It’s not too early to think about what needs to be done in 2010
[Updated 12/30/09 with a few new observations and an opportunity to participate in an online discussion forum about the impact of new social media on the global nuclear energy industry.]
[Update 01/18/10: Idaho Samizdat crosses the pond! This blog post was reprinted in the January 2010 issue of Nuclear Engineering International.
Claims that one will turn over a new leaf in January, via new year’s resolutions, often get a bum rap. For example, will you go to the gym and lose all extra pounds gained during the holiday season? Usually, the rap is deserved because our good intentions fade by the time the Superbowl game hits the TV. That doesn’t mean it isn’t a good idea.
As someone who spends a fair amount of time thinking about the future of the nuclear energy industry in the U.S., I’ve organized my thoughts to describe what I think are four key priorities for 2010. In short, these are my proposals for new year’s resolutions for the U.S. nuclear industry.
Critics of the nuclear industry are focused on fault lines
There is a lot of uncertainty about the future of the nuclear renaissance in the U.S. Critics are exploiting the fault lines that have already appeared, and some, under the guise of scholarship, cherry pick their sources to make the case for failure. Their objective is to sow fear, uncertainty, and doubt in the minds of business and government decision makers.
I’m not prepared to accept a long-term future for the U.S. as being an agnostic on nuclear energy while the U.K. France, Italy, India, China, and other countries put the pedal to the metal to build dozens of new reactors to meet the challenge of global climate change.
Further, if the U.S. wants to be taken seriously in terms of its nonproliferation objectives, it must do more along the lines of the 1-2-3 agreements it inked with India and the UAE. It must support deals that produce U.S. jobs at home and export of nuclear technologies, including fuel, for commercial projects in nations that set aside ambitions to have nuclear weapons.
Here then are four new years' resolutions for the nuclear energy industry.
Four fearless futures for nuclear energy in America
Funding A key path to meeting the challenge of public acceptance of nuclear energy in the U.S. is widespread stock ownership of the plants through publically-traded corporations. In order for utilities to develop stock offerings, the U.S. government must place the full faith and credit of federal loan guarantees behind the new plants.
The amount of coverage should be in the range of $200 billion over three decades, which is enough to support about two dozen new reactors. Without the loan guarantees, few utilities have the market capitalization to “bet the company” on a multi-billion dollar investment in a new nuclear reactor. Loan guarantees are not subsidies. They are no different than the crop insurance offered to farmers to insure food gets to your table. Why would you not want the same certainty for electricity when you flip the switch to turn on the lights?
Workforce The second critical issue which requires attention is developing a new cadre of nuclear engineers and skilled trades capable of building new reactors on time and within budget. Foreign competition will raid U.S. engineering programs for talent unless the federal government puts in place a scholarship program and partnership with industry for jobs to channel graduates to U.S. projects. Secure funding for new reactors, via loan guarantees, will convince engineering students to enter the nuclear energy field.
Supply Chain The third critical issue is revitalizing U.S. manufacturing capabilities including development of a facility to produce large forgings, e.g., 400 tons or more, for reactor vessels. There are three manufacturing centers under development by Areva in Virginia, Shaw in Louisiana, and Babcock & Wilcox/McDermott at locations in Ohio and Indiana. However, it is more likely the next global sources of large forgings will be in South Korea and India unless the U.S. industry makes it a priority.
Without these capabilities, the U.S. new nuclear build will create demand that will drive up the global costs of nuclear reactor components and produce delays in construction. For instance, despite increases in capacity, Japan Steel Works reports a three-to-four year wait time for 400 ton reactor vessels. The price just to get in line is measured in millions.
If the U.S. wants to build reactors on time and within budget, it needs to have its own supply chain. Everyone else building reactors wants to complete their master equipment list from the same suppliers. Right now we are in a situation where reactor parts come from Japan, fuel comes from Russia, and the turbines come from Europe. Plus, home-grown supply chains mean high paying manufacturing jobs for U.S. workers.
Fuel Cycle The fourth critical issue is to resolve issue of management of the spent fuel by developing two strategically located 500 ton/year recycling plants. Related to this initiative is the need for a commercial MOX fuel manufacturing capability.
The final part of this initiative is development of commercial versions of fast reactors to burn the MOX fuel and complete the fuel cycle. The U.S. MOX plant being built at Savannah River will use weapons grade plutonium as its feedstock, and cannot be considered in the near-term as a facility in this commercial spent fuel initiative.
This strategy, which needs to evolve through R&D, pilot projects, and commercial acceptance, is far more cost-effective than the burden of indefinitely storing tens or hundreds of thousands of tons of spent fuel and the loss of the energy potential of the spent fuel itself.
Addendum 12/30/09
Nuclear energy communications
At a panel discussion held at the ANS winter meeting Nov 17 about how the news media covers the nuclear energy industry, four seasoned journalists said one of the issues they have with the industry is that it is unclear about its priorities and does a poor job of communicating them.
One of the outcomes of the ANS meeting is that a discussion forum has been created to address the issue of how the nuclear industry uses new social media to communicate information about itself to a wider audience. If you are interested in this topic, please send me a one sentence email with a statement of interest, affiliation, and a valid email address. I'm at: djysrv [at] gmail.com. You'll get a reply with information on self-service registration. There is no cost to participate in the forum which is hosted at NuclearStreet. So far 110 people have signed up.
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7 comments:
Re: Funding, the industry might also take a harder, disciplined look at its private sector options for construction cost guarantees:
Surety Bonds for Nuclear Energy Facility Construction Cost-Savings
I think that the industry would be well served by studying how the high tech industry finances the development of capital intensive, technically risky production facilities. They recognize that banks are not capable of making loans to such an enterprise and they recognize the difficulty of putting long term investment decisions into democratically controlled processes that have the risk of being captured by financially stronger, more politically connected competitors.
In general, they sell their investors on the growth prospects and build up market capitalization by meeting or exceeding sales projections on a routine basis. I believe that nuclear energy technology can be a terrific investment if devlopers would adopt that model. For example - I would love to buy a few thousand dollars worth of Hyperion, NuScale, and B&W to put in the same part of my portfolio that has done so well with Apple.
You make a good case on all four points. I think, though, that financing won't be a serious challenge. People are looking for good investments. What makes clean energy a good investment is this: we have to set a policy that utilities will use clean energy whenever it's available. That is the whole point of developing clean energy and if utilities are free to choose whichever source is cheapest we'll never solve the climate-change problem. Such a policy assures investors that a market will exist for the electricity produced.
Will other countries hire trained Americans away? It could well be that the US will hire trained foreigners away. In either case, setting a clear policy will be sufficient to attract new workers.
You seem to be very informed about the nuclear energy industry, so I do not say this lightly.
In my view, your concept of developing fast reactor technology is plain wrong and a big red herring for the industry.
MOX manufacturing capacity, on the other hand, could be the very best solution, HOWEVER, only if it is manufacturing thorium-plutonium MOX -- not, uranium-plutonium MOX.
Thorium-plutonium MOX:
- Is much more effective at incinerating waste Pu, hence leaving little or no Pu or minor actinides in the MOX cycle waste, as opposed to UMOX, which generates as much TRU as UOX, if not more;
- Is 30 times more energy efficient than UMOX on a per-unit-of-mass basis, owing to: no enrichment, higher neutron economy, higher fission rates;
- Obviates the need for the ludicrously expensive FBR program, which has never been proven to work in any context whatsoever in its entire history;
- Uses thorium which is 4 times more abundant than uranium, obviating the need to reprocess DU -- thorium oxide can simply be (cheaply) mined.
The USA must set aside the ridiculous notion that it must invest tens of billions of dollars and 30 to 40 years into the FBR program, when they can have a fully functional (tested, permitted), safe, energy-efficient fuel with only tens of millions of dollars and 10 years.
This is where the debate must be directed: Into thorium!
Good comments all. I just completed a pre-siting study in which we looked at the feasibility of locating a small nuclear reactor at a DOD facility. They have money now and are under directions to commit to an "energy security" strategy ASAP. They have skilled people available. A nuclear reactor was their first choice. They chose geothermal.
It's time to field the team and we're still arguing among ourselves about the game we're willing to play.
I think another important point is regulatory relief. It is silly that it takes longer to get a license to build a plant than it does to build it. The license process should be streamlined to let new plants be licensed in less than 12 months. There should also be a comprehensive review of current regulations to make sure they are really cost effective in improving safety and relevant to current technology.
This would greatly decrease the construction cost and reduce the uncertainty of plant construction. Uncertainty is a huge part of the equation, because no utility wants to be stuck with another Shoreham.
It was obvious that when the economy tanked the Nuclear Renaissance was going to hit the skids down the line. This is now coming to fruition as my own as well as other utilities are putting on the brakes to plans for new builds. There was a lot of enthusiasm in the Renaissance at the beginning which coincidently climbed with the stock market. Unfortunately, the nuclear industry was going in too many directions at once with scarce R&D money and it’s going to become even scarcer. I think that this is best illustrated by the exuberant enthusiasm regarding Generation IV reactor research which was way out of line with the reality of such plants being at least 30 years into the future. Why invest now in an educational infrastructure that is based on so many unknowns and could produce future jobless talent? The best advice in these type of cases is narrow your sights and pursue what is achievable.
As for nuclear loan guarantees, there is pro and con for this approach which doesn’t even include the con that are ideologically against nuclear power. The laissez-faire marketers believe that an economically sound investment can be made more efficiently than one hamstrung by the government. The pros like your self believe that it is needed to get the utility CEOs off the dime and it will prove to be economically sound once the plant is operating. I really can’t tell which approach is better but I’m beginning to see that the con approach might have some merit, only if I was better able to believe in the soundness of the invisible hand.
As you well know reprocessing of nuclear fuel is technically and environmentally sound as well as being a technology that has developed a foothold in a few other countries. Unfortunately it has always proved to be uneconomical unless there is a sacristy of natural uranium for which at least one study that I’ve seen projects a 200 year supply. Thus the current once through fuel cycle for thermal LWRs will likely prove cost effective well into the future. The utility CEOs will always follow the path of the least risk at the least cost into the nuclear future. It’s simply a natural law of organizational physics. There may be one bright hope though and that’s the mothballing of underground storage of spent nuclear fuel at Yuca Mountain. The backup of on site storage of spent fuel may become so economically onerous that it does become economical to reprocess. Whether or not the recovered fuel is reused is another story but at least its some progress.
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