Gary Cooper was one of SNC-Lavalin’s key personnel in the construction of the Boundary Dam 3 project. This photo was takin in August, 2013, in the capture plant. Photo by Brian Zinchuk

It turns out Saskatchewan, and SaskPower, might be in a bit of a pickle when it comes to who will build our planned small modular reactors (SMRs). SNC-Lavalin, the company SaskPower over eight years later is still in litigation with regarding the Boundary Dam project, may be our only choice to actually build it.

Ontario Power Generation (OPG) is leading the way on this front, with the first SMR to start construction soon at the Darlington Nuclear Generating Station.

About 13 years ago, Ontario Power Generation had planned on building two new CANDU (Canadian Deuterium Uranium) reactors at Darlington. That plant has recently had its four existing reactors refurbished. Those four reactors put out more power than all of SaskPower on a typical day, as they have a combined capacity of 3,500 megawatts, and SaskPower on Feb. 6 put out 3,244 megawatts.

The difference between nuclear power and, oh, wind, for instance, is that when you publish a nameplate capacity, that plant generally runs pretty damned close to that nameplate capacity – period. OPG’s nuclear reactors routinely are operating at over 90% capacity. Wind, on the other hand, has a tendency to drop on any given day to next to zero across the entire fleet. Indeed, in mid-January, SaskPower saw four days with next to no wind generation at all, and two days where it actually went negative.

No, nuclear, unlike wind, or solar, for that matter, can be counted on, even if its cold out, hot out, too windy, not windy enough, or the sun decided to go on the other side of the planet for 16 hours a day in winter.

Darlington Nuclear Generating Station. Ontario Power Generation

I’m getting off track here. Around 2008 OPG was going to build two more CANDU reactors, but they thought better of it. And that was a real problem for federal Crown corporation Atomic Energy of Canada Limited, AECL. Up until now, AECL had designed and built all the power generating nuclear reactors in Canada. We even sold some reactors overseas, to South Korea, Pakistan, Argentina, Romania, India and China. (India used those reactors to further its nuclear weapons program, but we won’t talk about that.)

AECL was heavily subsidized by the federal government. By 2009, it was losing money like crazy. Its domestic order book hadn’t seen a new reactor built in this country since the 1990s. Saskatchewan had briefly looked at CANDU reactors, and decided they were too big for our purposes. Alberta also looked at CANDUs for northern Alberta, but passed. And international orders for new reactors were also drying up.

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Prime Minister Steven Harper, the same guy who gave Saskatchewan $240 million for carbon capture, sold off AECL to SNC-Lavalin for a pittance in 2011 – just $15 million. Let me put that in perspective – in the oilpatch at that time, a $15 million deal would hardly warrant a press release. And this was for essentially all of Canada’s remaining nuclear reactor design expertise. Power utilities like Ontario Power Generation and Bruce Power might run their respective reactors, but they didn’t design them. AECL did. And now AECL belonged to SNC-Lavalin, for a sales price of what would have been a rounding error on the budget of building just one reactor.

Now step forward to 2014. SaskPower’s Boundary Dam Unit 3 Integrated Carbon Capture and Storage Project (BD3) goes on line that fall. Its promise? To capture one million tonnes of carbon dioxide, per year.

Robert Watson, left, president and CEO of SaskPower in 2011, and Rob Norris, who was SaskPower Minister at the time. Photo by Brian Zinchuk

And I was there, on April 26, 2011, when SaskPower Minister Rob Norris made the project announcement. SaskPower even had a billboard along Highway 18, saying that it would be the million tonnes per year would be the equivalent of taking 250,000 cars a year off the road.

Except that it never performed to that standard on a yearly basis.

The engineering, procurement and construction (EPC) contractor was SNC-Lavalin, using Shell’s CanSolv process.

The massive stainless steel tank was meant to replace the cinder block-lined-with-tile amine storage tank in the Boundary Dam Integrated Carbon Capture Project. The original tank, with approximately 70,000 hand-placed tiles, apparently was insufficient for the task, and the new tank fit inside the old one.

There were design issues – like the amine storage tank that had something like 70,000 hand-placed tiles as its interior lining. It leaked, so they literally had to take the roof off of it, and use a massive crane to lower a stainless steel tank inside of it. SNC-Lavalin paid for it. It was “All under warranty,” SaskPower told me in September, 2015. Other issues weren’t nearly as dramatic, but they added up to frequent sometimes prolong, shutdowns for maintenance, especially in the early years. Things are much better now. But again, never up to what was promised.

The sulphur dioxide capture portion of the Boundary Dam 3 capture plant. Photo by Brian Zinchuk

 

Now, as the first of its kind, and first of this commercial scale, of course it wasn’t going to work perfectly. Ever use Windows 1.0? Me neither. First usuable Windows was version 3.1. The Ford Model T wasn’t all that great, either. So after several years of repairs, optimization and improvements, we’re probably on version 1.5 of BD3. But even so, last year, BD3 only captured 749,035 tonnes of CO2. That was its best year yet, but it was still only 75 per cent of promised performance.

What has been perhaps worse, for both SaskPower and the Saskatchewan Party Government, has been the egg on their faces ever since then. Saskatchewan’s visionary project had never turned out the way it had been hoped.

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The project was over time by about half a year, and over budget. The $1.24 billion in 2011 became $1.6 billion, although much of that overage was for the refurbishment of the old power station. Asbestos abatement was a key issue. No matter the cause, there was political hell to pay as a result. And every month SaskPower put out its regular reports on the performance of BD3, it was a tacit acknowledgement that it worked, but not as well as planned.

Builders build, and lawyers sue

As often happens with major projects, engineers engineer, builders build, and lawyers sue. And that’s what happened with SaskPower and SNC-Lavalin. Indeed, in 2016, SaskPower officially blacklisted SNC-Lavalin as a contractor, and that was still the case in May, 2019. I asked SaskPower about it on Feb. 8, and got this response:

“The matter is still before the courts, and SaskPower is unable to provide further comment.”

And that, good folks, is a problem.

If I don’t like Ford trucks, I can go buy a Chevy, or a Ram. But when it comes to building nuclear power plants in Canada, I really only have one option – AECL, or rather, SNC-Lavalin now. Who else designs and builds nuclear power plants in North America? The big players were General Electric, Westinghouse, and formerly AECL. General Electric Hitachi is already partnered with SNC-Lavalin, Aecon and OPG. Westinghouse is working on their own SMR design, but at five megawatts, it’s tiny, and not the one we chose.

Maybe we could get a mammoth global EPC like Bechtel, which has lots of nuclear experience. But that’s American. No, if we want to build Canadian, even if it’s not a Canadian design, we have one choice – SNC Lavalin.

Saskatchewan and SaskPower signed on with Ontario and Ontario Power Generation for several reasons. They have decades of experience with nuclear. They have a workforce training pipeline. They know how to build these things (even if the CANDUs were routinely over time and over budget). Saskatchewan has essentially no institutional knowledge in the nuclear space. So whoever OPG uses, we’re pretty much in for a penny, in for a pound.

Are we going to turn up our nose and say, “Sorry, you’re working with SNC-Lavalin, but we blacklisted you over the last project?”

No, we can’t. We’re essentially forced to go with SNC-Lavalin.

This doesn’t even touch on SNC-Lavalin’s corrupt practices in Libya, which became a national scandal.

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SPC, SNC, figure it out

Sometime soon, SaskPower and SNC-Lavalin are going to have to sort out their difference regarding BD3 before they can proceed with building small modular reactors.

That has me wondering just exactly how those negotiations would go. Oh, to be a fly on the wall…

SaskPower: “Let me get this straight – the last thing you built for us never worked to its promised potential. Eight years later, we still haven’t sorted out the legal battle on that, and we’ve been wearing egg on our face ever since.

“And if it had worked as promised, we probably would be putting carbon capture on our whole coal fleet by now, probably for less than the cost of two reactors. Estevan and Coronach wouldn’t be on pins and needles, waiting for the other shoe to drop. And we could continue burning our cheap coal basically forever.

“But because your last major project with us didn’t work out, we are now forced to build multi-billion dollar nuclear plants, and we have no choice in builder except for you, even though we’ve blacklisted you?”

SNC-Lavalin: “You’d almost think it all worked out for the best, wouldn’t you? It’ll be a pleasure doing business with you, for the next 20 years. Sign here.”

This could be very interesting.

 

Brian Zinchuk is editor and owner of Pipeline Online. He can be reached at brian.zinchuk@pipelineonline.ca.

Pipeline Online provides the in-depth coverage and analysis in Saskatchewan’s energy sector that no one other media comes even close to. Our lead story is posted at 7 a.m., Monday to Friday. Follow on LinkedIn, Facebook or Twitter

 

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