Iter Canada pushes ahead with financing strategy as it awaits federal approval of bid

Iter Canada is awaiting the federal Cabinet's decision on whether to support Canada's bid to host the massive Iter prototype fusion reactor and appoint a negotiator to carry the proposal to the international body that will ultimately choose the winning site. If federal approval is granted, as anticipated, Iter Canada president and CEO Peter Barnard plans to officially unveil its bid March 1st at Toronto's Empire Club - a venue reflecting the strong private sector support the bid has generated.

Such an announcement would neatly dovetail with a meeting of the Iter International council in Toronto in late February. And it would represent a major milestone after nearly three years of activity by Iter Canada to marshal a wide array of backers from government, industry, labour, the financial community and the academic sector (R$, July 28/00). Canada still faces competition from rivals Japan and France to host the facility, and those nations are expected to formally announce their bids by August or September.

If successful, the prototype Iter reactor would be capable of producing thermal energy in amounts equal to that of a commercial power station and go a long way towards demonstrating the feasibility of fusion energy as a viable alternative and replacement for fossil fuels.

Iter Canada now has three separate reports supporting its bid to locate the fusion research facility in Clarington ON near the Darlington nuclear power plant, and a long list of commitments from government and industry contingent upon a successful bid (The reports can be viewed at www.itercanada.com.) It also has a 250-page document prepared by an informal group representing more than 100 companies and unions groups committing to the project. But the organization hopes its reliance on private sector financing will give the bid the momentum it needs to convince the international authority that Canada's advantages outweigh those of its rivals.

"We've met with a lot of federal officials who have never heard such a proposition," says Barnard. "This is the first time in Canada a research project has been proposed with no federal financing and the first time in the world there's been a proposal for a private sector-supported major research project."

While no federal funding is being sought, Iter Canada's plan includes $1.5 billion in investment from private interests. The Ontario government has indicated it will provide $322 million during the early stages of the project - an essential commitment that will allow Iter Canada to line up its private financing. Ontario will also be providing $700 million worth of tritium through its Ontario Power Generation Inc, as well as the site itself, which is valued at $1 billion.

$15 BILLION COST

The facility's eight-year construction phase is expected to cost $6.6 billion and begin in 2003, with another $8.4 billion in operating costs over its projected 20-year life span. Of the construction costs, $5.5 billion will be spent on design and components by Iter's international partners in their own countries, while $1.1 billion will be spent in Canada.

"We hope to launch the project formally March first and then we'll have one and half years of negotiations," says Barnard. " That will be tough because the private sector requires a lot of protections in the international agreement. We have to assure that the site will be licensed."

Iter Canada recently received a commitment of $22 million from three of its largest corporate backers - SNC Lavalin, BFC and AMEC - to finance the works necessary to complete the agreement, and a similarly-sized commitment is pending from the professional unions involved in the project.

A report prepared by The Impact Group has identified 66 major technologies and technological activities where the Iter project will be pushing the boundaries of current capabilities, leading Barnard to assert that the project "will be a technology goldmine for our country".

"We need policies to encourage this and be pro-active," he says. The benefits to industry will be even greater than the benefits to government."

According to an Ernst & Young report on the economic, industrial and social impact of siting the Iter facility in Canada, the project would raise Canada's gross domestic product by $6 billion over the life of the project, with Ontario enjoying 87% of that increase. The project is also expected to create about 68,000 person years of employment for Canadians.

The current competition to host the Iter facility represents the best bet to start a project that has been plagued with delays and setbacks. The US withdrew from Iter International in 1998 due to the project's lack of progress, but there are strong indications that it may be about to re-enter the process. Barnard says US participation is being encouraged by strong support from the US fusion community and a rekindling of interest in alternative energy sources.

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