The northern neighbours

18 December 2018

US supply chain sees opportunities in small modular reactors (SMRs), decommissioning and across its north border as the Canadian nuclear industry heats up. Jacquie Hoornweg reports.

WHEN THE CANADIAN GOVERNMENT LAUNCHED its small modular reactor roadmap at a sold-out conference in the nation’s capital on 7 November, large US vendors were there. One, NuScale Power LLC, used the occasion to announce a Memorandum of Understanding with provincially-owned Ontario Power Generation (OPG), which produces electricity for Canada’s largest province. The two companies will work together for potential development of NuScale reactors in the Canadian market by confirming the design is compatible with Canadian standards and regulatory requirements.

In Canada’s nuclear associations, at Canadian nuclear events and on the ground, American-headquartered companies are making their presence known and are acquiring existing Canadian companies, as BWX Technologies did a few years ago. Meanwhile, in August 2018 Canadian-owned Brookfield Business Partners, a business services and industrials company, acquired US-owned Westinghouse Electric Company. Today, Westinghouse is making its presence known throughout the Canadian industry. In February, global infrastructure company Aecom, with worldwide headquarters in Los Angeles, hired a long-time Ontario nuclear executive, Pierre Tremblay, to head its new Canadian nuclear operation. There is a lot of cross-border fraternisation these days.

It’s no surprise given the nuclear activity in Canada now, from Ontario’s nuclear refurbishment programmes to a pan-Canadian interest in small modular reactors (SMRs), says David Blee, president and chief executive officer of the United States Nuclear Industry Council (USNIC).

Over the past several years, market conditions in the USA have prompted the premature closure of plants and stalled new-build. As the industry continues to seek federal and regional policy solutions to reverse that course, the supply chain is looking to international markets and to areas of the US market where growth potential exists.

The sectors with the greatest potential include SMR development, advanced manufacturing, waste and decommissioning, and cyber or physical security, says Blee. “There’s death, taxes and nuclear decommissioning,” in terms of certainties, Blee jokes. The US has one of the oldest fleets worldwide and between retiring plants and those prematurely shuttered, there is a lot of work in decommissioning in the decades ahead. The suppliers who skill up now will have a jump out of the gate.

On 28 September, bipartisan legislation was signed into law that seeks to remove financial and technical barriers to developing nuclear reactors to market in the USA.

In Canada, the supply chain is also looking internationally but its first imperative is to keep Canadian utilities stocked with the parts and labour needed to get through about $26 billion in refurbishment and major component replacement over the next 15 years. There is also a major storage and decommissioning project on the horizon as OPG looks to the end of operation at the Pickering plant near Toronto, where two of its eight units are already in safe storage.

Ron Oberth is president and chief executive of the Organization of Canadian Nuclear Industries (OCNI). He says the organisation’s 200 members have strengthened the supply chain, and it is prepared for Canadian and global opportunities – giving a competitive advantage to the Canadian industry.

OCNI brings operators, EPC contractors and all tiers of the industry together to do business and to share knowledge. The suppliers have demonstrated leadership in taking on the task of getting their organisations ready, says Oberth, and the utilities and utility executives have committed to supply chain development.

OCNI often works in partnership with the CANDU Owners Group, representing Canadian utilities and operators in six other countries. Oberth says the two organisations have worked closely to identify the needs of the utilities and to create opportunities to close gaps on skills, share knowledge and experience on both sides.

“The long-term plan is to see supply chain investment in facilities, in resources and training and innovation,” says Oberth. Safe storage and facility decommissioning is a large growth area, “but so is advanced manufacturing, especially as the SMR market takes off,” he says. Once nuclear becomes modular, plant components will be built in factories. That opens an entirely new aspect of the business.

Oberth points to several partnerships forming between utilities and the supply chain, such as the MoU between OPG and NuScale and another between Bruce Power and Kinectrics on medical isotope production.

“These are not the traditional client – contractor relationships,” says Oberth. “Just like the borders between the US and Canadian companies, the line between operators and suppliers is blurring. “Today, these relationships are often partnerships,” he says.

The changing business model, along with the heightened responsibilities on multi-billion dollar projects like the Ontario refurbishment, means the supply chain has to be more sophisticated. The expectations for an EPC manager go well beyond getting the right components and people. There has to be accountability, and behind that has to be a willingness to ensure a competent and trustworthy supply chain that is not just about the Tier 1 performance, but ripples down and across the entire global supply chain.

This could explain the recent jump in interest in the COG Supplier Participant group, says Don Wilson, COG’s director of information exchange. “We have seen interest in the programme grow exponentially, including with global suppliers,” says Wilson. “It is clear, suppliers are interested in the Canadian market. They understand the price of admission is a certain standard of doing business. And, to do it, you need to educate yourself, your employees and all of the subcontract companies you employ.”

Education and innovation have never been more important elements in the supply chain programme than they are today, with unprecedented change in technological development.

Blee and Oberth both point to advanced manufacturing as a growth opportunity for the industry and critical to nuclear’s role in the electricity sector. Innovations such as 3D printing; robotics and inspection drones; paperless plants that rely on electronic work orders; optimised maintenance through artificial intelligence with embedded sensors and inspection equipment; and augmented reality training, are all opportunities for suppliers with a 21st Century skillset. More importantly, they will bring what nuclear needs: a lower cost of electricity.

“The solutions the supply community can bring to the plants, whether to SMR or traditional reactors, are going to make those plants more efficient and more cost-effective,” says Oberth. “Plant operators and their suppliers must innovate to remain competitive.”

Low cost also means safe and high quality, says Blee. “The nuclear industry is facing a huge economic challenge from natural gas and renewables. If we cannot demonstrate nuclear is a safe, cost-competitive way to generate low-carbon electricity and get the minds of investors and the hearts of the public, we will be left behind. It is as simple as that.”

Like OCNI, USNIC spends a lot of time bringing its members’ stories to international markets, but Blee says success has to begin at home. “The US suppliers are doing a great job helping countries worldwide to indigenise the skills and knowledge from the US market,” says Blee. “But it is difficult to compete globally if we aren’t also building here at home.”  

Author information: Jacquie Hoornweg is Managing partner at Querencia Partners 

Promation exhibits at an industry suppliers day. The Canadian and US nuclear supply chain associations regularly hold events that connect members to operators
The Organization of Canadian Nuclear Industries and the Romanian Atomic Forum Association sign a MoU for cooperation in the nuclear power field
The CANDU Owners Group’s Supplier Participant programme members meet regularly to exchange operating experience
As the refurbishment and major component replacement work continues to rev up in Ontario, the increased demand for contract staff will keep companies like CTS North America and the EPC contractors busy

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