Canadian Nuclear Energy Policy: Changing Ideas, Institutions, and Interests (review)

Two scenarios for the future of domestic nuclear power are presented in the introductory chapter of Canadian Nuclear Energy Policy. One is eventual abandonment of most Canadian nuclear capacity, similar to what is happening in Germany. The other is continued development of Canadian nuclear technology in an increasingly competitive world energy market. This book explores the latter option. In Canada, the crown corporation Atomic Energy Canada Limited (AECL) is responsible for the development of nuclear technology. The recently privatized provincial utility Ontario Power Generation (OPG) owns or leases twenty of Canada's twenty-two power-producing nuclear reactors, and the province of Ontario is moving toward a privatized electricity market.

G. Bruce Doern, Arslan Dorman, and Robert W. Morrison, the editors of this set of ten essays, characterize nuclear power as a "precarious opportunity" for Canada and discuss AECL's commercial mandate and its focus on international sales in chapters in 1, 4, and 10. Morrison addresses environmental issues and nuclear power markets in chapter 2, Steve Thomas addresses the deregulation of British power markets in chapter 3. Chapter 5, by David Jackson and John de la Mothe, covers the new role of Canada's atomic regulatory agency. Chapter 6, by Peter Brown and Carmel Letourneau, tackles the nuclear waste question. In chapters 7, 8, and 9, Rick Jennings and Russell Chute, Donald N. Dewees, and Doern explore the new Ontario energy market.

The essays are well researched, well written, and concise (almost to a fault). Underpinning them all is the assumption that AECL and OPG have the potential to improve the efficiency of existing Canadian nuclear reactors and make them competitive in domestic and international markets. For example, the editors say that "early experience with liberalized electricity markets shows that electricity prices can be reduced, and that competitive pressures will demand such reductions" (p. 201). This is the first assumption I will consider. The second is that nuclear power can eventually gain an "environmental credit" as a carbon-emission reducer, which would reduce costs for the nuclear industry (pp. 45, 75, 93).

Both assumptions are vulnerable when we consider the historical and economic literature on the American and British nuclear industries. Appealing to a half century of evidence, authors such as David Collingridge, Steven Cohn, and Robert Pool have argued that as long as nuclear power remains capital-intensive and subject to complex licensing restrictions, it will be costly and inflexible. Doern, Dorman, and Morrison acknowledge this. High capital costs reduce design flexibility. Long lead times increase costs by forestalling profits, and also the industry's capacity to respond quickly to changes in demand. These are matters that will render it difficult to compete.

In the United Kingdom, existing nuclear capacity was improved after market deregulation, but there were no efforts to expand domestic capacity or compete for new reactor sales abroad. Moreover, it is sometimes forgotten that existing nuclear capacity everywhere has been heavily subsidized. If previous subsidies are added to the cost of power from improved reactors, they cannot be considered commercially competitive.

Recently privatized nuclear operators in the United Kingdom have not pursued international sales for British nuclear designs, which are not competitive on the export market despite recent gains in efficiency. If "AECL's financial viability, its future as a business, and its claims for government support are now closely linked to its success in selling the CANDU in the international market" (p. 19), the British case offers little hope.

Some of the capital cost of nuclear power could be reduced if it were to gain support as an environmentally responsible substitute for fossil fuels. Morrison points out that nuclear power currently reduces Canada's carbon emissions by about 15 percent, and Doern, Dorman, and Morrison suggest the possibility of obtaining carbon-emission reduction credits for nuclear power under...