a number of things to like about the electricity strategy. I think the key is that it is really putting a focus on what the country and the economy requires to grow and meet the overall needs. That’s sort of doubling of the generation, doubling of our capacity within the country.
Peter Tertzakian:
By when?
Mike Law:
By 2050. And again, that ties together with a lot of the other documentation, the MOU with Alberta also has a 2050 expectation with respect to working towards doubling Alberta’s grid, et cetera. So they’ve really come on as a 2050 date as being a real focus with-
Peter Tertzakian:
So we have to double in 23 and a half years, what we’ve built in 123 years.
Mike Law:
That is the way it’s framed. I think we want to be careful about being too specific and prescriptive around that doubling. I think it’s a high level number. We really want to grow the electricity system, the generation, the transmission, and the infrastructure significantly. And I think saying doubling is that sort of big aspirational number.
Jackie Forrest:
Okay. Well, let’s talk about natural gas. I want to get into the CER later, but I did notice in early June there was an article and I’ll put a link to it in the show notes. BC Hydro turns back to natural gas to help fill the electricity gap. In BC, they have this clean BC plan that talked about no natural gas power. So you talk about one of the issues here in Canada is we want to grow, but we don’t want to grow with natural gas. And BC has been a real leader in wanting to only grow with clean power.
And they actually have procured quite a bit of renewables over the last several years to help them fill the void that’s coming because their hydro is not meeting all the demands as it used to. So what do we take from this? Is BC Hydro admitting that they need natural gas?
Mike Law:
I don’t think they’re actually admitting that. I think the reality is that yes, they see a capacity shortage in the near term and it makes complete sense to utilize the steel that’s in the ground. So recontracting existing units to me makes logical sense. I think the big question for BC is whether it’s going to lean back into new natural gas to meet its capacity requirements as it looks forward. And that’s a much bigger step and a much bigger shift in policy.
And I think they’re in that environment of testing public opinion at the moment, the announcement a few weeks ago with respect to investigating site E, et cetera, I think those trial balloons are being floated now in BC to allow them to sort of understand what’s possible, what public reaction is going to look like, et cetera.
Peter Tertzakian:
So isn’t the ultimate test of public opinion the price of electricity, and like it going up basically?
Mike Law:
Well, I think that’s one measure that the public is going to use, but I think the emissions intensity is also one that BC is obviously extremely focused on and I think that they’re going to have to try and balance what this looks like.
Peter Tertzakian:
Yeah. I guess in my mind I’m trying to think, okay, we’ve got the big draw on electricity happening. We’re now importers. We’re going to build all these data centers across the country, Alberta, the Western and BC, the Western provinces are somewhat naturals for some of these data centers. Meanwhile, we’re debating what kind of energy source to use to make electricity and the experience in the United States would show that the price of electricity goes up rather rapidly. So is the test of public opinion ultimately going to be a rise in price of electricity?
Mike Law:
So I’ve said this a number of times in various forums. My perspective is that the price of electricity is going to increase regardless of which technologies people choose. And I think we’re also starting to realize as an industry and as a country that we really do need an all of the above strategy, and that growing of the broad electricity portfolio and really learning and thinking about how to optimize how each jurisdiction can really be most efficient in its generation and in its production of electricity.
And then, this takes you into the conversation on interties. British Columbia and Alberta should be working together far more closely on what a much more integrated grid and electricity generation portfolio looks like. BC has fantastic hydro resources, which allows it great flexibility and storage capability within its dams. Alberta has excellent wind and solar generation capability. It has great natural gas, oodles of natural gas, baseload cogen, and as we look forward, nuclear.
Which when you pair those two up, the Alberta and the BC systems, we start to look like a system that is comparable to Ontario. We have flexible hydro, we have base load nuclear and cogen. There’s a great deal of synergy that can be drawn by putting these two systems together more tightly and thinking about them in a much more integrated manner.
Peter Tertzakian:
So if Alberta is going to be the electricity hub, it’s got a lot of natural gas we know and natural gas infrastructure to feed natural gas fired power plants. The long game is nuclear power, which we’re going to come and talk about here in a minute, but on the natural gas side, talk about the clean electricity regulations, otherwise known as the CER, which creates uncertainty. How do you factor that as a variable in whether or not we see Alberta become a big energy electrical power hub?
Mike Law:
What I’ve seen over the last … really, it’s over the last four years or so, we’ve seen this softening of the clean electricity regulations over time. I think the federal government has recognized and admitted that the initial versions of it were problematic. We’ve seen the federal and Alberta MOU, which is effectively starting to soften where that goes depending on where the court case lands and a very clear statement in the electricity strategy, recognizing the importance of natural gas generation to our electricity system overall.
So I think that real policy shift and perspective around natural gas has shifted. So I do think that we’re going to continue to see some natural gas development. It’s going to be tamed in the near term until some of the details around the court case and the clean electricity standards actually get landed. The area where I see it moving the most is going to be in the AI data center environment. The one regulation document that I didn’t mention was the Alberta data center regulation that was actually released very recently about a month ago or so.
And that provides the ISO with the flexibility to allow the bring your own generation construct associated with data centers, but also allows generation that is linked to data centers to not be co-located. So it allows what they call tethering. So you can build a data center in one location and build generation in another, so long as you’re contractually linked. It also allows a timing disconnect between the two.
So you’ve got about three years in which you can lean on the system before your own contractor generation needs to be online. That combination is going to make natural gas generation quite attractive to data centers, especially in the near term, because it’s allowing a speed to delivery that would otherwise not be available.
Peter Tertzakian:
Okay. So where does wind and sun, we have a lot of that as well here in Alberta and batteries. A lot of proponents behind that saying go straight to wind, solar batteries as opposed to natural gas. How do you see that playing out?
Mike Law:
Well, as I say, I believe that Alberta has the opportunity for the perfect portfolio fundamentally. Wind and solar have a great place within an overall electricity system. They provide raw energy and they provide raw energy fairly cheaply. And when paired with batteries, you start to get a little bit more flexibility and dispatchability, but you’re never going to have the long-term reliability and capacity that you get from natural gas or nuclear.
So wind and solar have a place and I think like all portfolios, we have to make sure that we’re balanced as we build this system going forward.
Jackie Forrest:
Okay. Well, and of course, renewables have suffered from the market redesign here in Alberta that has not made it very favorable for renewables. And we’ve seen a real… There’s like no investment in renewables compared to three, four years ago when there was billions of dollars being spent each year on new projects. But I want to come back to this natural gas situation because to me, I like what you’re saying. Yeah, there’s sort of a general trend of softening.
But for someone who wants to develop a very big natural gas generator, I still don’t feel like super comfortable with the future. We’ve got this court case, I don’t know if you have an opinion on how long it’s going to take for the court to decide if this clean electricity rag, which for our guests that aren’t following this closely, it requires carbon capture storage on natural gas plants once they hit 20 years old. And even then, the amount of emissions are so small that technically a lot of people think it’s quite tough to reach even with the unit that’s been designed that way.
And now, we do have the idea of flexibility in the federal electricity strategy talked about maybe opening up some consultation on that. On one hand, I think … Well, I still don’t think we can go ahead with the natural gas investment because of all this uncertainty, but I did notice, and I’m sure you saw the recent news from the Alberta Utilities Commission, that they approved an application by a Greenlight Electricity Centre to build and operate a 1.8 gigawatt power generation facility in Sturgeon County, about 35 kilometers north of Edmonton.
Now, they didn’t go ahead with their final investment decision and I wonder if they need clarity on all this stuff to do that, but we are seeing the interest in natural gas generation, but do you think that to see the potential for Alberta, we need to clarify this stuff and how long does it take?
Mike Law:
Yeah, we definitely need to clarify it. I think that the Greenlight facility is a great example of one where all the pieces are starting to come together, but that ability to make an FID may not be there and I think for two reasons. One is the overhang of the clean electricity regulations and what that might mean. And on the other side, the criticality of having a hyperscaler type offtake deal associated with those data centers is critical to be able to move those forward.
And at the moment we haven’t heard of a definitive agreement with a hyperscaler for that facility.
Jackie Forrest:
Okay. Just before we leave this topic, another barrier to people deciding to build a generation project in Alberta is this electricity redesign, which has been ongoing now for several years. Based on what you know right now, do you think that people could make a decision to invest in power generation in Alberta or is more clarity needed on how that’s going to work?
Mike Law:
Well, I think as with all market redesigns, more clarity is needed. It’s very difficult to make an investment decision if you don’t know truly what all the rules look like. So I think there’s a need for that rule clarity, both in the transmission space, all of the transmission policy changes that are occurring, the market rules, and a number of investors are going to say they want to see the market function for a year or two before they’re willing to pour a billion dollars or more into a new unit.
Now, I generally keep my distance from the REM changes and the design that has sort of transpired over the last couple of years is not what I’d envisioned when I’d originally put the REM recommendation to government a couple of years ago, but I think that overall there’s a bigger challenge associated with electricity markets, not specific to Alberta. I think electricity markets are challenged.
And then they’re challenged because generation technologies have moved to be very high upfront capital cost with very low marginal cost overall or operational characteristics like cogen and nuclear, which effectively run independent of price. And what that results in is a very poor price formation for electricity because everything really wants to run at low or zero cost but needs to recover capital. And whether you’re an energy only market or a capacity market, that structure does not really lend itself to a good well-formed market. I think we’re seeing this across all jurisdictions now.
Jackie Forrest:
Yeah. Well, maybe we have an advantage in Canada with all those Crown Corps, they can finance it differently. Maybe we should move to nuclear.
Peter Tertzakian:
Yeah. I want to move to nuclear, but I also feel like there’s a number of unresolved issues, which actually is the segue into nuclear because nuclear requires the same level of resolution as any other energy source to generate electrical power. These unresolved issues of the market redesign, the clean electricity regulations, the lawsuits and so on, the consultations and we haven’t really even talked about stakeholder issues that… And then your comment about the market and needing to see it work for a couple of years, how does that relate to the previous comment I made that we only have 23 and a half years to double our electricity?
It just seems like time marches on and without the lack of clarity that’s required for a really major push of developing this thing, including the nuclear power, which we’re going to talk about in a minute. But I agree with you that we are in a better state of mind and situation than we were say two years ago in terms of building out energy infrastructure, including electrical power, but it still seems like we’re not moving fast enough and overcoming these barriers to getting stuff done.
Mike Law:
Absolutely agree. I think that there’s still a number of these barriers and you’ve articulated a number of them. When I look at the electricity industry, and it obviously, varies across the country, the Crown Corps that you’ve talked about have an advantage, in that they can make decisions, run procurements and move faster on technologies of their choice and drive to an outcome. So that is one of the challenges that I think Alberta specifically faces.
And I have a personal perspective that I think we’re going to trend towards a contracted environment purely for this reason and that it is the easiest way to drive to a fast outcome, is to effectively run procurements.
Jackie Forrest:
Right. So it doesn’t really matter all this stuff, you’re guaranteed a price for 20 years and that enables you to go for it.
Mike Law:
You’re shifting the risk back to effectively the government or the consumer.
Jackie Forrest:
Okay. Well, talking about the nuclear, this is a big problem because it needs a lot of upfront money and I have a really hard time seeing an electricity only market like Alberta used to have and we’re getting a hybrid of it now that that even works because you’re just getting money for your electrons and if natural gas can generate it cheaper, I don’t know how you get nuclear in Alberta, but we’re going to come to that.
But first of all, do you think the goal of 10 new reactors by about 2040 in this new strategy, do you think that’s an achievable goal?
Mike Law:
Well, I do. And specifically in the way that the nuclear strategy is stated, it is under development or in construction. So already in Canada we have the four Darlington SMR new nuclear project units. One is under construction, the other three would be considered under development. And then as far as large scale units, we have the energy Alberta units in Peace River, Alberta, that’s four large scale units, Bruce’s C development, that’s another four large scale units.
Those would be considered in the pre-development phase. So there’s a number of years to go before they would hit the in development type time horizon. And I would also expect that we’re going to see the announcements out of Saskatchewan and New Brunswick in the not too distant future as they move projects forward.
Jackie Forrest:
I didn’t know those SMRs were each counting. So it’s pretty much already done then if you’re counting those SMRs as unique reactors.
Mike Law:
So long as we can move those forward and actually start to deliver them. Yeah.
Jackie Forrest:
Okay. So what do you think about this CANDU focus? Should the government say from now on, only CANDUs … like the Americans, we need to do this over and over and over again and get it more efficient.
Mike Law:
Yeah. So when you read the nuclear strategy that came out, it’s very clear that the government of Canada is leaning into the CANDU technology. CANDU was mentioned 43 times in that document Westinghouse was mentioned three. So it doesn’t take a rocket scientist to understand kind of where the government is leaning. I think the follow on to that is why are they leaning into CANDU? And nuclear development, you’re not building a power station, you’re building an industry and I think it’s important to recognize that.
And when the government looks at where they want the nuclear industry to be, the nuclear strategy lays it out. It wants us to build units at home, but it wants us to be an exporter of technology and product. It wants us to build the supply chains and the labor force and the skills and be able to export that as well, as well as being able to provide our own fuel and ideally export that fuel, which with Cameco and our natural uranium that we have, puts Canada in a great position.
So there’s a great advantage from the federal perspective to lean into CANDU overall. I’m a big believer in the concept of a fleet. I think that the only way you drive the cost of nuclear down is repetitive construction, but also being able to build your supply chains for scale. You want to be able to go out to procurements and say, “Look, we want 10 of these and we want 10 of these over the next 15 years.”
That’s a very different type of supply chain scaling than to go and ask for an individual item that is custom and you’re going to run a procurement for that and the supper doesn’t have confidence that they’re going to get unit two, unit three, unit four. So you need to be able to build your supply chains for scale and I think that the only way you do that is with the fleet concept.
Peter Tertzakian:
So let’s talk about the supply chain because Canada, like many resources, has the largest deposits and production of uranium in the world, or certainly in the top few producers up in Northern Saskatchewan. The fuel cycle, as it’s called, getting the raw uranium into the reactor, there’s a whole bunch of refining processes. And so, we don’t take it all the way to the end in terms of making fuel rods, right?
And the CANDU reactor, as Jackie said, has got a slightly different fuel cycle, which doesn’t require as much refining, but SMRs do require a different type of refining. So can you just clarify all of that and what it would take for Canada to become much more robust in its fuel cycle rather than having to mine the uranium out of the ground, send it out of the country to refine it and bring it back again?
Mike Law:
Yeah. And I think the real difference is that the CANDU technology uses natural uranium. So it’s mined, milled, refined and fabricated into fuel and that can all be done within Canada. The SMRs and the Westinghouse AP1000 use an enriched uranium and Canada does not have the regulatory license to enrich. So we ultimately need to buy our enriched fuel from-
Peter Tertzakian:
Well, who grants this license?
Mike Law:
Well, it’s the International Atomic Agency.
Peter Tertzakian:
So why don’t we have this license after being in the business for 70 years?
Mike Law:
Well, I think part of it is that up until this point, we’ve only had CANDU technology. My expectation is that there will be an ongoing discussion. It’s obviously one that the uranium side of the business is going to think about is to, at what point does it make sense for Canada to move into the enrichment side? You need to have a large fleet of-
Jackie Forrest:
I think our existing fleet, which I think is 17, is all using CANDU. So we are energy secure and that we can create that fuel here, but now we got this new SMR in Ontario, so it’s the first time we’ve had to rely on it. I think it comes from France and the United States, the fuel. But I’m kind of wondering if we should just go with the CANDU in general because we have the way to make the fuel and we can expand it. One of the things in the document was, yeah, we need to create this whole other fuel supply chain for these SMRs now.
And is that like … Again, we’re a small country. Are we better just to create one thing that works well and do it in large volumes than try to spread ourselves too thin, creating SMRs and a whole new fuel system for that?
Mike Law:
Yeah, I think that’s right. And the nuclear strategy does sort of indicate that it wants fleet-based but under different use cases. So it sort of left that sort of flexibility of saying, “Okay, under SMRs we may have one type. Under large scale we may want to have another type.” In the end, this is going to come down to the deliverability of the technology. Both CANDU and the Westinghouse AP1000 are valid functional technologies.
The Westinghouse AP1000 is being built. It has been built. So, as we like to say, we can count the bolts in a Westinghouse AP1000. We know exactly what goes into it. The latest CANDUs are still on paper and being finalized. The design is not yet complete and that’s one of aspects of the nuclear strategy, is that the government wants to have that design completed by 2030. But when you think about the deliverability of a unit, it’s not purely just a technology choice.
It’s ensuring that you have that supply chain, you have the skills, you have all of those aspects of fuel capability that makes that unit financeable. And ultimately, the ability to finance that unit is what’s going to become critical in the choice. It’s all very well to pick one, but if you can’t raise the money because it’s a first of a kind or that it’s unknown or there’s some challenges, that’s unfortunately going to make it a challenge.
Peter Tertzakian:
Well, let’s talk about raising the money. The United States has committed 17 and a half billion dollars to kickstart their 10 new nuclear reactors. Our federal government, are they committing any sort of volume dollars to building R10?
Mike Law:
Not yet. And I think this is one of the pieces that I think is really missing from the Canadian electricity and specifically the nuclear strategy, is it’s got the right structure, it’s focusing on the right pieces, but it’s not committing to the financial support of these projects. And in fact, has signaled in the nuclear one that they’re working on a draft financing policy for April of 2027. Now, that means a draft policy in April 2027.
We’ll probably have a final policy in about a year. That does not seem like an aggressive approach. The US is putting 17 and a half billion dollars down on long lead equipment. Canada is pushing paper for the next year. That is a problem. And I sort of compare it to Germany when the Ukraine war started. They realized they needed LNG import terminals. They built one in 194 days. That’s aggressive behavior. And I think-
Peter Tertzakian:
Yeah. It just seems like so many countries, including certainly United States, China and others are running a marathon trying to get aggressive buildouts of their infrastructure. And here we are, treating it like a fun run or something.
Mike Law:
There’s not the urgency.
Peter Tertzakian:
It’s just like some-
Jackie Forrest:
Well, maybe we’re running the marathon and they’re sprinting.
Peter Tertzakian:
We’re walking in a fun run. We’re walking in a fun run. Meanwhile, everybody else is sprinting. I mean, this is … in addition to that, we haven’t cleared all the barriers on the fun run. I mean, I don’t want to be so skeptical, but there’s this real sense of urgency here. And if we don’t meet the urgency, I mean, I’m not a believer in the whole doomsday blackout scenarios of electricity and stuff, but I’m a believer that if we don’t synchronize and get this right, the price of electricity can go up because we’re now importing.
So all of a sudden the marginal electrons are produced by someone else notably as the United States. And so, this does not strike me as being very strategic with a lot of foresight.
Mike Law:
Yeah. And I think there’s … as I said, I think there’s a window in the nuclear development world at the moment and we are at risk of missing it.
Jackie Forrest:
Well, Mike, let’s transition to this Peace River Nuclear Project. We didn’t introduce that at the beginning, but you have a role with this. So tell us a little bit about the project that’s being developed, what you’re doing, and what stage of development you’re at.
Mike Law:
Yeah, absolutely. So Energy Alberta is a private nuclear development organization within Alberta and we are in the permitting process for a 4,800 megawatt nuclear site up in the Peace River region. What that is effectively is four large scale reactors that are being permitted for the site. Our expectation is that they will be developed in a phased function. So it wouldn’t be 4,800 upfront. It would be a two pack of units and a two pack of units that would come later.
We are currently working through our license to prepare site, which is the first major license that you go through in the nuclear development process, working with Canadian Nuclear Safety Commission and the Impact Assessment Agency of Canada. So that is the first major license. Once that license is received, you are allowed as a developer to do initial works on the site, move earth around, start looking at utilities and aspects that are not specifically focused on the nuclear plant and the nuclear island.
Following a license to prepare site, you move into a license to construct. That requires the detailed engineering on that site. It requires the technology specific engineering. So you must have chosen your technology by that point, whereas we’re still, I’m going to say technology-agnostic between the Westinghouse AP1000 and the CANDU technology. So our site will be licensed for both and you then move through that license to construct.
Once you reach license to construct, you then have the ability to pour nuclear concrete effectively to build your nuclear aspects associated with the project.
Jackie Forrest:
Okay. Well, we all know that you’re going to want to choose the CANDU, but when you get there, how long from today until you start generating some electricity?
Mike Law:
Well, so the length of time on permitting of nuclear is … it’s a journey. Licensed to prepare site is four plus years, license to construct is two to three years. There is the ability to run some of those in parallel and then you’re into a construction period and you’re easily in six plus years for the construction. So first energy out of Peace River plant is going to be in the late 2030s, 2036, seven, eight in that type of timeframe. It is a journey and we are starting down this path.
Peter Tertzakian:
And there’s a whole series of regulations that are needed for safety, security, cybersecurity, treatment of the waste and all that stuff. In Ontario, the province that has the most amount of experience with nuclear, they have this regulatory infrastructure. Does Alberta have regulatory infrastructure in terms of operations and everything else that goes along with running a nuclear power plant and the fuel handling?
Mike Law:
So the majority of nuclear regulatory oversight is federal. So the CNSC is our lifecycle regulator and they oversee all of the nuclear aspects of that facility from initial permitting, right through to decommissioning and site abandonment in a hundred years time. So that is all in place. There is a requirement obviously at a local level to have that emergency preparedness, et cetera, in place and that still has to be developed in Alberta.
That’s part of the process that we work through with governments, local governments, et cetera, in order to ensure that all of that is in place. However, the vast majority of the regulatory oversight is actually in place already and it’s federal. We also are working very closely with the other nuclear operators within the country. So we have an MOU with Bruce Power, where we are working together, swapping information and data and the nuclear community is very collaborative.
So all of the nuclear entities within the country come together on a very regular basis and discuss aspects of mutual interest, whether it’s regulatory efficiency, whether it’s changes, whether it’s safety, et cetera. Because quite frankly, in the nuclear industry, a failure of one is going to be a failure of the industry. It’s not something where a failure of one can be hived off and it’s not going to affect everybody else.
Peter Tertzakian:
Well, let’s talk about the cost because there’s certainly the perception that nuclear power is very expensive relative to the alternatives. It’s very capital cost heavy. In other words, building the nuclear reactor upfront is very concrete steel and otherwise expensive. But once you have it built, then actually the fuel cost is very small relative to the overall cost.
So this is very much a long term proposition in terms of how the cost is amortized over the long term, yet in the near term, there’s reticence to put all the money in the upfront building of these things. So how are the governments thinking about that, federal, provincial, and even yourselves and you being involved in this project by Peace River?
Mike Law:
You’ve framed it very well. And the comparison that I actually like to draw is to the oil sense, very high upfront cost, but then a much more stable, long term, lower cost operation overall. From a cost perspective, and I think it’s easy to talk about a few numbers in Ontario, the SMRs, 1200 megawatts, if all four of them are built out, estimated cost 22 billion dollars, something like that, which kind of looks at a overall levelized cost of electricity of somewhere around $150 a megawatt hour.
Now, the cost of that is one of the reasons why we’ve gone with the large scale reactor, because there is a cost efficiency with large scale. So in comparison to that SMR project, two large scale reactors in Alberta will be almost double the capacity. So there’ll be 2,200 megawatts, somewhere in that range and at a capital cost of somewhere between 25 and 30 billion dollars. If you do the math on that, it takes that … Also, we back down to about 100 to $110 a megawatt hour.
But that’s a 60-year cost and that’s very different than saying a $80 cost or a $70 cost for electricity, but over the next 20 or 30 years. So you’re building in a real stability into your electricity cost structure that is highly beneficial, especially in a province like Alberta where we’ve seen such swings in price.
Jackie Forrest:
Except that in Alberta, and I know we’re still seeing the new market redesign, you’re only getting paid for your electricity price. So that’s a pretty big risk to take for someone to build a big nuclear plant and just wait and see what the price will be.
Mike Law:
And I think it is very important to sort of be clear no nuclear plant is built based on a market construct. So I’ve been asked a number of times, do I really worry about what the REM is going to look like? Would I prefer a capacity market? The answer is it doesn’t actually matter to a nuclear plant because you don’t build it based on hourly, daily, weekly, or yearly pricing. You build it on long-term contract structures.
So as part of your development process, you are looking at building those long-term offtake deals and the financing structures that are going to ultimately allow that FID decision.
Peter Tertzakian:
Well, it’s also like you’re building it on the premise of a long-term benefit to the society. What is the price of that and the cost of … This is not just about price of electricity and returns and LCOE and blah, blah, blah. I mean, this is about creating long-term backbone infrastructure. And so, I would argue I’m just saying this, but I’m pretty sure I’m right, every other country is subsidizing or financing their nuclear and broader electrification backbone.
And now with the US plan, 17.5 billion dollars. So here in Canada, we seem to be reticent to offer these kind of things for the benefit of the country, right? Because this is the world we’re in now. I’ve argued this until I’m blew in the face on this podcast that we’re in a new world. And so how is this going to be reconciled? Because I personally feel that if all you do is run spreadsheets and try and make this work, it ain’t going to work.
Mike Law:
No, I absolutely agree. No nuclear facility is developed anywhere in the world without government support of one type or form. But I think what we need to recognize is that the capital that’s deployed when you build a nuclear facility is truly an investment. You are much like, I would say the only other generation technology which has similarities to it is large scale hydro. About 90% of the invested capital remains in the jurisdiction.
So if you spend 10, 20, 30 billion dollars, the greatest proportion of that stays within Canada. It creates jobs, it creates supply chains, it creates GDP outcomes, and it creates tax revenues for government. So that is very different than writing a check to China for solar panels. Capital investment, they’re not all the same and nuclear is about building an investment within your country.
Peter Tertzakian:
For the long term, and I should point out that we have hydroplants in this country that are over a hundred years old that are still generating power.
Mike Law:
Absolutely. And we’ve got nuclear plants that are 60 plus years, they’re being refurbished and they’re going to make it to 80 or 100 years.
Jackie Forrest:
Okay. Well, you convinced me that in Alberta, it would kind of be the same timeframe as Ontario technically, but one issue is people in Alberta are not used to nuclear. How has it been with your community engagement in the Peace River area and how are people feeling about getting a brand new nuclear plant, first one outside of … or west of Ontario?
Mike Law:
Yeah. So we’ve been doing significant community engagement up in the Peace River Area and as you rightly point out, the Alberta population is not highly familiar with nuclear overall. So a significant amount of what we do is education around nuclear, nuclear plants, all of the various aspects and specifically talking about what are … I’d say often the biggest questions or concerns, which are safety, water and waste. Those three become sort of your top areas of concern together with societal impact.
So what is it going to mean to have this number of people suddenly moving to and living in the peace region? What is it going to mean for our social infrastructure, schools, hospitals, et cetera? So working through those kind of conversations with the stakeholders in the region and that has been ongoing now since 2024. We’ve had significant number of open houses and engagements with the general population and stakeholders of the peace region as well.
As you would expect, they are always questions and they’re good and valid questions where people are looking to understand. But I would say one of the very interesting and important aspects is that the questions people are asking are questions to truly understand what does this mean? What does it mean to my community? What is the impact, et cetera. It’s not a negative reaction now. So we’re seeing quite a positive response from the region overall.
Peter Tertzakian:
Well, we covered a lot of issues, Mike. Thanks so much for joining us. We’ve talked about the need to … Well, it’s more than a need. I guess it’s an edict almost by the federal government that we want to double our electricity generation by 2050. We want to create interties across the country. The imperative is because of data centers, general electricity demand growth. And something that I think a lot of us haven’t thought about a lot is that we are now electricity importers.
Which means that we’re so much hostage to what the price could do in the future. Yet we have the enviable position that we have almost every resource under the sun, including the sun to generate electricity here. And I’m struck by your comment that we have all of the resources to make an ideal portfolio, particularly out here in the west and the western provinces. And we discussed that nuclear is a backbone electricity generator.
Canada has historically been a leader with its CANDU technology. There is the imperative to build 10 new nuclear reactors here. And we concluded that this is an investment, not an investment necessarily in financial terms, but an investment for the country and its future. And so thanks for sharing your insights. Although I seem to have woken on the wrong side of the bed, looked out the window and it was pouring rain, which made me a little bit cranky. I’m generally a nuclear reactor, half full kind of guy.
And so thanks for again, Mike Law, you’re the former head of the AESO here in Alberta. You’ve got your own advisory firm. You’re involved in a lot of ventures, I think it’s MGL Advisory Services. So thanks again for joining us and helping to turn the lights on, on this important subject of nuclear power and electrification.
Mike Law:
Thank you. It’s been a pleasure to join you.
Jackie Forrest:
Thank you, Mike, and thanks to our listeners. If you enjoyed this podcast, please rate us on the app that you listen to and tell someone else about us.
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