CANDU Generates the Greatest Economic Benefits For Ontario

New economic analysis shows choosing CANDU over a foreign supplier will mean billions of dollars and thousands of jobs for Canada's economy

Toronto, 2008 February 25 — A new economic analysis confirms CANDU as the best choice for Ontario's next nuclear power plants and illustrates how Team CANDU's proposal to build new Advanced CANDU Reactors^® - ACR-1000^® for Ontario makes the most economic sense.

The analysis estimates that the economic activity required to design, supply and construct two Advanced CANDU reactors for Ontario will add $5.1 billion to Canada's GDP and create 62,000 new person years of employment. The study was conducted using Statistics Canada's existing input/output methodology and data prepared by Team CANDU.

The government of Ontario will decide between foreign technology or made-in-Canada CANDU nuclear technology to supply the province with base load electricity for decades to come. The decision will be based on the "best technology offered at the best price that provides the greatest benefits and lowest risks over the lifetime of the new facilities".

Team CANDU recognizes that one of government's top priorities in making this decision is to protect ratepayers against budget and schedule overruns. That is why Team CANDU is offering Ontario a guaranteed delivery model for new build nuclear.

"The Team CANDU companies have a strong record for delivering projects on time and on budget and we would deliver a new CANDU plant to the people of Ontario in the same way," said SNC-Lavalin Nuclear President, Patrick Lamarre. "Team CANDU member's strong balance sheets and this track record of on-time, on-budget delivery of CANDU projects worldwide will ensure that Ontario ratepayers are protected from the risk of cost overruns."

Ontario's confidence in the ACR-1000 is very important to Team CANDU's ability to successfully market this new reactor in the fast-growing international market for nuclear power plants. Every CANDU reactor sold internationally generates jobs and economic activity in Canada.

"Our economic estimates clearly highlight that choosing the ACR-1000 in Ontario would help unlock a global market for CANDU that is estimated to generate between $15 and $34 billion in Canadian GDP growth through the construction of ACR-1000 power plants globally," said Lamarre. "It also has the potential to create up to 420,000 person years of new Canadian employment between now and 2030."

"At a time when Ontario is losing manufacturing jobs at an alarming rate, choosing CANDU will create new employment and support our domestic industry," said Babcock & Wilcox Canada President Mike Lees. "Foreign competitors cannot come close to providing a similar level of jobs and economic benefits."

The ACR-1000 is currently being considered as the technology of choice for several Canadian markets. Built on the proven success of AECL's CANDU 6 nuclear technology, the ACR-1000 is a Gen III+, 1200 MWe class nuclear power plant with improvements in safety, performance and reliability. Team CANDU partners have designed, built and delivered six CANDU 6 reactors to international customers in the last 11 years - all delivered on or ahead of schedule, and all on-budget.

"The newest generation CANDU, the ACR-1000, is ready for Ontario, Alberta, New Brunswick and the international market," said AECL President and CEO, Hugh MacDiarmid. "The evolutionary technology is based on the well-proven CANDU 6 design, one of the world's most reliable and best performing power reactors."

All nuclear power plants in Canada are CANDUs and Ontario's 18 CANDUs in service supply more than half of the province's electricity needs.

"We have a proven supply chain here in Canada, the majority of which is based in Ontario, that is fully mobilized and ready to support a new CANDU project," said Organization of CANDU Industries President Martyn Wash. "A well-developed supply chain is critical to the success of a large construction project like a nuclear plant. CANDU is by far the best choice for Ontario's next nuclear power plants and Team CANDU's proposal makes the most economic sense for Ontario."

"Premier McGuinty is urging all of us to 'shop Ontario' for the good of our local economy," said Lamarre. "We are asking him to do the same now, and shop Ontario to support the thousands of Ontarians in the CANDU industry."

About Team CANDU

Team CANDU is a joint initiative between five of the world's leading nuclear technology and engineering companies who have joined together to deliver a turn-key service and competitive solution for building new nuclear power plants in Ontario. Members of Team CANDU include Atomic Energy of Canada Limited, Babcock & Wilcox Canada, GE Hitachi Nuclear Energy Canada Inc., Hitachi Canada Ltd. and SNC-Lavalin Nuclear Inc.

Backgrounder

How the economic estimates were calculated

The estimates for the expected economic benefits from a new build in Ontario were calculated using a three step process:

1. A detailed inventory of all individual cost items involved in an ACR-1000 build was assembled, showing the dollar value of all procurement and labour necessary to build a twin reactor in the Ontario market.
2. For each individual cost item, the expected value of Canadian-sourced vs. foreign-sourced inputs was determined.
3. The detailed cost inventory was supplied to Statistics Canada, who used these inputs to run their standard input-output model calculations. This led to estimates of both resulting GDP impact and job creation impact on the Canadian economy.

The estimates for the expected economic benefits flowing from expected CANDU success in the growing market for global nuclear new builds were calculated using a six-step process:

1. Similar to the domestic analysis noted above, a detailed inventory of all individual cost items involved in an ACR-1000 build in a typical foreign market was assembled (these costs will generally be different than the costs involved in a domestic build because of local wage rates, etc).
2. For each cost item, the expected value of Canadian-sourced vs. foreign-sourced (either localized in the market where the build is taking place, or sourced from a supplier in a third country) was determined.
3. The detailed cost inventory was supplied to Statistics Canada and, similar to the domestic analysis noted above, Statistics Canada calculated the estimated impacts to the Canadian economy using their input-output model tool.
4. Three scenarios (a low, medium and high) for the size of the future global market for new nuclear construction between now and 2030 were selected. The "low" and "medium" scenarios reflect projections for expected nuclear power capacity published by the OECD's International Energy Agency (reflecting their very conservative "reference case" scenario and their "alternate policy case" scenario). The "high" scenario reflects a more aggressive projection for expected nuclear power capacity published by the International Atomic Energy Agency.
5. CANDU's future potential market share of the growing global market for new nuclear power was estimated by calculating historical CANDU market share of the global market for new builds from 1995 to 2005, which was 10.2 per cent of the total capacity built during that time period.
6. Finally, the Statistics Canada estimated Canadian GDP and job creation impact for each CANDU reactor built in an international market was then combined with the number of expected CANDU builds (taking into consideration both the various scenarios for market growth and the expected CANDU future market share) to arrive at the range of estimates shown for Canadian economic impacts from CANDU builds in international markets.

For more information contact:

Sophie Awai - 416-322-3030, Ext. 227 sophie@trilliumpr.com or Josh Turner - 416-322-3030, Ext 232 josh@trilliumpr.com