Role of small and micro modular nuclear reactors in Canada's low-carbon energy system transition: A stochastic optimization-driven general equilibrium model

Achieving economy-wide net-zero emissions requires rapid transformation from fossil fuels to low-carbon alternatives. Developing emerging nuclear technologies such as small and micro modular nuclear reactors (SMR/MMR) has been recognized as vital for greenhouse gas emissions mitigation. Nevertheless, uncertainties existing in technology adoptions, policy factors, and socioeconomic development pathways challenge SMR/MMR deployments. It remains unclear how these uncertainties interact to shape potential deployment pathways and the resulting cascading effects on economy-wide sectors. In this study, a stochastic optimization-driven general equilibrium model is developed to explore potential SMR/MMR deployment pathways and assess the associated energy, environmental, and economic implications in Canada. Under various climate, energy demand, and technology deployment scenarios, the results reveal that accelerated SMR deployment (growth rates exceeding 33 %) could contribute to 18.6 % of Canada's electricity mix by 2050, while MMR deployment exhibits niche applications requiring tailored policy supports. Policy interaction analysis shows strategic priorities shift from carbon tax mechanisms to coordinated emerging-technology deployment and demand-side management for maximizing environmental benefits across socioeconomic development pathways. From an economic perspective, accelerated SMR/MMR deployments demonstrate uneven sectoral impacts, with positive impacts on manufacturing and mining sectors while negatively impacting competing energy technology sectors (e.g., gas-fired power). The findings can inform the formulation of effective policies to integrate emerging nuclear technologies into existing energy portfolios to facilitate Canada's transition to a sustainable future.