The Canadian government is set to restructure Atomic Energy of Canada Limited (AECL) after completing an 18-month review of the state-owned company , which could result in a large stake in AECL being sold to private investors.
Natural Resources Canada (NRC), the government agency responsible for monitoring energy production, has just published the report on the Canadian federal crown corporation. NRC says AECL’s business model must be changed in order to allow Canada to “fully participate” in the nuclear industry’s global expansion.
It proposes achieving this by restructuring AECL so that is government-owned but outsources operation of its facilities to one or more third parties through a competitive bidding process.
AECL may be split up
NRC also recommends that AECL be split into two separate entities. One would comprise its profit-oriented CANDU reactor division, which handles the refurbishment and servicing of existing reactors and the development and marketing of new ones. The other division would comprise AECL’s research and technology division, which handles its public policy activities.
In 2008 AECL earned revenues of C$558 million (€355 million; $501 million) from its reactors, services and fuel activities.
CANDU technology accounts for 100 percent of the installed nuclear capacity in Canada. There are at present 18 operational reactors provided by the company in the country. AECL also provides reactors to international clients. Nuclear energy accounts for 15 percent of Canada’s energy needs, more than 50 percent of which is in Ontario.
The review concluded that AECL is not currently positioned for success, adding that it is undersized and undercapitalized in relation to its international competitors, which include AREVA, Westinghouse/ Toshiba, GE-Hitachi, and Mitsubishi. These competitors are likely to be among those carefully monitoring the process.
Research carried out by National Bank Financial found “significant private sector interest” in AECL’s commercial operations, although little interest in the company’s research operations.
NM Rothschild and Sons has been mandated by the NRC to develop the restructuring plan.