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NEW OPPORTUNITIES FOR OSHAWA - AECL

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									        NEW OPPORTUNITIES FOR OSHAWA


                       Glenna Carr
         Chair, Atomic Energy of Canada Limited


                Greater Oshawa Chamber of Commerce
                           March 19, 2009




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Thank you. I was delighted to be asked to talk with you today. I am very
happy, too, to see that people like Roger Anderson, chair of Durham Region,
are here this morning. As you all know, the Canadian nuclear industry has
been a vital part of the Durham scene for several decades. Today, the industry
is at a major turning point. We have much to talk about.

I am here today with a message of hope for everyone who lives and works in
Oshawa and Durham Region.       The world is on the threshold of a nuclear
renaissance. That means exciting opportunities for Durham Region. You are
currently the hub of the Canadian nuclear industry. You are home to more
than a dozen members of OCI, the Organization of CANDU Industries, led by
Dr. Neil Alexander, capable of advanced manufacturing and fabrication of
nuclear components.       You have a willing host community for nuclear
expansion, and you have an experienced and capable nuclear work force with
OPG at Darlington and Pickering.


Not least, Durham can boast two of Canada’s leading educational institutions.
I am delighted to recognize Durham College and the University of Ontario
Institute of Technology here today.    They give this community unrivalled
resources to train nuclear professionals, technical and trades people, as well
as the research and development capacity to innovate and develop new uses
for nuclear science and technology.


That is a formidable list of strengths, skills and experience.    They make
Durham Region unique in Canada.         I believe that given a broad vision,
leadership and support, Durham Region can become the Canadian showcase
for research and applied technology to compete successfully in nuclear
markets of the world.


If Durham is unique in Canada, so is AECL. We have been in the nuclear
business right from its birth over 60 years ago. With our partners, we have



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made Canada a nuclear vendor country – one of a small number of countries
that have designed and sold nuclear reactors around the world. Our CANDU
reactors are respected for their design quality, outstanding operating
performance and efficiency.    They have been built and tested in action in
several countries on time and on budget in the last dozen years with every
new build.


Here in Ontario, the top two performing reactors, including Darlington #1 and
Bruce #7, had a 97% performance rating – extremely high by any measure.
CANDUs meet the highest environmental standards, and they have an
outstanding safety record spanning over 1,000 reactor years worldwide.


I am proud to be Chair of a company with a record like that, but I also believe
that the best is yet to come. AECL, I am pleased to say, was rated #6 in 2007
among Canada’s Top 100 Corporate Innovation Leaders, with a research
investment of $289 million. And this will be even higher in 2008/09 with added
research investment by the Canadian Government. Our newest product is the
Advanced CANDU Reactor®, the ACR-1000®, a Generation III+, 1200-megawatt
power plant, which bridges heavy and light water reactors, striking the right
balance of performance and cost while achieving the highest standards of
safety.   In an independent assessment last year of international nuclear
reactor technology, the ACR-1000 tied for first place among 14 reactors
evaluated.


Durham Region, then, has the strengths, and AECL has a proven track record.
Yet that is far from being the whole story.     The most important factor in
Canada’s success as a nuclear vendor has been the breadth and depth of our
whole nuclear community.      We have in this country a nuclear network of
businesses, utilities, academic institutions, public sector organizations and
labour unions that represent an unsurpassed set of capabilities and skills.




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We have the intellectual powerhouse of 5,000 highly skilled and educated men
and women who work for AECL, primarily in Ontario. We have world-class
companies that have worked with AECL for many years as Team CANDU
partners and suppliers, gaining invaluable hands-on experience building
reactors in Canada and abroad. We have over 130 small and medium-sized
companies that make up the Organization of CANDU Industries, with their
30,000 employees, who are well represented here today.


I have already mentioned the institutions specializing in nuclear education and
research here in Durham Region, and in Canada, among others, there are
McMaster University in Hamilton, UNB in Fredericton and the Ecole
Polytechnique in Montreal. We have our labour unions, who are very much
part of the nuclear network through the Canadian Nuclear Workers’ Council.
They are totally committed to our success.


Let me highlight the unions in this context, since the role of nuclear workers is
going to be crucial if Canada is to take full advantage of the opportunities
ahead. The industry will need the talents, skills and experience of many more
highly trained people.


To build a twin ACR-1000 reactor, for example, AECL alone would need to hire
an extra 1,200 people, 700 of them engineers. The other 500 include a wide
range of skilled trades and project teams, as well as specialists in human
resources, safety, communications, supply chain development and quality
assurance. Our Balance of Plant partner would be hiring construction trades,
skilled labour and other professionals.        New build contracts awarded
domestically and internationally will require a considerable ramp-up of talent
and suppliers in Canada and internationally. AECL, incidentally, also needs to
hire 250 people a year simply to keep our present 5,000-person work force up
to strength.




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Industry will also have an essential role as suppliers of components both for
the nuclear steam plant at the centre of the reactor complex and for the
balance of the plant.     We need our partners like SNC-Lavalin Nuclear, GE
Hitachi Nuclear Canada and Babcock & Wilcox, and the over 130 companies
that make up the Organization of CANDU Industries. These vital Canadian
companies and the utilities have the broad range of special skills and
Canadian expertise needed to meet the demanding quality requirements of
nuclear fabrication and construction.


For a global, technologically intensive industry like nuclear power, research
and development are key to competitiveness and leadership.         These are
exciting times on the nuclear industry’s innovation and technology frontiers.
Take hydrogen as an example. It offers a clean and sustainable source of
energy with many potential applications, including transportation.    Nuclear
power can produce hydrogen from water by an emission-free technique called
high-temperature electrolysis. Research is underway in using this method on
an industrial scale, and the Ontario Government is already committed to
developing hydrogen use in several pilot projects.


This is good news for your city and region. You have the R & D capabilities to
help develop this new and greener source of energy. AECL for example, funds
the Chair at UOIT in the Faculty of Energy Systems and Nuclear Science and is
part of a collaborative R & D program with UOIT, the United States Department
of Energy and several other universities on the use of nuclear heat for
hydrogen production.      Durham is the obvious candidate for the first pilot
project in nuclear-driven hydrogen production. The production of hydrogen
on an industrial scale, when it comes, could have enormous implications for
this region’s economic future.


Alternative fuels are another important field of research.      Through the
University Network for Excellence in Nuclear Engineering, AECL and others



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are investing millions here in Canada and at Tsinghua University in China to
develop the use of thorium and spent fuel from light water reactors in CANDU
reactors.   The element thorium as nuclear fuel has many advantages for
countries without uranium supplies and it is possible that thorium may
become a significant nuclear fuel of the future. Next month, AECL and UOIT
will be launching an R&D collaboration examining the use of thorium in
combination with other radioactive materials to produce a burnable nuclear
fuel. UOIT will model the various thorium-based fuel options at the university,
and testing will take place at AECL’s Chalk River Laboratories.

Re-processing and re-using spent nuclear fuel is also a promising line of
approach. This is the Holy Grail to reuse spent fuel, thereby generating more
power, using less uranium and reducing the waste that needs long-term
management.     We are not there yet – but we will be!       Together with the
research strengths of our partners, we will help our customers meet
environmental and economic goals of greener, cleaner energy and no unused
nuclear waste. That is an idea whose time has come, and it is also a major
opportunity for this region.


Talent, suppliers, research — all are vitally important, but to take advantage of
them we need a fourth strength.       Marketing nuclear reactors is a highly
complex affair but it is also essential, particularly in overseas markets. Our
competitors in other countries bring formidable marketing strengths to the
contest.    To meet them on equal terms, we need an integrated marketing
approach that emphasizes not just the quality of our product but the breadth
and depth of expertise in the Canadian industry, host communities,
governments and regulatory bodies can deploy across the field — in human
resources, research and development, experienced suppliers, capacity for
teamwork and our enviable track record of on-time, on-budget delivery of
reactor construction.




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I have mentioned the opportunities before us several times. Let me give you
an idea of just how large they are.     Here in Ontario, the Integrated Power
System Plan, IPSP, estimates that $27 billion of investment in nuclear power
will be needed in the years 2008-2027, simply to maintain nuclear’s present
50% share of Ontario electricity generation in the future.      That investment
includes building two to four new reactors, at least two of them here in
Darlington, and extending the life of much of Ontario’s existing CANDU fleet in
Bruce, Pickering and Darlington.      Life extension projects are already well
advanced at Bruce Units 1 & 2.        Elsewhere in Canada, life extension is
underway at Point Lepreau, New Brunswick, and will soon begin in Quebec at
Gentilly 2.    New builds are under active consideration in New Brunswick,
Alberta and Saskatchewan.       If all three go ahead, nuclear investment in
Canada outside Ontario could top $30 billion.


World wide, the prospects are even more impressive.              Economic and
population demand will lead to almost a doubling of electricity consumption
by 2030.      An estimated 230 reactors are in development to help meet that
demand. Now that countries like Sweden and Italy are deciding to include
nuclear energy in their power supply mix, as a base load power source that
does not produce greenhouse gases, that figure could nearly double. Even at
the lower estimate, we are looking at a potential market of $1 trillion dollars in
20 years.


What is more, that market will be an extraordinary opportunity for sustained,
continuous economic growth. Nuclear power is more than a series of one-off
construction projects. New builds naturally tend to be front and centre in the
media and public policy debates, but they are only half the story.        With a
number of CANDU reactors around the world approaching their initial design
life span, AECL expects a large market for reactor life extensions.          This
process can safely extend the operating life of the reactor by up to 30 years.
Life extensions are major undertakings. A typical single unit life extension



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creates around 1,500 jobs and injects an investment of $1.5 billion. Supplying
that market helps to even out the peaks and valleys between building new
reactors.   So do the servicing and maintenance requirements of operating
reactors we design and build. Not least, entering international markets has
helped greatly to maintain a steady flow of Canadian export business and
continuous employment of a highly skilled workforce here in Canada.


Historically, the Canadian nuclear industry and its flagship CANDU reactors
have held 10% of the world market. We are one of five nations selling reactors
worldwide. Because of the excellent operating performance and on-time, on-
budget track record of the CANDU reactors built over the last dozen years, we
have highly satisfied customers who want more Canadian reactors. Thanks to
that track record, Canadian prospects are bright for expanding our traditional
market share in the decades ahead.         South Korea is already importing
Canadian goods and services for its first CANDU life extension project at
Wolsong, with the prospect of three additional such projects to follow. More
will follow where CANDUs are in service.


For new builds globally, a major advantage is that CANDU reactors have the
capability to burn alternative fuels like thorium or recycled uranium. This is
important for uranium-poor nations like China. In addition to China, India,
Argentina and Romania, among others, are interested in CANDU’s alternate
fuel capability. Perhaps our strongest sales point, however, is the excellent
performance record of the reactors already operating abroad. In the nuclear
industry, where proven reliability is crucial, the operating record of reliable
trouble-free reactors is a powerful incentive for international customers to buy
more.


For Oshawa and Durham Region, possessing these strengths, at this moment
in history, represents an unprecedented opportunity that comes only once in a




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century. New builds and life extension in Canada and abroad will create many
thousands – even hundreds of thousands more years of employment.


Recent economic modelling by the Conference Board of Canada has
estimated that four new twin ACR-1000 reactors in Canada and eight twin
reactors subsequently built internationally would create 500,000 person-years
of employment and add $80 billion to Canada’s GDP. That’s a truly impressive
figure, and it includes the employment created by our partners and suppliers –
many, many professional, technical, management and trade jobs, with the
prospect of many more to come in future.


Seizing this opportunity would mean enormous financial returns to Durham’s
workforce, communities, and institutions.    It would mean major boosts to
Ontario and Canada’s GDP and balance of payments. It would deepen the
pool of skills, experience and investment that is our nuclear industry’s most
important strength and our country’s major source of reliable emission free
base-load power. Most of all, it would mean jobs, jobs. Jobs for Canada, and
especially for Ontario and Durham Region.


That is a bright prospect, but it comes with a word of warning. Opportunities
do not wait forever, least of all in a ferociously competitive international
market like that for nuclear power reactors. If we are to win our fair share of
the world market, the Canadian community has no time to lose. You can be
the leaders for this country and the nuclear industry. Together, let’s urgently
identify the skills needed for new build and life extension projects and match
them with those available in Durham Region. Let’s raise awareness in schools
and the community at large of the opportunities for work in the nuclear energy
sector. That starts with summer jobs — AECL alone hires 250 students every
year — and leads on to internships in the nuclear industry and then full-time
work on national and international projects. OPG hires many more.




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For those already in the workforce, the industry and Durham’s schools and
colleges need to work together to help talented people transition into the
growing nuclear industry. The Second Careers program at Durham College is
a leader in this field. Given the number of jobs that will be created by the
national and international projects, second careers are potentially a highly
valuable source of talent for the industry and should be supported by
companies, communities and governments.


Companies interested in entering the nuclear industry or expanding their
involvement, and educational institutions with nuclear energy programs
should become well acquainted with the nuclear supply chain, and the
components needed for life extension and new builds. They must be aware of
the range of skilled personnel required and the depth of the talent pool that
needs to be readily available. It is important, too, for them to be familiar with
the quality and certification standards required for the tools, parts and
services needed for new builds, servicing and life extensions.               The
Organization of CANDU Industries is an invaluable resource here, and AECL
and Team CANDU are ready to help in any way we can.


Most of all, the entire nuclear community needs to work together with a clear
vision of our goals. All the participants in the nuclear renaissance must focus
their resources on preparing for an energy-based economy that is able to meet
the demands of a growing and a “would be” greener world. Durham Region
already has impressive strengths in its favour. Together we have the skills,
the experience, the investment and the intellectual depth to make this region
Canada’s nuclear energy capital, and a winning competitor in the energy
markets of the world. The time to start is now.




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