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March 2011

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AECL abandons effort to sell U.K. reactor

Monday, March 28, 2011 @ 08:03 AM

From the Toronto Star:

Federally owned Atomic Energy of Canada Ltd. is no longer pursuing the sale of its next-generation nuclear reactor in the United Kingdom, announcing yesterday it will focus its energy on capturing business at home.

Some industry critics said AECL, which says it has spent “less than $10 million” trying to snag a purchase from the U.K., is trying to soften the blow of a certain loss and how it might be perceived as it bids for contracts in Canada.

“Why let it blow up later when you can back out now and save some face?” said Shawn-Patrick Stensil, who closely follows the nuclear power sector for Greenpeace Canada.

Less than two weeks ago, Mississauga-based AECL announced that its Advanced Candu Reactor made it onto a short list of four reactor designs approved by the U.K. nuclear regulator, which said it found no safety or security shortfalls serious enough to rule out the Canadian design. The short list also included Areva NP, Westinghouse Electric Co. and GE Nuclear – the same companies currently being considered for a new reactor in Ontario.

At the time, the U.K. government said it would whittle the list to three designs sometime in May. Sources say the regulator sent letters to all the U.K. utilities asking them to rank the designs they preferred. Their responses still left AECL on the bottom of the list.

Hugh MacDiarmid, AECL’s president and chief executive officer, told the Toronto Star that a business decision had to be made.

“We’ve been very carefully evaluating our realistic prospects over there. How much money is it going to cost us to go through step three, how much time, and without any commitment at the end of that?” he said. “Our sense was that we were unlikely to get the blue ribbon this time around, because we didn’t have the demonstration project under way here in our home country.”

MacDiarmid said the U.K. plans to build several new reactors and that AECL intends to participate in subsequent rounds, once it has proven itself in Canada.

With three opportunities to sell in Canada – in Ontario, New Brunswick and Alberta – the Crown corporation didn’t want to spread itself too thin, he added.

“I’m a real believer in having a core mission in life, and I believe AECL’s core mission is to be the supplier of choice to the Canadian electrical utility market. Everything else has to be secondary to that.”

Marc Kealey, an international energy consultant and former general manager at AECL, said the company made the right decision. The Canadian government, ultimately responsible as AECL’s owner, is better off backstopping a new nuclear project on its home turf than taking on huge financial risk in a foreign market, he said.

Even with a contract in Canada, Kealey added that AECL and its Candu technology face an uphill battle in overseas markets, dominated by the pressurized-water reactor technology used by Areva and Westinghouse.

Much of AECL’s efforts are focused on Ontario. The province expects to make a decision on reactor technology, and where the new plant will be built, by year end.


- Marc Kealey

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