'Risk of insolvency' at parent company of N.B. nuclear developer
Moltex Canada CEO says money problems in U.K. ‘slowed us down’ on small modular reactor development
Saint John-based Moltex Energy Canada Inc. is hoping potential new owners for its overseas parent company will breathe new life into its development of small modular nuclear reactor technology in the province.
But the company acknowledges that cash flow problems at its U.K.-based parent company have slowed down those efforts.
There is "a risk of insolvency" at the parent company, Moltex Canada CEO Rory O'Sullivan acknowledged in an interview.
An administrator is now looking for buyers for the U.K. company's assets, which include Moltex Energy Canada.
"As a technology development company we need to almost continuously be fundraising to keep progressing technical milestones," O'Sullivan told CBC News. "And, because we need parent company authorization to raise new capital, we have not got that authorization.
"That has slowed us down. And so that's why we're looking forward to new owners as soon as possible."
The U.K. administrator overseeing the sale, Azets Holdings Ltd., said in a statement that the holding company had been unable to get majority shareholder consent for new investments or a sale of assets.
That led directors to decide on March 17 to put the company under Azets administration.
"The decision taken to place the company in administration is in no way a reflection on the operations of, or proposition within, the subsidiary companies," the statement said.
Potential buyers for Moltex have until May 7 to submit bids for the company's assets, and it should take two to three months for the sale to close.
O'Sullivan said he is "very confident" that Moltex Canada will still be operating later this year.
Nuclear power doesn't emit greenhouse gases, so it's a key element of N.B. Power's strategy to reduce emissions that contribute to climate change.
Since 2017, Moltex Energy Canada is one of two companies that have been at work in Saint John developing small modular nuclear reactors.
The company received $5 million from the New Brunswick government in 2018 and almost $50 million from the federal government in 2021.
The other company, ARC Clean Energy, has also run into problems.
Goal was to be ready by 2030
ARC had hoped its first SMR would be ready by 2030, the date for phasing out the use of coal at N.B. Power's Belledune generating station.
But last year, Bill Labbe, the CEO who made that commitment, left the company, and utility officials said that date was no longer feasible.
ARC has made no announcements about its progress since May 2024.
"We are unsure whether or not ARC will be ready at that point or not, but we'll continue to work with ARC," N.B. Power CEO Lori Clark told the legislature's public accounts committee in February.
"They are looking for investors now. … We also have to have a Plan B in the event ARC isn't ready."
That could include buying small reactors from companies not operating in New Brunswick.
Ontario Power Generation was recently granted a licence by the Canadian Nuclear Safety Commission to build its first SMR, a competing model by GE-Hitachi, at its Darlington power station.
ARC spokesperson Sandra Donnelly said in a statement Wednesday that the company aims to complete design work by 2027 so it can apply to the commission for a licence to build its first reactor.
She said that would require funding from private investors and governments.
O'Sullivan told a committee of MLAs in 2023 that Moltex's nuclear waste recycling technology would be ready by 2030 but its reactor would not be.
He said Wednesday that the cash flow problems at Moltex's U.K. parent company have put the timeline "a couple of years behind that."
But he said the company's nuclear waste recycling technology — which would reprocess waste from the Point Lepreau nuclear station — means there's a market for its products even if N.B. Power buys reactors from another supplier.
Utility spokesperson Elizabeth Fraser said in an email statement that the U.K. sale process would have "no immediate impacts" on N.B. Power's technical support of Moltex.
She said there was nothing new to report on its shopping around for other possible reactors.
Some experts, including a former chair of the U.S. Nuclear Regulatory Commission, have questioned Moltex's plan, arguing the possibility of reprocessing waste and reducing the cost and risks of storing it is unproven.
Moltex recently announced what O'Sullivan calls "excellent waste-recycling results" that will allow it to sell its technology to other potential buyers when it's ready.
The CEO said despite a lot of federal election discussion about developing conventional energy such as oil and gas to reduce Canada's dependence on the U.S., he's not worried about nuclear energy being sidelined.
"Nuclear is really by far the ultimate solution for energy security concerns," he said.
"It's clean, it provides reliable electricity and it's affordable. It's competitive. … I'm actually more optimistic than ever about [the] nuclear role because it addresses the climate concerns and it addresses energy security concerns."
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