Nuclear's Future: Rising Star or Swan Song?
What role will nuclear energy hold in the future? Will it become a dominant source of clean, reliable power, or will it be replaced by other sources of energy?
Summary: Advanced Nuclear Energy systems have a challenge: by the time they are ready for commercial deployment, it's likely that they will no longer be cost effective. Read why...
Vogtle Electric Generating Plant near Augusta, GA, USA
Before diving in, I want to stress that I have no irrational quarrel with nuclear power, and I appreciate the promise of the emerging designs: thorium reactors; modular reactors; pebble bed reactors and others, as long as they deliver on the promise of not creating an onerous technical debt in the future.
Nuclear reactors have a lot going for them. They provide large amounts of power in a physically small area, they do not emit greenhouse gasses, they provide extremely stable power with very high reliability. And we've been building them for years, so one could assume we understand the issues.
On the other hand, the nuclear industry has something of an image problem, and not without some justification. There are many reasons people are leery of or outright opposed to nuclear energy. The failure of a nuclear plant, however rare, can have much wider and longer lasting consequences than the failure of a gas fired plant. In the United States, we have not fully addressed the long-term storage of nuclear waste products. The dominant fuel for reactors is uranium, which can be weaponized if it fall into the wrong hands.
Advocates of nuclear energy point out that there are solutions to each of these problems: It is possible to design "inherently safe" reactors that simply shut down rather than release radioactive materials in the event of a failure. Newer designs, such as thorium reactors, produce a fraction of radioactive byproducts compared to classic uranium based systems. And reactors can be designed that actually consume rather than generate fissile materials, reducing the potential proliferation of nuclear weapons.
So what's the problem?
Given the proven benefits of nuclear energy (dependable, no CO2) and the promise of newer nuclear technologies (safer, cleaner), it's not surprising that many people are advocating a deeper political and economic commitment to nuclear development.
But it seems increasingly likely that other technologies, such as solar energy coupled with battery storage, will be able to provide similar functionality at a lower cost. In other words, alternate technologies are getting cheaper so quickly that nuclear power can't compete — not now nor in the future.
There are many ways to approach this analysis, but one excellent source of information is Lazard's Levelized Cost of Energy Analysis, version 10.0, from which the following graph was extracted:
There are a few things to note in this graph. First, by far the cheapest form of conventional energy is Gas Combined Cycle (GCC), at $48-$78/MWh. Utility scale Wind Power at $32-$62/MWh appears to be cost competitive, as does Solar PhotoVoltaics at $46-$61/MWh. But that's not a fair comparison: Unlike GCC, Wind and Solar are subject to the whims of weather, and cannot be relied upon to deliver steady power twenty-four hours every day. Nuclear, it should be noted, currently weighs in at $97-$136/MWh.
However, the analysts at Lazard included an extra bit of information: Solar PV + Battery Storage currently costs $92/MWh. There are myriad conditions given on that figure; it's important to read the Lazard report carefully to understand those conditions.
The future of energy is ... still in the future
But to turn attention back to nuclear energy for a moment: at $97-$136/MWh, "conventional" reactor designs appear to be too costly to consider for modern deployment. In fact, according to The US Nuclear Regulatory Commission, only four reactors in the US have active construction applications under review.
But new reactors, many based on Thorium rather than Uranium fuels, have garnered a lot of attention and investor money, spawning an spectrum of efforts. But results all lie in the future: Elysium Industries ("prototype in the next five to seven years"), Flibe Energy (seeking funding), Kairos Power, Moltex Energy (seeking funding), TerraPower (construction within 5 years), Terrestrial Energy (planned launch in 2020s), Thor Energy (operation in 2023), ThorCon Power (prototype in 5 years), Transatomic Power (demo in 2021).
A Race Against Time
Despite all the investments and activity going into advanced reactor design, it's not clear that any will ever be viable, at least not in the US. Here's the reasoning.
Start by assuming that the cost goal for any nuclear plant is "cheaper than Gas Combined Cycle". Let's choose a Levelized Cost of Energy at $35/MWh. Also assume that it will take five years for any advanced designs to get out of research and into production. And if you look on the US NRC's web site, you'll see that permitting takes eight to ten year at a minimum. Assuming that a company can apply for a permit before engineering work is complete, we can expect at least a decade before any of these new plants come online.
In the meantime, the cost of utility scale solar plants has been dropping 14% annually and battery storage by 7%. Going back the the Lazard analysis that solar + battery currently costs $92/MWh, if we assume that the cost of utility-scale solar + battery systems will drop 11.5% annually, then within ten years the cost will be $27.
In other words, by the time any of the advance nuclear technologies make it into production, at least one renewable technology -- solar plus batteries -- will probably be cheaper.
Why This Analysis May Be Wrong
We're making a lot of assumptions. Utility-scale PV systems cover a lot of acreage. We don't know that the cost of PV cells and batteries will continue their exponentially downward spiral. We don't know what policies and politics might inhibit growth. If electric vehicles become a dominant form of transportation, the demand curve for electricity could be radically different than today.
Why This Analysis May Be Right
Each of the advanced nuclear technologies listed above has significant technical, financial and regulatory hurdles to overcome before going into commercial production. In short, there's substantial risk between now and commercial rollout.
A basic truth of a nuclear generator is that economy of scale is important: we haven't yet figured out how to build small "community scale" generation. This is in contrast to solar + battery technology, where it's feasible to deploy small or large systems according to need.
A corollary to that is investor risk: to develop a nuclear plant requires large capital outlay, and a planning and construction schedule measured in decades. As a consequence, a large part of funding goes into servicing the capital costs. By contrast, solar + storage systems are now being designed and deployed in less than a year, so capital becomes productive quickly.
The costs quoted here for nuclear generation do not reflect the cost of storage of radioactive waste nor decommissioning costs, both of which add to the lifetime cost of the plant.
There's no guarantee that the cost solar systems will continue to fall at 14% or battery technology at 7%, but that's held true for a while now and shows no sign of abating.
We've assumed the solar + battery system will be used to generate steady "baseload" power, much the way a nuclear plant does. But in fact it can do a trick that nuclear systems cannot: it can ramp up and down its power output quickly. Ultimately, this will reduce or eliminate the grid operators' dependency on expensive peaker plants. So solar + battery can provide a better value to grid operators.
In Closing: Send Comments!
I don't profess to be an expert in advanced nuclear energy generation, yet. But I aspire to become more educated. I'm sure there are holes in my knowledge and that I've not found the best source of hard data. You can help me -- and other readers -- with cogent comments to add to our collective knowledge.
Also, in the not-too-distant futures, we're planning on hosting a Cool Energy World colloquium specifically on the topic of Advance Nuclear Energy. If you know a technologists, entrepreneurs, investors, policy makers or incumbents that you'd like to see on the panel for this conversation, please drop me a line at info@coolenergyworld.com