AECL would finance the deal with private sector firms
Canadian Energy Minister Jack Keir said this week he will seek approval for two additional new nuclear reactors at Point Lepreau in New Brunswick province. The atomic power plants would be built by Crown corporation Atomic Energy Limited Canada (AECL) and two private sector partners - SNC-Lavalin and Hitachi Nuclear.
The three firms are lining up investors. According the Keir, the consortium, known as 'Team Candu', is very close to making a formal announcement for two 1,100 MW ACR-1000 reactors. The reactor is still in the design certification stage with the Canadian Nuclear Safety Commission. The new reactors are expected to cost $4-5 billion each. A completed project would be three times the size of the existing installation.
The merchant model has never been used in Canada. Liability for costs, and the potential for cost overruns, is very complex with a project of this size. Financing for the two new reactors depends, in part, on the ability of the consortium to sell electricity to the U.S. including New England states including Maine, New Hampshire, and Vermont. Commitments to new transmission and distribution infrastructure and rights of way must be made to get the power to these customers.
AECL is currently refurbishing the existing 635 MW Point Lepreau reactor as part of a $1.4 billion effort. The Candu reactor came online in 1983. When this work is complete, the reactor should be good to go for another 25 years. AECL has to complete the upgrades on time and within budget to build confidence in the new twin reactor project. The deadline is September 2009.
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