Speech at the Atlantic Canada Energy Summit

October 4, 2013

Speech by Steve Coupland, Director of Environmental Affairs, Canadian Nuclear Association
at the Atlantic Canada Energy Summit
October 4, 2013

Thank you for that introduction.

Heather Kleb, our interim president and CEO, had wanted to be here today, but Heather had to testify before the Canadian Nuclear Safety Commission , our regulator in La Ronge Saskatchewan and air travel being what it is couldn’t get here. She sends her regrets and her warm regards.

As Minister Oliver outlined, this is a very exciting time for Canada to be in the Global Energy market. At the CAN we see tremendous opportunities for the Canadian Nuclear industry in that Global market.

The world’s population, which already is expanding rapidly, will continue to grow — and even more rapidly. Today we number about seven billion people. Looking forward to 2040, United Nations forecasters expect the global population will rise to nearly ten billion.

As we add another three billion people to this planet, we will certainly need more energy. In particular, we will certainly need a great deal more electricity than we can provide now.

We all know the story on China. With a population today approaching 1.4 billion, it has more people than any other country. Its economy is growing fast. It represents a massive opportunity for the energy industry.

But China’s rate of growth has its limits. China is on its way to becoming a developed country. Its per-capita income is rising quickly and may eventually match ours. Its population structure has begun to resemble ours as well.

Here in Canada, we’re getting older. We are not having as many children as we did 30 or 40 years ago. And as the population grows through the work years and retires, its demand for energy slows down as well. That same pattern has begun to show in China. The United Nations tells us that if nothing changes, like fertility rates, then China’s population growth will probably peak in 2030.

As China’s population growth slows down, other countries will move to centre stage. Today India has the second-largest population. By 2030, it will pass China and become number one in population. More importantly, it will continue to grow well into the future. And its demand for energy will continue to rise dramatically.

Demand in the developing world has two drivers – population growth, and an individual demand for more and more electricity. Modern appliances, computers, all the technology that you can get – it all needs more power.

We know that the two keys to improved quality of life are clean water and electricity – and demand for both is going to grow rapidly.

You can imagine how that will play in Africa, which today has relatively little electrical infrastructure. Today the continent is home to one billion people. According to the United Nations, that number will rise by 2030 to 1.7 billion. It will match India in population growth. Not only will there be more people but, as they move into the middle class, their electrical consumption will grow dramatically.

So here we find one of the essential elements in any calculations about the energy industry. The world’s population will continue to grow strongly. Most of that growth will take place in the developing world. And most of that developing world lacks the energy infrastructure that it definitely will need.

The next question to think about is what this population growth will mean for those countries in terms of their energy infrastructure.

How much infrastructure will they need?

It’s instructive to consult the World Energy Outlook just published by ExxonMobil. As one of the world’s largest oil and gas companies, ExxonMobil takes a strong interest in future energy markets. Their World Energy Outlook makes a couple of key points about where we are headed.

First, the energy needed around the world to produce electricity in 2040 will rise by about 50% from today’s needs. That takes into account all uses of electricity, including the residential and commercial, industrial, and transportation sectors. It also takes into account the growing trend in energy efficiency, including smart grids, and energy conservation.

Second, the demand for electricity in the developing world will soar. Look at those three areas I described a minute ago — China, India and Africa. According to ExxonMobil’s energy forecast, China’s energy demand will double by 2040. In India, it quadruples. And Africa’s energy demand will rise even faster, at an estimated 335 percent. These are huge rises in electricity demand.

In fact, on a global basis, ExxonMobil tells us that electricity demand will rise by about 16-thousand terawatt hours. Now, that number is beyond anyone’s ability to imagine on its own. Think of it this way. The United States today uses about four thousand terawatt hours of electricity. So the world demand forecast means we’d be adding the equivalent of four Americas. That’s huge.

Now what about the supply side of this picture? Which fuels will be needed to meet that demand? Today the world runs on coal. It’s the number one fuel, because its price is very competitive.

However, leaders in developing nations and the western world have begun to realize that coal is cheap only if you don’t count the hidden costs of waste — the toxic effects of pollution and climate change. When you price those factors into the mix, then coal becomes the energy world’s number one problem.

Coal produces the emissions that drive climate change. In fact, no other fuel produces as much greenhouse gas as coal, and many jurisdictions have begun moving to coal substitutes. In fact Ontario where I come from will close its last coal plant next year. Increasingly, they will find those substitutes in natural gas, in renewable energy sources like solar, wind and hydro, and also in nuclear energy.

Renewables hold great promise, as long as they can resolve their central challenge of intermittency. The sun doesn’t always shine, the wind doesn’t always blow, and hydro that relies on the run of a river often fails to meet its full potential. Over time, improvements in storage technology may allow these intermittent power sources to improve their reliability. But until that happens on a massive scale, these technologies are not suitable for base load generation — the always-on, 24/7 power that any jurisdiction needs.

So when countries are looking for a reliable electricity source for base load production, there are really only two possibilities. The developing world faces a choice between natural gas, and nuclear power.

Very probably they will choose both.

Natural gas is very attractive when compared to coal, and to the renewables. Its performance on greenhouse gas is better than coal’s. If you compare gas and coal on their emissions per kilowatt-hour, you’ll see that gas emits half as much greenhouse gas as a coal plant. That is still a lot of greenhouse gas, but to a world burning coal, that’s a very attractive improvement.

If you compare gas to the renewables, it has the answer to their problem of intermittency. Natural gas is always on, 24/7, as needed.

But what about nuclear – what is it’s role?

If you listen to the media, you’ll hear stories about how nuclear is on its way out. The media will tell you that nuclear is too expensive to build, too dangerous to operate, and that country after country is getting out of nuclear energy.

Again, this is a good place to look at the facts.

Today, there are about 430 nuclear reactors installed in 31 countries. For those of you not keeping track of nuclear power in Canada, we have 22 of those reactors, including the generating station at Point Lepreau. All but three of those reactors are up and running today, providing safe, reliable, affordable electricity, just like Point Lepreau.

Now, what about building some new reactors? Around the world today, The numbers are staggering. India has six units under construction, 18 planned, and 39 proposed. China has 28 under construction, 53 planned, and 118 proposed. Russia has ten under construction, 24 planned, and 20 proposed.

Globally, according to the World Nuclear Association, 68 reactors are being built today. By built, I mean that the concrete has been poured, and construction is underway.

Another 162 are planned. By planned, I mean the projects have been approved, the financing has been arranged, and the reactors should begin to operate within the next ten years.

On top of that, firm proposals exist for another 316 reactors. By firm proposals, I mean that specific proposals exist for specific sites, and that these reactors could begin to operate within 15 years.

So here we see the real picture on new nuclear capacity. Again, 68 reactors now under construction, 162 planned, and 316 on the drawing boards. This picture is certainly not the one that you see in the media.

Clearly, a new generation of nuclear is arriving.

Now, what does this all mean for Canada?

Let me make two points.

First, let me use NB as a domestic example, NB Power has just come through a major overhaul of Point Lepreau. Refurbishment cost was higher than we would have liked but that investment that has delivered several benefits. They include an incredibly reliable power supply. Point Lepreau should generate power for another 25 or 30 years. Considering that it’s the workhorse of New Brunswick’s power supply, that is an accomplishment that needs to be celebrated.

NB Power says in its strategic plan that a fully operational Point Lepreau means the province will use less oil. Back in the year 2000, oil represented 35 percent of New Brunswick’s electrical supply. This year’s forecast — oil will provide just one percent. Financially, that represents a huge savings. In addition it eliminates the large amounts of GHG emissions that are produced by oil.

With nuclear back in position as the stable, reliable workhorse, NB Power can afford now to explore a greater use of renewable energy sources. More hydro, wind and solar generation will better position New Brunswick to meet its targets for greenhouse gas emissions and produce cleaner air.

Also, with nuclear back in its role as a stable, reliable workhorse, hauling the heavy load for NB Power, gains room to manoeuvre in selling power to the U.S. Northeast, and to Nova Scotia and PEI. Already, electricity exports have helped reduce the cost of electricity.

So nuclear’s restoration in New Brunswick means more opportunities to improve the environment and to deliver economic value. That’s a pretty good electricity policy.

Secondly let me give a more long-term answer.

In the world of nuclear energy, Canada stands out from everyone else. We are among the very few countries with a comprehensive nuclear sector. We do it all, from uranium mining through to power generation and onward to power-plant decommissioning. Many industries benefit from nuclear science and technology, including food safety, medical imaging and treatments, and materials science. Very few other countries have all those capabilities.

Our nuclear organizations rank among the best in the world for safety and reliability. We have an internationally respected independent regulator, a Canadian reactor designer and manufacturer, a rich network of expertise, and a strong supply chain.

Four of the high-growth, opportunity-rich developing economies have already bought our unique, home-grown nuclear reactor technology: South Korea, , Argentina, China and India. And just last week, the federal government agreed with India to bring the Nuclear Cooperation Agreement into force. That agreement opens up India to Canadian uranium, as well as joint ventures with Canadian nuclear companies.

Opportunities like these are important for Canada, and especially for the supply chain. The nuclear knowledge gained here can be used abroad.

Across the country, nuclear energy sustains 30,000 direct jobs, and our industry’s suppliers employ a further 30,000 Canadians. These numbers come from Canada’s Manufacturers and Exporters. C-M-E also reported last year that the nuclear sector creates $6.6 billion in economic activity each year, pays $1.5 billion in taxes, and generates $1.2 billion in exports.

Here in New Brunswick, the Point Lepreau generating station sustains at least 600 high-quality jobs and pumps $70 million into the provincial economy. These jobs last a long time, they pay well, and they are healthy and safe. Moreover, in the nuclear industry, we make large investments in our people’s training and development. Our nuclear workforce is highly skilled, and the nuclear workforce here in New Brunswick is as good as any nuclear workforce in the world.

This brings me to a very important point — in fact, my central point.

The world will need much more electricity than it uses now. The two main fuel sources 30 years from now will probably be natural gas and nuclear. Both have attractive economic profiles, and both can displace coal’s environmental effects.

Here in New Brunswick, you have a nuclear generating station, freshly tuned up and ready for another 25 to 30 years of service. Most importantly, you have the skilled workforce you need to keep Point Lepreau humming. And because of that you now have the ability to project New Brunswick’s nuclear know-how into the global marketplace.

Globally, there are abundant opportunities for Canadian expertise. Seizing these opportunities is not just about demonstrating and enhancing Canada’s status as a top-tier nuclear nation. Rather, it’s about our status as an advanced, high-knowledge economic player in the 21st century.

Going forward the world is going to continue to choose nuclear. In that world, Canada owns an enviable place. We must maintain that place if we want to remain part of the knowledge-based 21st-century economy.

In addition to the contribution that nuclear makes to a safe, reliable energy supply, it also provides important benefits to other industries. In fact nuclear science and technology is essential to materials testing and product improvements in a wide range of industries, from automotive and aerospace to telecommunications.

For example, nuclear S&T can study how manufacturing processes affect materials at the basic level of crystal structure, looking for ways to make materials better, more reliable and more cost effective.

Nuclear science and technology also contributes to the health sciences sector by studying nano-structures. These are like little microscopic delivery trucks that carry therapeutic agents into the body’s molecules — delivering treatments for cancer, Alzheimer’s disease and more.

And you already know the benefits of our technology in providing CAT scans, and radiation therapies to treat cancer and other diseases.

As you can see, there’s a lot more to nuclear than just keeping the lights on, even if we do that job exceptionally well.

Now, let me address just one more point before I take your questions. You will almost certainly be asking yourself about nuclear safety. After all, we saw a serious accident at the Fukushima power station two years ago, and there are still reports about leaking radiation.

Here’s the important point about Canada’s nuclear safety system.

Soon after the disaster struck, all of Canada’s nuclear companies launched a thorough assessment of our own systems and operations to confirm their safety. We looked at back-up power systems. We looked at whether our nuclear facilities could withstand the natural disasters that could happen here.

The Canadian Nuclear Safety Commission, which regulates our industry, concluded that all Canadian nuclear power plants are safe. Our facilities were designed to withstand conditions similar to those that triggered the failures at Fukushima.

You see, Canadian nuclear generating stations are among the most robust designs in the world. They have built-in, multiple redundant safety systems to prevent damage in the event of a natural disaster.

And all of Canada’s nuclear generating companies, including NB Power, have well-established and practiced emergency procedures that include emergency shutdown of the reactors.

So, on the safety issue, I think you can see that Canada has an exemplary nuclear track record. We have provided electricity safety, affordably and reliably for over 45 years, and we are a leader in the industry worldwide.

That experience is shared across all of Canada’s generating stations, including Point Lepreau.

And because of that experience, because of that knowledge and technology, I would suggest that Canada’s nuclear workforce has a future that is exceptionally bright. It can continue to power our provinces well into the 21st century.

It also gives New Brunswick and Canada’s nuclear workforce admission to the global energy market. That’s a market in which nuclear power plays a strong role today, and will play an even stronger role tomorrow. Electricity enables people to lead better lives. Electricity from nuclear means they can consume electricity without creating greenhouse gas emissions.

Ladies and gentlemen, I’ve given you a look into how the world could develop over the next 30 years. We see clearly that the world will need more electricity, and that nuclear energy can contribute a great deal to meeting the need. As importantly, I’ve tried to show you that Canadian nuclear expertise will be needed at home and away. We have an opportunity to take Canadian-grown technology into a global market where it is certainly needed.

From where I stand, the nuclear future looks very, very good, and I think we should seize it together.

Thank you.

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