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Economic Modeling of the Kyoto Commitment

•Canadian Nuclear Association Modeling

–Supplemented the AMG modeling

–Same model as AMG with the following exceptions:

•Start time – 2002for CANDU 6, 2005 for NG CANDU

•Build time – 5 years

•NG CANDU cost 30% less than CANDU 6 per the AMG model

–The model decided to add 24 NG CANDU’s to Canada’s electricity supply mix

–Results provided to the National Climate Change Process

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	These results encouraged the Canadian Nuclear Association to reassess these results with some more upbeat input assumptions with respect to nuclear electricity. The Canadian nuclear industry knows CANDU plants can be built in less than five years. A higher degree of urgency with respect to lowering greenhouse gases could lead to earlier decisions to deploy more nuclear plants. The nuclear industry has also started to build on lessons learned with the first commercial reactors to come up with lower cost designs.
	In essence, we repeated the analysis of the Analysis and Modeling group to incorporate modified input assumptions for start and build time. An additional case incorporated the lower cost of the new design. The model then chose to build new nuclear plants – essentially in place of sequestration from fossil plants and the expansion of hydro electricity. The lower cost of electricity also resulted in some expansion of electricity use displacing other energy sources. The cost reduction of nuclear of 30% changed the model predictions quite dramatically, illustrating the high sensitivity of the least cost model to economic conditions.
	These results are available to the National Climate Change Process.
	References on NG CANDU available at: http://www.cns-snc.ca/events/CCEO/table_cceo1.htm
	Torgerson, David F., “Reducing the Cost of the CANDU System” CNS Climate Change Symposium, Ottawa, Ontario, 1999 November 19
	Wren, D.J. and J.M. Hopwood, “The CANDU Contribution to Environmentally Friendly Energy Production”, Climate Change 2: Canadian Technology Development Conference, Toronto, Ontario, 2001 October 3-5.