Ontario’s Darlington SMR project to cost nearly $21‑billion, significantly higher than expected

Source : Globe and Mail: Ontario’s Darlington SMR project to cost nearly $21-billion, significantly higher than expected https://www.theglobeandmail.com/business/article-ontarios-darlington-smr-project-to-cost-nearly-21-billion

by Matthew McClearn • 8 May 2025

On Thursday, the government announced its wholly-owned utility can spend $6.1-billion to build the first BWRX-300 reactor adjacent to OPG’s existing Darlington Nuclear Generating Station. In addition, it can spend another $1.6-billion on common infrastructure such as administrative buildings and cooling water tunnels the new reactor will share with three additional BWRX-300s to be built later.

Those remaining units are expected to cost substantially less: all told, the 1,200-megawatt plant‘s estimated cost is $20.9-billion, expressed in 2024 dollars and including interest charges and contingencies.

Those costs are far higher than what independent observers argue are necessary for widespread adoption of SMRs. For comparison, a recently-completed 377-megawatt natural gas-fired power station in Saskatchewan cost $825-million.

High costs, overruns and delays contributed to the decline of nuclear power in advanced economies such as the U.S., France and Canada, all former leaders in reactor construction. The global reactor fleet‘s collective generating capacity has been largely flat since the 1990s, around the same time Canada’s newest reactor (Darlington Unit 4) was built. Most reactors under construction today are of Chinese and Russian design. Only one reactor is currently under construction in the Western hemisphere, and two in Western Europe, according to Mycle Schneider Consulting.

OPG’s project, known as the Darlington New Nuclear Project, is being watched closely by utilities around the world. The BWRX-300 is a candidate for proposed projects in the U.S., U.K., Poland, Estonia and elsewhere.

Thursday’s announcement marks a significant milestone for major capital projects. Proposals and memorandums of understanding for nuclear power plants abound, but very few advance to this stage.

Construction was scheduled to wrap up in 2028, but OPG has pushed that back by one year. It attributed the delay to a construction licence the Canadian Nuclear Safety Commission granted in April, later than expected; the scheduled months between breaking ground and completion remain unchanged.

OPG’s costs are several times greater than Wilmington, N.C.-based GE Hitachi Nuclear Energy originally promised. Early in the BWRX-300’s development, GE Hitachi emphasized it was designing to achieve a specific cost: US$700-million per reactor, or US$2.25-million per megawatt, low enough to compete with natural gas.

OPG said the government is not funding the project: the utility will pay for it using its own funds, including cash on hand, cash flow from generating stations and debt.

Ontarians will pay OPG back over time through their electricity bills.

Officials estimated the average cost of power from the four reactors at 14.9 cents per kilowatt hour, contingent on the federal government providing investment tax credits.

The IESO said an alternative would be to build between 5,600 and 8,900 megawatts of wind and solar generators supported by batteries. Their capacity would need to be far greater, it reasoned, to account for the intermittent nature of wind and sunlight, and they would also require far more new transmission infrastructure. The IESO estimated the costs for all that at between 13.5 and 18.4 cents per kilowatt hour. Building the BWRX-300, the IESO concluded, is the lower-risk option.

Clean Prosperity, a Canadian climate policy think tank, said in a report last year that the final construction cost of the first BWRX-300 will be influential in determining how many other utilities will be interested in building their own. A cost of $3-billion, or $10.16-million per megawatt, would encourage rapid adoption of SMRs – a level some countries have achieved.

“Russia, India, South Korea and Japan have had average construction costs of $3.4-million to $4.6-million per megawatt since 2000,” the report said.

“In contrast, France and the U.S. built reactors for $12.5-million and $17.5-million per megawatt, respectively, over the same time frame.”

In a January report, the International Energy Agency said costs must come down; SMRs need to reach US$4.5-million per megawatt by 2040 to enjoy rapid uptake, far less than OPG’s estimated costs.

OPG said it‘s confident it will stick to its schedule and budget. The utility pointed to its ongoing $12.8-billion refurbishment of Darlington’s existing four reactors, a complex project it said remains on schedule and on-budget and is scheduled to wrap up next year. But if overruns do occur on the Darlington SMR, OPG and its partners (which include GE Hitachi, architect/engineer AtkinsRéalis and constructor Aecon) will share those costs.

The utility added that 80 per cent of its spending on the project will go to Ontario companies; just 5 per cent goes to U.S. companies, primarily GE Hitachi for its design and development work.

Last fall, the Ford government passed legislation dubbed the Affordable Energy Act, which committed to prioritizing nuclear power to meet future increases in electricity demand. The province plans up to 4,800 megawatts of new nuclear capacity at the Bruce Nuclear Generating Station, and as much as 10,000 megawatts at Wesleyville, a proposed new OPG station in Port Hope.

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