Podcast Summary
Global Nuclear Deployment: Despite challenges in the US, nuclear power is experiencing significant growth globally, primarily in regions with high electricity demand, and over 30 countries are exploring their first nuclear power plants, mostly in Asia, Africa, Central America, and South America.
While nuclear energy faces challenges in the United States, globally, there's significant growth in nuclear deployment. Nuclear power is primarily being built in regions with high electricity demand, such as East Asia, South Asia, and Central Asia. Additionally, there are over 30 countries exploring their first nuclear power plants, mostly in Asia, Sub-Saharan Africa, Central America, and South America. Notably, even countries that had planned to phase out nuclear power are reconsidering due to recent energy crises and geopolitical events. For instance, the UAE's Barakah Nuclear Power Plant, which is the largest single power project in the world, generates 20% of the country's electricity. The cost of nuclear energy is a crucial factor in its deployment, and understanding the global context can provide insights into the challenges and opportunities for the future of nuclear fission.
Nuclear power cost: Cost of nuclear power varies greatly, from $2,200 to $8,000 per kilowatt, with a moonshot goal of under $2,000 in US for competitiveness. Building multiple reactors with standardized design can keep costs low.
The cost of nuclear power varies greatly depending on the location and the specific project. The cost can range from as low as $2,200 per kilowatt in South Korea to as high as $8,000 per kilowatt in the US. A moonshot goal for nuclear cost in the US is under $2,000 per kilowatt, which would translate to around $60 per megawatt hour, making it competitive with other clean base load power sources. However, historically, the cost of nuclear power has been even cheaper than this, with reactors built in the 1960s costing less than today's projects. The key to keeping nuclear costs low is building a large number of reactors using a standardized design, which allows for economies of scale and learning as the industry progresses.
Nuclear infrastructure costs: Half of the nuclear power plant costs come from infrastructure outside the reactor, with 35% going towards ancillary costs like engineering, procurement, and construction management.
The cost of nuclear energy varies greatly depending on the country and the specific design of the reactors. France, for instance, started with high costs but learned and improved with each new design. China, with the most nuclear under construction, is estimated to be building at around $2,500 per kilowatt, but the actual cost breakdown involves more than just the nuclear component itself. About half of the costs come from the power plant infrastructure outside the reactor, such as cooling systems and groundwork, which are heavily regulated and unique to each project. The actual nuclear component is only 12% of the total cost. A significant portion, 35%, goes towards engineering, procurement, construction management, and owners costs. These ancillary costs add up due to the unique nature of building nuclear reactors, which are more akin to large infrastructure projects than mass-produced goods.
Nuclear soft costs: Addressing soft costs in nuclear energy by having fewer companies build more reactors to achieve economies of scale is a potential solution, but the history of the industry and the emergence of new technologies may impact the number of successful companies.
While the cost of building a nuclear reactor itself may not be the primary issue, the costs associated with engineering and construction outside of the reactor, often referred to as "soft costs," are a significant concern. This issue could potentially be addressed by having a smaller number of companies building a larger number of reactors to drive down costs through economies of scale. However, the history of nuclear power and the desire for market competition raises questions about how many companies can realistically succeed. The potential for new technologies, such as those that are modular and rely on passive safety, offers promise for cost savings. Research suggests that smaller energy technologies generally have faster learning rates, which could also apply to nuclear. Ultimately, the key to making nuclear energy cost-effective is to build and demonstrate these new technologies first to prove their viability.
Nuclear Energy Regulation: Regulation plays a role in nuclear energy costs, but lack of demand and past construction project mismanagement are the main reasons for high costs in the US nuclear industry.
While Antenna's expertise and creative abilities help organizations lead in climate narratives by focusing on key trends and moments, the cost and regulation of nuclear energy in the US is a complex issue. Traditional nuclear reactors rely on heavily over-engineered systems for safety, like robust pumps for cooling, while advanced reactors use convective cooling and engineering to move heat, reducing the need for such pumps. Regulation is a factor in nuclear costs, but lack of demand and volume are the main reasons for high costs in the US. The industry's past mistakes in managing construction projects and supply chains also contribute. To bring down costs, the US needs demand policies and regulatory changes, especially for modular nuclear plants.
Nuclear energy industry challenges: The nuclear energy industry in the US faces challenges such as rising costs and regulatory hurdles, but is optimistic about the future with several projects in development and a growing market
The nuclear energy industry in the US is experiencing a renewed interest due to increasing electricity demand, decarbonization policies, and advancements in nuclear technology. However, the cancellation of the New Scale project serves as a reminder of the challenges in bringing new nuclear projects online, including rising costs and regulatory hurdles. The industry is diverse, with various designs and sizes, catering to different markets. Small reactors, including micro reactors, are gaining attention due to their potential for faster commercial demonstrations. The resumption of nuclear in the US hinges on overcoming the challenges of uncertainty and cost, especially for first-of-a-kind projects. Despite these challenges, the industry is optimistic about the future, with several projects in the pipeline and a growing market for nuclear energy.
Nuclear energy business models: Companies in the nuclear energy sector are adapting their business models to secure orders and manage financial risks through fixed pricing and build-operate models, driven by changing energy policies and the need for energy security.
Companies in the nuclear energy sector are adapting their business models to better meet market needs and manage financial risks. This includes setting fixed prices for large projects and exploring build-operate models for smaller projects. The shift in approach is driven by the need to secure orders and address the financial strain of large-scale projects. Additionally, the optimism towards nuclear energy is growing due to changing energy policies and the need for energy security following global events like the Russian invasion of Ukraine. Despite challenges, the role of nuclear energy in displacing fossil fuels and contributing to climate change mitigation efforts remains significant.