Politics

Darlington small modular reactor's first unit won't be completed within $7.7-billion budget

Graham ThorntonPublished 3m ago2 min readBased on 1 source
Darlington small modular reactor's first unit won't be completed within $7.7-billion budget
Image by distelAPPArath from Pixabay

Ontario Power Generation says the first reactor unit at its Darlington small modular reactor project will not be finished within the $7.7-billion budget it disclosed earlier. The company made the statement in quarterly financial statements released Tuesday.

A small modular reactor, or SMR, is a smaller type of nuclear reactor. The company had previously targeted October 2030 for the first Darlington unit to enter service. A production forecast in its filing suggests the timeline could slip by at least a year.

Filings with the Ontario Energy Board, the provincial regulator, indicated the project faces cost overruns and delays. Ontario Power Generation said it will carry out a comprehensive assessment, which is expected to be completed by mid-2027.

The company attributed the overruns to ongoing engineering work by its partner, GE Vernova Hitachi Nuclear Energy, which is responsible for designing the BWRX-300 reactor. A GE Vernova Hitachi spokesperson, Jonathan Allen, pointed to several interconnected contributions across engineering, procurement (the buying of equipment and materials) and construction. He also cited changing market conditions, including inflation and geopolitical risks.

Energy Minister Tim Hodgson called the engineering setback "a reality in all first-of-a-kind projects." He defended the Canada Growth Fund's $2-billion equity investment in the project. He said the investment fits the fund's mandate to take on risk for technologies that can drive economic growth and advance climate goals. Hodgson also said, "It's important for Canada that we do not balk on making these important investments."

The project has received equity commitments from the Canada Growth Fund and the provincial Building Ontario Fund. A spokesperson for the Canada Growth Fund, Mathieu St-Amand, said the fund's commitment is being deployed over time. The fund said its Darlington money will go out in two tranches. The first is tied to the first reactor unit. The second covers the remaining three units and depends on certain milestones being met.

The Darlington project went through the Major Projects Office last year.

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