This article was written by Adam Radwanski and was published in the Globe & Mail on June 14, 2024.
AtkinsRéalis Group Inc. is predicting a doubling of its nuclear business in the next three years, as the Montreal-based engineering firm seeks to capitalize on what it is calling a nuclear “super cycle” in which countries turn to the technology to meet growing energy demand while reducing greenhouse gas emissions.
The projections, delivered during an investor day in Toronto on Thursday, would see the company – formerly known as SNC Lavalin – increase annual revenues from its nuclear division from approximately $1-billion in 2023 to between $1.8billion and $2-billion by 2027, making up a greater share of its total operations.
In an interview following the presentation, chief executive officer Ian Edwards said the expected growth would come primarily from refurbishments to extend the lifespans of aging CANDU reactors – the technology AtkinsRéalis took over from Atomic Energy of Canada Ltd. in 2011 – in Canada and internationally.
But Mr. Edwards said that AtkinsRéalis is also hopeful about reaching deals as early as this year to sell its first new reactor in decades, an in-development
CANDU model it has branded the Monark – including potentially in Ontario, where it has most of its existing Canadian nuclear presence. While that possibility was not factored into the near-term financial projections, he said, it could further boost revenues by 2027, and vastly higher thereafter.
While the optimism is partly tied to a broader resurgence for the company, which restructured after SNC-Lavalin fell into scandal, Mr. Edwards framed it more as a result of a global re-embrace of nuclear technology as governments come to terms with the scale of infrastructure needed to achieve net-zero emissions around mid-century.
“If I was talking to an energy minister three or four years ago, it would be kind of a generic conversation, around ‘We need renewables,’ ” he said. “Now it’s, ‘We need this many gigawatts.’ ”
Mr. Edwards stressed that he sees nuclear as part of a holistic renewables strategy, and that AtkinsRéalis also sees growth opportunities in power sources such as hydroelectricity. But he described refurbishing existing reactors, about which more jurisdictions were previously non-committal, as the “easiest low-hanging fruit,” enabling large amounts of power for another 30 years.
That may be a particular boon for AtlkinsRéalis, because of its aging fleet. Its investor presentation noted that among 27 CANDU reactors operational worldwide, the median age is 38 years.
As of now, the company said, it’s under contract for 10 refurbishments over the next decade, mostly at Ontario’s Darlington and Bruce sites. And it is in discussions around nine more, including in South Korea and China. The continuing talks also include Pickering, the lone Ontario site where such contracts have not yet been signed, which Mr. Edwards is optimistic about landing since refurbishments thus far in the province have been on time and on budget.
The company is also enjoying a surge in the other aspects of its nuclear business, which includes services for CANDUs and other types of reactors, contributing to the division’s revenues rising 22 per cent yearover-year in 2024’s first quarter.
The path toward new reactor sales is less certain, but involves very robust market projections.
Based largely on a declaration by 22 countries at last year’s COP28 climate summit to triple nuclear capacity by 2050, the company is suggesting that 1,000 new reactors will be needed during that period. It’s assuming that CANDUs make up 5 per cent of those, presenting a potential $750billion opportunity.
Mr. Edwards said that he’s seen a “flurry of interest” during discussions since COP28, although he acknowledged it’s largely preliminary.
“I think most countries or utilities or plants are in this exploratory phase,” he said, “trying to understand what it takes to move a country that perhaps has never had nuclear power, or has not built for a long time.”
As for which countries AtkinsRéalis will target, he laid out three types.
The first is anywhere that already has CANDU reactors, which includes Canada, Romania, South Korea, China and Argentina. Conversely, it won’t target markets such as the United States and France that have existing non-CANDnuclear fleets that are not CANDUs.
The second is Eastern Europe, where some countries have relied on Russian reactors, and where the relationship with Romania could help. The third is the AsiaPacific region.
These plans will be contingent on the Monark’s rollout. While AtkinsRéalis is touting it as building on CANDU advantages such as the ability to produce medical isotopes and use of unenriched rather than enriched uranium, while having higher capacity than past models, it’s still in development.
Mr. Edwards played down any competitive downside from that scheduled deployment in 2035, suggesting it’s aligned with likely investment timelines in Ontario and elsewhere. He acknowledged a couple of broader market variables.
One of those, he said, is the unknown role of small modular reactors, which have been heavily hyped in recent years as a more targeted energy solution. While AtkinsRéalis is involved in a small modular reactor demonstration project in Ontario, it is not a proprietor of the nascent technology.
Another is governments’ willingness to backstop investments in nuclear projects with uncertain costs and a history of overruns. At the same time, he said, the industry needs to do its part to disprove its reputation for massive overruns – something he contended that AtkinsRéalis has begun to do, with the Ontario refurbishments.
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