U.S. Nuclear Energy: Transform Or Become Irrelevant

By Ramanan Krishnamoorti, Chief Energy Officer, Interim Vice Chancellor for Research & Technology Transfer, Interim Vice President for Research & Technology Transfer and S. Radhakrishnan, Managing Director, UH Energy

The recent financial crisis facing Toshiba due to construction cost overruns at the newest nuclear power plants in the U.S. brought home the message: the nuclear power industry in the U. S. must change or become increasingly irrelevant.

This latest financial crisis strikes an industry that already has undergone a radical slowdown since the Fukushima disaster in 2011, which followed stricter regulations and safety concerns among the public after the Chernobyl disaster in 1985 and the partial meltdown at Three Mile Island in 1979.  The increased cost of building traditional high pressure light water reactors comes at a time when natural gas prices have plummeted and grid-scale solar and wind are becoming price competitive. So with all the financial and environmental concerns – including the very real issue of where and how we should store spent nuclear rods – why should the world even want nuclear power?

Several reasons.

First, nuclear power represents nearly 20% of the electricity generated in the U.S. Only coal and natural gas account for a higher percentage. More important than the total percentage, nuclear has the ability to provide highly reliable base load power, a critical factor as we go towards more intermittent sources, including wind and solar.  The power generated using nuclear power has the highest capacity utilization factor that is, among all fuel sources, it has the highest ratio of power actually produced compared to potential power generation, highlighted by the fact that it represents only 9% of the installed capacity in the U.S.

Clearly, nuclear, combined with natural gas, could be a great mechanism for replacing coal as base-load power. Moreover, natural gas power plants can be rapidly mobilized and de-mobilized and effectively offset the inherent intermittency of solar and wind in the absence of effective grid-scale storage.

Which points to the second reason: energy sources not based on hydrocarbons have become the de facto option to decrease anthropogenic carbon dioxide. Thus, along with solar and wind, nuclear represents a significant technological solution to address the human-caused CO2 issue.

A strong case for nuclear was recently presented at a symposium hosted by UH Energy, especially if we are looking for a rapidly scalable solution. Nuclear power technology continues to evolve away from the concrete-intensive light water high pressure process and toward a modular and molten salt-based process, especially outside the U.S. With the broad availability of nuclear fuel, especially in a world where thorium and other trans-uranium elements are increasingly becoming the fuel of choice, this technology is scalable and ready for global consumption. If done right, the use of thorium and some of the trans-uranium elements might quite substantially scale-down the issue of spent fuel disposal.

But other, less tangible barriers remain. Perhaps the single largest barrier for nuclear energy, after the economics associated with traditional nuclear power plants, is one of social acceptance. The near-misses such as Three Mile Island and the catastrophic incidents at Chernobyl and Fukushima highlight the challenge of gaining broad societal acceptance of nuclear energy.  Compounding these challenges is the much publicized possibility of a “dirty-bomb” based on nuclear material from rogue nations.

Reducing the amount of fissile material in a power plant and reducing and even eliminating the risk are crucial to gain the public’s confidence. One significant advancement that might help minimize the challenges with public confidence is that of fuel reprocessing and, with that, the virtual elimination of nuclear fuel waste. While these technologies are in their infancy, rapid advancement and scale-up might result in a significant shift in public perception of nuclear power.

Despite the barriers, several symposium speakers argued that the increased use of nuclear energy is not only possible but the best bridge to a low-carbon future. They did not deny the concerns, especially the staggering upfront cost of building a new nuclear power plant. Jessica Lovering, director of energy at The Breakthrough Institute, acknowledged the upfront cost has quadrupled since the 1970s and ’80s in the U.S., largely stemming from increased safety engineering in response to tougher regulations and the custom development of each nuclear facility. In contrast, Lovering has reported that the cost in France, through standardization of equipment and centralization of generation capacity, for new generation capacity has risen far more slowly. And therein lies a potential path forward for how the nuclear industry may adapt.

Perhaps the biggest disruption to the current nuclear paradigm are two large changes that are just getting started: First is the global reach of South Korea and its desire to become the leading global supplier of nuclear energy production. Based on imported technologies from Canada, France and the U.S., and using the key lessons from the success of the French nuclear industry due to standardization and centralization, Korea has taken on building modular nuclear power plants, assembled at a single site. And the site that they are working from is the United Arab Emirates! Using these advances, they have been able to keep capital costs for new generation capacity to under $2,400 per kilowatt hour. That compares to $5,339 per kilowatt hour in 2010 in the United States, according to the Nuclear Energy Agency.  Interestingly, China is looking to emulate the Korean model and with as many as 30 new nuclear reactors for power generation planned over the next two decades in China alone, the global competition is heating up.

Second is the advancement of small modular nuclear reactor (SMR) technologies, which have now achieved prototype testing. The opportunity and challenge associated with SMRs is captured in a recent DOE report. These reactors are designed with smaller nuclear cores and are inherently more flexible, employ passive safety features, have fewer parts and components, thus fewer dynamic points of failure, and can be easily scaled-out through their modular design.

Done at scale, these would result in reactors being constructed more quickly and at much lower capital costs than the traditional reactors. Aside from technical advances that would enable this technology to be produced at scale, issues of public policy, public perception, regulatory predictability and (micro) grid integration need to be resolved.

The U.S. nuclear power industry needs to embrace the Korean model and SMR technologies in order to transform and provide the base load capacity.  The traditional model has failed us in too many ways.

Dr. Ramanan Krishnamoorti is the interim vice chancellor and vice president for research and technology transfer and the chief energy officer at the University of Houston. During his tenure at the university, he has served as chair of the Cullen College of Engineering’s chemical and biomolecular engineering department, associate dean of research for engineering, professor of chemical and biomolecular engineering with affiliated appointments as professor of petroleum engineering and professor of chemistry.

Dr. Suryanarayanan Radhakrishnan is a Clinical Assistant Professor in the Decision and Information Sciences and the Managing Director of Energy. He previously worked with Shell Oil Company where he held various positions in Planning, Strategy, Marketing and Business Management. Since retiring from Shell in 2010, Dr. Radhakrishnan has been teaching courses at the Bauer College of Business in Supply Chain Management, Project Management, Business Process Management and Innovation Management and Statistics.