As I mentioned yesterday, I am doing some homework this weekend by reading Thomas Friedman’s “Hot, Flat and Crowded”. For a variety of reasons that I may share next week, sleep has not come terribly easy the last couple of nights. Tom has not made it any easier; his book has stimulated a great deal of contemplation. I do not agree with everything he says, particularly since he has apparently been partially informed by Joe Romm and Amory Lovins. I am pleased to report, however, that Friedman is apparently a deep thinker and curious journalist who has traveled widely and listened to a variety of opinions to form his own perspective.
Despite his frequently repeated calls for “renewable energy, including wind and solar” that sometimes led me to believe that this would be one more book preaching a doctrine of soft energy that categorically excludes nuclear power, Friedman also includes some very important statements indicating that he is on his way to enlightenment. Here is an example:
“Another way to underscore this point is with a question: When was the last big breakthrough in clean energy production in the United States? Answer: 1957 — with the opening of the world’s first central station commercial nuclear reactor, located in Shippingport, Pennsylvania. That’s right — we have not had a scale breakthrough in clean energy since the days of filterless cigarettes and segregation.”
Friedman, Thomas, Hot, Flat and Crowded, Farrar, Straus, and Giroux 2008 p. 247
In my book, anyone who recognizes that commercial use of nuclear fission to provide electricity was the most important scale breakthrough in “clean energy production” of the 20th century has demonstrated an unusual and valuable ability to think independently. Here is another excerpt that reinforces the idea that Friedman can be a valuable ally for people who believe that nuclear fission technology needs to be employed and incrementally or even revolutionarily improved:
“Finally, we built over a hundred nuclear power plants in the quarter century before Three Mile Island brought a halt to all nuclear plant building in America. We need to to do the same thing again, and we need to go on a crash program to extend the life of those nuclear plants we’ve already built.” (Emphasis added)
Friedman p. 264
I need to add a little context. That paragraph comes at the end of section full of actions that power producers and others should be taking to reduce emissions and that they would be taking if the market was sending a proper price signal that told decision makers that dumping their waste into the atmosphere is no longer free. The challenge for any nuclear advocate who can capture Friedman’s ear is to reorder the list, putting nuclear expansion at the top rather than at the bottom. We need to help him remove that preface of “Finally” from his writing and speaking. He gives us a hint on how to do that with the rest of the paragraph that is quoted above:
The threat of a nuclear leak, with today’s new technology, is much less serious that the threat from climate change. But to build a new nuclear plant costs a minimum of $7 billion (emphasis added) today, and would take probably eight years from conception to completion. Most CEO’s have about eight years in office, and there are not a lot of utility CEO’s who would bet $7 billion – which might be more than half of their company’s market cap – on one nuclear project. For many utilities in prior decades, the construction of nuclear plants became a “you bet your business” proposition, leading to the demise or economic crippling of utilities like the Long Island Lighting Company and the Public Service Company of Indiana. Therefore, because of the risks of lawsuits and delays, it is probably going to take a minimum government loan guarantees to relaunch America’s nuclear industry.
The concept of an industry with an entry level product price of $7 BILLION is the reason that the nuclear industry cannot make a firm sale in the US. There is no place for experimentation and learning if the initial toe in the water is a $7+ billion bet. Those small reactors that I keep talking about have the potential of allowing well qualified, experienced companies to test out new reactor design concepts for less than 1/100th of that price.
I will acknowledge that a 10-50 MWe plant that can be purchased and installed for $30-100 million may not produce the ultimate in low cost electricity because it will be a first of a kind without complete economy of scale. It may need more people per unit power output, and it will have higher per unit costs for initial licensing activities.
If, however, the first few units of those plants can be proven to be effective in areas where electricity costs are already well above the average, the almost inescapable economies of series production can kick in and allow manufacturers to drive down the unit cost as they climb the learning curve and are able to reuse the investments that they made in producing the first few units. Engineering, design, tooling, and licensing are all one time costs. If they can be amortized over more units the per unit cost drops rapidly. The learning associated with doing the same job more than once or twice can also greatly reduce the time that it takes to produce and install a new plant.
Smaller plants can address both of the obstacles that Friedman mentions – the consequences of the always present risk of failure for any single project, and the time it takes to complete the project so it can begin producing revenue. During my years of talking to potential customers for Adams Engines, it became very clear that the time from a firm order to plant operation was an extremely important metric for finalizing a sale. Customers who are willing to spend tens to hundreds of millions of dollars for a new power plant want to know when that plant will be ready, and they want to make the decision to buy as close as possible to the time when there will be enough demand in the market to sell all of the power that the plant can produce.
When nuclear plant suppliers can get to a position of relative cost and schedule certainty with a greatly lowered first entry price, they will be able to attract buyers who will pay a bit of a premium on the predicted levelized cost per unit of electricity.