Struggling abroad, AECL says it’s found new hope

Shawn McCarthy
Globe and Mail
September 5, 2007

Stung by criticism that it is being left on the sidelines of a global nuclear resurgence, Atomic Energy of Canada Ltd. (AECL) yesterday trumpeted an agreement with China and Argentina to co-operate in building new Candu reactors in the three countries.

AECL and Nucleoelectrica Argentina SA recently agreed to begin commercial negotiations for the construction of a Candu 6 reactor, which would be similar in design to the most recent ones constructed at China’s Qinshan project.

AECL chief operating officer Ken Petrunik said the initial co-operation would concern the new Argentina project.

Critics have suggested that AECL was left alone as its global competitors engaged in a round of amalgamation, with heavyweights like General Electric Co. merging its nuclear business with Japan’s Hitachi Ltd., and Westinghouse Electric Co. LLC joining forces with Mitsubishi Electric Corp.

In an interview yesterday, Mr. Petrunik said the Argentine-Chinese-Canadian partnership is not as formal as those other joint ventures, but is “an important step in the road.”

He said he had joined an Argentine delegation that had travelled to China to examine the Qinshan project, which is rated as one of the most efficient reactors in the world. From those meetings, the plan for a partnership developed and a memorandum of understanding was signed on Monday, he said.

“Working closely with the two other parties, CNNC is interested in exploring co-operative efforts regarding various aspects of future Candu projects, such as the new build in Argentina,” Kang Rixin, president of China National Nuclear Corp., said in a statement released by AECL yesterday.

The China National Nuclear statement said the three partners would look at the potential to work together “in design, manufacture, construction and operation of Candu nuclear plants in Argentina, Canada and China.”

AECL’s critics and competitors have claimed the federally owned corporation was in danger of being shut out of China’s future expansion plans because it relies on heavy-water reactors, while China’s recent purchases have been light-water.

Mr. Petrunik said this week’s agreement does not commit China to future Candu purchases, but signals a continuing interest in the Canadian technology.

“The senior minister in China said the door remains open for AECL,” Mr. Petrunik said.

“The Candu has some unique advantages, including the ability to burn different types of fuel, and so we’re looking at how the unique features of the Candu can be part of the Chinese nuclear infrastructure.”

Unlike light-water reactors, the Candu has the ability to use a wide range of fuel sources, including reprocessed waste from other reactors. AECL sees that capability as a key competitive advantage in a market where concerns are growing about secure sources and rising prices of raw uranium.

He said AECL’s formal partnership is grouped under the rubric Team Candu, and includes SNC-Lavalin Group Inc., Babcock & Wilcox Canada, and GE-Hitachi Global Nuclear Canada Ltd., whose parent is a global competitor.

Norm Rubin, a researcher with Toronto-based Energy Probe, said AECL has been a drain on federal taxpayers for years, and typically oversells its prospects in order to keep the subsidies flowing.

“Prospects are prospects, and AECL’s record at turning prospects into reality is abysmal,” Mr. Rubin said.

This year, the Crown corporation received $104-million from the government to support its research and development effort, but it earned revenue of $533-million in the past fiscal year – including $390-million just from retubing and refurbishing work alone.

That’s up from $320-million in revenue in the previous year.

The federal government, meanwhile, is reviewing its ownership of AECL to determine whether it should maintain its Crown corporation status or privatize it or sell it outright.

Mr. Petrunik insisted AECL has had a successful run in recent years, and remains a small but viable competitor in the global marketplace.

The company has undertaken work to refurbish Candus in Romania and Argentina, and has commitments from both countries to negotiate a commercial deals for new Candu reactors.

The corporation is also conducting a feasibility study for the New Brunswick government on adding a reactor there, and has submitted proposals for new reactors in Ontario.

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