Does nuclear energy have a role in the development of Canada's oil sands?

The Canadian Energy Research Institute (CERI) recently completed a study for Atomic Energy of Canada Limited (AECL) that compares the economics of a modified ACR-700 Advanced CANDU Reactor with the economics of a natural gas-fired facility to supply steam to a hypothetical Steam Assisted Gravity Drainage (SAGD) project located in north-eastern Alberta. This paper presents the results of CERI's evaluation. The comparison was made by using discounted cash-flow methodology to estimate the levelized unit cost of steam that could be supplied to the SAGD project from either a nuclear or a gas-fired facility. The unit cost of steam was determined by treating the steam supply facility as a standalone business; it would ensure that all costs are recovered including capital costs, operating costs, fuel costs, and a return on investment. The study indicated that steam supply from an ACR-700 nuclear facility is economically competitive with steam supply from a gas-fired facility. An examination of key variables indicated that the cost of steam from the nuclear facility is very sensitive to capital cost of the facility, while the cost of steam from the gas-fired facility is very sensitive to natural gas price and possible Kyoto compliance costs. (author)