How can policy help overcome hurdles to nuclear power in the United States?
Over at The Energy Collective, Jesse Jenkins, who directs the energy and climate policy program at the Breakthrough Institute posed a series of questions about public policy aimed at initiating a discussion about overcoming hurdles to nuclear power deployment. His entering position for the sake of this discussion is that deploying nuclear power is a good thing, so he has made a strong effort to keep the conversation away from the discussion of whether or not the US “should” deploy new nuclear power plants. He wants the conversation to be more about “how” the US should go about the task of enabling that deployment to proceed.
Several of my friends in the blogging world, including Charles Barton at Nuclear Green, Dan Yurman of Idaho Samizdat David Walters who maintains diaries on Daily Kos and David Bradish of NEI Nuclear Notes have weighed in with responses to one or more of Jesse’s nine specific questions for discussion. I have answered two of the questions that had not yet been fully addressed by some of the previous responses. Here is the first one:
Are there specific challenges to the construction of the first few power plants of any particular, and if so, how do these challenges differ from the deployment of these designs at scale?”
There are unique challenges to the construction of a “first of a kind” (FOAK) unit of any technology, whether it is a car, a computer or a sports stadium. The research in this area is deep and includes discussions of learning curves, unexpected interactions, and worker training programs. One unique obstacle that very large nuclear projects face is that the typical estimation errors for the cost of an FOAK unit of 50% or more cause some major headaches because they are very large and scary numbers. On a project estimated to cost $10 billion, a mere 10% estimation error leads to a “billion dollar cost overrun!” Electric utility companies are run by conservative people who have built large projects, they understand that such a response is almost assured, while achieving that level of performance would be quite a coup. For solid, legal “fiduciary responsibility” reasons, they are proceeding cautiously.
One way around this problem is to change the scale of the bet to something more manageable. This is the path that Charles has advocated and that Hyperion, NuScale, and B&W are pursuing with vigor. Even the well established nuclear power plant vendors like Toshiba, the Westinghouse subsidiary of Toshiba, GE, and Areva are taking a new look at starting with smaller plant designs that entail a smaller magnitude of risk.
There are numerous advantages to building smaller power plants in a factory setting, including the lowering of the risk for the initial units. Smaller power plants also allow vendors a more rapid path along cost lowering learning curves. Research has demonstrated that a typical learning curve for constructing the same design will provide a cost savings of 10-20% for every doubling of unit volume. (That caveat of “the same design” helps to explain why the plants constructed during the first nuclear building boom in the US did not achieve a path of cost reductions. We never got around to building a series of exactly the same design by a reasonably consistent work force.)
It is far easier to double unit volume if your units are the 125 MWe mPower™or the 45 MWe NuScale, or the 25 MWe Hyperion Power Module compared to the 1200 MWe AP1000 or the 1600 MWe Areva. I fully understand that there is an “economy of scale”, but a supply chain that is producing 10 mPower™reactors each year achieves similar scale as one that produces one AP1000 each year. The difference is that the company building ten units each year has a much greater opportunity to traverse an effort saving learning curve, apply new tweaks to the design based on actual operating experience, and provide a work force with the kinds of consistent activity that provides a wealth of benefits to a growing company over many years.
The other huge advantage of going small is that you reduce the size of the required bet to something manageable by a single company. Instead of having to put together a complex partnership with many different decision makers, it is possible to build smaller units based on the “go ahead” of a single decision maker.
Some other time, I will share a bit about what I have learned through conversations with leaders at TerraPower, a start-up with a rather unique advantage over most other nuclear focused companies. They have the backing and personal interest of a man named Bill Gates. That can make a whole lot of the initial challenges associated with starting up a new industry seem far more manageable.
Publisher, Atomic Insights
Host and producer, The Atomic Show Podcast
Founder, Adams Atomic Engines, Inc.
And here is the second question with my answer:
“What barriers to nuclear power deployment cannot be solved by policy and why? What factors are most likely to overcome these barriers (or are they intractable)?”
One hurdle – not really a barrier – associated with deploying any new energy source that is not going to ever disappear is the fact that the energy industry is the largest industry in the world. That industry is full of powerful people who do not like competitors taking away their markets and driving down prices. They have well over a century of experience in fighting interlopers; not always with open and visible tactics.
By its nature as a ubiquitous commodity where many different methods exist to produce a fungible, tradable unit (either heat or electricity) there has been a history of radical price oscillations driven by changes in the supply-demand balance.
Our recent history, which some people consider to be unique, where energy prices increased by 400% over a several year period and then fell by 75% in a month is nothing really new. Back in the Titusville era, the price of petroleum dropped like a rock once production exceeded the capacity of the barrel producers to keep up. Spindletop resulted in a time when oil cost as little as 10 cents per barrel within just a year or two after it had traded for several dollars per barrel.
The top leaders of established enterprises in the energy business recognize very clearly the risks to their existence of any new supply that will upset the balance. Over the years of working together and in competition with each other, they have formed a number of “clubs” like ERCOT, OPEC, EPRI and API that establish policies in one form or another that are designed to smooth the market and prevent price destruction. The industry has a running history of competition among fuel suppliers and fuel choices between coal, oil and gas that are often along national or regional battle lines.
There was an excellent, thought provoking article in The New York Times yesterday that discussed the entry of oil majors back into Iraq. The article discussed how disruptive it would be to the market if Iraq increased its daily output from less than 2 million barrels of oil per day to more than 7 – which some people have described as its potential production level. That increase would only represent an increase of a couple of percent of world energy supply.
Here are the “fighting words” that make up the conclusion to that article:
“The production from these three fields will surely threaten other oil-producing countries and will show the world that Iraq can match Saudi Arabia’s production,” said
Mr. Hassani. “Our share has been taken by other countries, and we will gain our share again from the countries that took it.”
During the first nuclear building boom, the output from nuclear plants around the world steadily chipped away at fossil fuel’s share of the energy market until it achieved our current production level of the equivalent of 12 million barrels of oil per day. Nuclear energy is not “the Saudi Arabia of” anything, it already has a 30% larger share of the world’s energy market than the largest oil producer in the world and it has an almost infinitely larger quantity of “shut-in capacity”.
It is a very safe bet to assume that there will be continued strong opposition – that may be disguised in many ways – against the deployment of energy production systems that result in compact, low marginal cost, reliable, emission-free, geographically flexible energy that can displace coal, oil and natural gas on a massive scale. (The bolded words are points of departure from other alternatives.)
It will not be a near term policy change that will overcome that opposition. My analysis has led me to the conclusion that the best way to turn over the hurdle is to keep exposing the true nature of the opposition until people recognize that the discussion is not a moral one about safety, weapons proliferation or waste longevity – it is simply an economic competition. It is one that pits a very powerful and wealthy group of energy suppliers against the interests of a much larger population of energy customers.
The emotional words of the discussion should be understood by observers in the same way that they understand Apple versus Windows ads or Coke versus Pepsi taste tests. Of course, the energy war of words has far more consequence for the future of human society.
Publisher, Atomic Insights
Host and producer, The Atomic Show Podcast
Founder, Adams Atomic Engines, Inc.
I also posted on Jesse’s questions. It is a good thing that more and more forums are talking about nuclear energy.
I almost agree with you that the question is not a moral one wrt nuclear safety, waste, etc. To me, it is the higher safety, ease of storage of nuclear waste, etc. that give greater moral impetus to increase our use of nuclear energy. When I entered the field in the 80s, it was out of idealism to help make cleaner and safer energy (you will not believe how many thought NucE majors were crazy going into a field that appeared to be a dead end…).
?One way around this problem is to change the scale of the bet to something more manageable.?
Only in the minds of bloggers! If you can not manage a 1000+ MWe large nuke, you are not able to manage a small nueks or even 50 MWe biomass. Bad project management is bad project management. I found in the past those organization that could not managed a large nuke could not manage building a simple SCGT peaking plant. The only difference is media attention not red ink. On the other hand world class organizations that did a good job of building large nukes also do a good job on large coal & NG plants. They also do a good with smaller projects too.
Marketing is something else. You look for a need and then supply the best choice. I do not think small nukes are the best choice for the continental US until we run out of waste biomass, coal, and NG. One marker for need is LNG terminals and oil fired power plants. Build big nukes to prevent importing LNG and build small nukes where oil is being imported and there is not a sufficient supply of biomass.
I do not know but it would seem that the US Navy should be making electricity with barge mounted nukes for places like Pearl Harbor, Guam, and GITMO. I would be willing to participate in a letter writing campaign aimed at Virginia senators to get NN shipyard to build them.
Find a market where you have a clear advantage and break down the barriers.
Kit you are confused. There are some excellent, well managed companies that do not have the financial resources to embark on a 10 billion project, but they can certainly take care of a project that is one tenth the size.
I know a lot of very capable construction companies, for example, who can build terrific single family homes but who would be in over their head in building a commercial office building.
In theory, these smaller projects would be easier to “fix price” and therefore finance. Your question at the Nuclear Construction Summit 2009 went straight to the heart of the issue: http://atomicinsights.blogspot.com/2009/10/avoiding-hurdles-by-going-small-more.html
As I mentioned to you on a break there, I have a few thoughts in this regard at “Surety Bonds for Nuclear Energy Facility Construction Cost-Savings,” a sort-of-a-blog post here: http://www.suretyinsider.com/surety-bond-nuclear-construction.html
These smaller projects make the ideas therein even more achievable than I had contemplated before the summit. This is certainly a worthy parallel path.
Not confused at all. Bloggers make up stuff. You are blogging about fantasies. Get real if you want to venture into the commercial world.
If you do not have the resources for a big nuke then you do not have the resources for small nuke. Show me the small nuke utility operator. All of the smaller nuke plants that I can recall are now run by bigger companies with strong nuke programs.
An example would be the US Navy, very experienced at operating small nukes. Can you tell me why no navy bases are powered by small barge mounted nukes?
“No navy bases powered by small nuclear” – for the same reasons that large plants are opposed. Powerful interests already supply them with energy and want to continue to do so. The same issues would be raised ie. unsafe operation, terrorist threat, and waste handling and storage. Why aren’t all military installations in the US powered by nuclear to save money and oil for vehicle fuel?
It is unlikely that a domestic naval base would need a small reactor since the U.S. grid is not tied to a hostile nation 🙂
However, a USAF base in a remote part of the world might be a “customer” for a 25 MW reactor that could be delivered in pieces on a C-17 Globemaster III which has a maximum payment of 171,000 lbs.
Kit: I understand your proclivity towards large solutions to large problems, that from an economy of scale standpoint, it might make sense to build 2 1200 MWe units to handle a 2400 MWe load, but I think that we’re talking past each other here.
Yes, large plants can be built, they can run GREAT – but size comes with a cost of its own. That cost comes in complexity, personnel, and also safety. There’s also a thermodynamic downside there, too, that a large plant, by itself, can never be inherently safe, as passive and active residual heat removal becomes necessary.
With a small enough plant – one “right-sized”, you don’t have to have passive and active decay heat removal anymore, as the core can’t generate sufficient decay heat to damage itself. Inherently safe reactors – those that cannot suffer core damage – are the way to escape the NRC, as there’s no reason for major regulation of something that can’t hurt people. Plus, with a reactor designed correctly, there would be no evacuation zone or EPZ necessary.
I would argue that the amount of NRC regulation lost and safety gained by using an inherently safe design would make inherently safe reactors completely revolutionary, as you could put them anywhere, from in large plants, say of 40-80 75 MWth modules to small plants of just 1 or 2 modules on the town outskirts.
Kit – you’re comparing apples to oranges here. Yes, smaller reactors that aren’t inherently safe, might not have as many compelling reasons for existing compared to large plants. (They do offer considerable simplification, reduction of costs, and scalability here, though.)
But where small modular reactors shine is when they’re built in inherently safe configurations, because that would change the game entirely, due to rendering most NRC regulation superfluous, allowing siting nearly everywhere there’s private property…construction times could be reduced to 3 months, maybe, costs could be fixed, commercial financing offered, municipal utilities could purchase for those sizes, all that would be necessary is a railroad spur on the site to ship the reactor back out when it needed refuelling. Plus, a digital control system for the nuclear part of the plant could really bring down nuclear operations to a reasonable level for the plant owners, who would just worry about making electricity, not making their reactors work.
When I mean inherent safety, I mean walk-away safety: the operator can literally insert rods, turn off all power, block all cooling ports, and walk away, and 30 days later, when someone comes back, the biggest thing they have to worry about is samarium preclusion and sending the reactor on a somewhat costly trip back to the factory to be refueled.
This is why I find the small nitrogen/helium high-temperature gas-cooled reactors (GT-MHR, PBMR, AAE, Romanwa Nereus) and the original Hyperion hydride reactor so revolutionary (the new Hyperion reactor is very interesting, too, but I’d like to learn more prior to describing it as inherently safe) – if designed correctly, there’s no real bounding criteria or reason for regulation beyond design certification, perhaps inspection of physical barriers, and perhaps certification that the reactor is built or refueled to spec as it leaves the plant.
If the obstacle to a nuclear renaissance is over-regulation (and that it is, as in the nuclear industry regulation drives costs ever-higher and decimates private sector agility), the answer is to produce something that no reasonable regulator could see a compelling need to regulate in depth.
Navy bases in Guam and Hawaii are tied to the U.S. grid? How about the oil they burn being tied to a hostile nation? djysrv I am think that you have a problem with geography and understanding of US grid. With all due disrespect to the Air Farce (para military organization similar to the boyscouts) and the Army, do we trust them to operate nukes?
Just for the record, municipal utilities do not have to show the NRC that biomass plants are inherently safe.
For those of you who do not understand core physics, thermo, and regulation; “right-sized” does not include nukes.
Oh my. Kit P has a sharp pencil and a short attention span.
I said “domestic” bases thinking about San Diego and Newport News for example.
Please be civil Kit. Anything else simply robs you of your natural charm.
?for places like Pearl Harbor, Guam, and GITMO?
RTFQ and answer it.
Dan if you want to explain to me why we do not build small nukes at grid connected navy bases that okay but I already know the answer. However, I am really interested in the barriers to doing it places like Pearl Harbor, Guam, and GITMO.
Kit, you still don’t seem to understand: municipal utilities wouldn’t have to show the NRC anything, it would be the manufacturer’s job to show the NRC that the reactor is inherently safe once, as in a design certification, and be done with it. The manufacturer could then crank as many out as they wanted. Cookie-cutter reactors – not custom-built models. That’s the power of mass production.
Now, don’t get me wrong, I like biomass. Of all the renewables, except perhaps geothermal on a scale never before seen (e.g. you drill a hole into the mantle and run water through it), it has the most potential. But biomass has a low EROEI compared to nuclear, and I’m not looking for an energy source constrained by biology if it can be avoided.
As for your question about naval bases, I assume that it’s because the Navy, and Naval Reactors, in particular, is in the ship business and not the electricity business, except when electricity is needed aboard a ship. They probably don’t want to get caught out of their niche.
WRT – Navy building and operating land based atomic power plants – a big part of the challenge is the annual budget cycle that requires projects to be fully funded in the year that they are ordered. There are some minor exceptions to this rule, but multi-year procurements are rare. That discourages investment in any project that offers an economic payback over a long period of time.
This is related to a similar question – why did the Navy stop building nuclear powered surface ships – outside of aircraft carriers? The initial capital investment required is a big part of the problem – many Navy budgeters have the opinion that it is easier to request annual procurements for petroleum fuel, though it can be very dicey when there is a big change in price from year to year.
katana0182’s comment about remaining in one’s niche (also known as “swim lane” inside the Beltway) is also relevant.
@Rod – do you think that there’s any chance these days that the Navy brass would be any more willing to consider non-LWRs than when you encountered difficulties trying to get support for gas-cooled reactors?
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