John Spears
Toronto Star
January 18, 2005

Atomic Energy of Canada Ltd. says it will concentrate on developing a larger version of its next-generation nuclear reactor after being knocked out of a crucial race to have its technology licensed in the U.S.

AECL was dealt a heavy blow Friday by Dominion Resources Inc., which decided not to use AECL technology in its pursuit of a licence for a new Virginia nuclear power station.

Dominion had assembled a group including AECL, Bechtel Power Corp. and Hitachi America Inc. for the project, and had been selected by U.S. regulators to move through the complex five- or six-year process of obtaining an operating licence.

Getting the technology licensed in the U.S. would have opened the U.S market to AECL for the first time. And it would have given AECL a boost in marketing the reactors in Ontario, where the current fleet of reactors is rapidly aging.

AECL is "clearly disappointed with Dominion’s decision," chief executive Robert Van Adel said in a statement.

It was a sharp contrast to his mood two months ago, when the Dominion-AECL group had been selected to start the licensing process.

"It’s in our view a huge win for us, in the sense that we’ve established ourselves as the leading next-generation technology in North America," Van Adel had told the Toronto Star at that time. He had predicted the decision would have a "huge impact" on AECL’s prospects for marketing the technology elsewhere around the globe.

The Dominion-AECL group was in line to receive up to $250 million (U.S.) in funding to assist it through the complex technology licensing process in the U.S.

The drawback to the plan was that AECL’s nuclear technology has never been licensed in the U.S.

Company spokesperson Dale Coffin said Dominion discovered that using AECL’s technology would likely lengthen the licensing process.

"They won’t use our technology because of the timeframe," he said in an interview.

Dominion is now looking for a new technology partner for its consortium, he said.

AECL has just completed a major project in China, but has been actively looking for new opportunities including the U.S. partnership.

"I think it’s fairly big for AECL," Tom Adams, executive director of Energy Probe, said of the new setback.

"They’ve always wanted a presence in the U.S. market. It’s been on their to-do list for 20 years."

The new reactor comes in two sizes, one of 750 megawatts and one of 1,200 megawatts; the smaller sized reactor had been picked as the candidate for the licensing process.

With the U.S. licensing opportunity off the table, AECL will turn more attention to developing the 1,200-megawatt reactor, Coffin said.

In Ontario, reactors range in size from the just over 500 megawatts at the Pickering nuclear station, to nearly 900 megawatts at the Bruce B and Darlington nuclear stations.

Duncan Hawthorne, chief executive of Bruce Power, had questioned AECL’s decision to pursue the smaller reactor.

In an interview last fall, he noted that Bruce Power’s current units will reach the end of their operating lives in the coming years, but "It’s hard for me to make the economics work by replacing 900-megawatt units with 700-megawatt units."

AECL has applied to have its new technology licensed in Canada as well. Coffin said the company is about half way through the process, but expects it will take another two years or more to complete.