Nuclear’s winter is over. It’s hard to imagine five years ago thousands of people would have trekked to Ottawa to talk nuclear. But a decarbonizing drive and a global pledge to triple nuclear energy by 2050 at COP28 has given the low-carbon source plenty of momentum.

Scores of engineers, financiers, and policy makers from around the world descended upon the nation’s frigid capital this week to discuss the prospects of a tried-and-tested tech, but with a new twist: small modular reactors (SMRs).

The new darling of energy transition was the theme of the invitation-only OECD Nuclear Energy Agency (NEA) event in Ottawa last week. It’s not hard to understand why. There’s a comfort level with SMRs since they are based off conventional nuclear reactors that are operational since the 1950s. The modular approach to manufacturing reactor parts also holds the promise of lower costs, compared to onsite construction. That’s an alluring quality as conventional nuclear projects have a long history of cost overruns, that’s led to losing taxpayer and political support.

Event participants were bullish on SMR’s ability to decarbonize hard-to-abate sectors. Their reasoning: Ontario’s 50-year nuclear pedigree. The province’s experience with the Bruce and Darlington nuclear plants is seen as a springboard for SMRs, leveraging a deep pool of skilled labour and technical knowledge, social licence, and a regulatory framework that’s best in class.

Yet, being an SMR first-mover comes with an eye-watering price tag of at least $1 billion in design costs. That’s even before construction begins. It has led to a waiting game with many in heavy industries and oil and gas sitting on the sidelines in the hope that a competitor makes the first move. The industry would need to move quickly to test SMR’s potential. Until SMRs’ high capital costs industry can be sufficiently de-risked, its potential to decarbonize sectors such as oil and gas and mining will remain on ice.

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