A New Dawn for Nuclear Energy

Overview

§?The World today has 413 GW of nuclear capacity installed across 32 countries. 60% of this capacity is more than 30 years old and is nearing end of life, which means that the nuclear fleet can shrink by one third by 2030. Life extension initiatives are being planned for many units which has the potential to avoid investments into another 200 GW new capacity requirement. The present installed capacity helps the world to avoid 1.5 GT of global emissions and 180 bcm of global gas demand annually.

The Nuclear Demand

§?In the energy transition era, the role of nuclear has also been changing as the rising penetration of renewables brings in more intermittency, with grid balancing and frequency regulations posing bigger challenges to the grid.

§?Under Net Zero scenario, IEA predicts that the world will require 812 GW of installed nuclear capacity. Which is almost twice the present capacity. Lesser nuclear would make net zero ambitions harder and more expensive.

§?2022, had been a landmark year for nuclear, with the Russia Ukraine war, many countries like US, Germany, Belgium, Japan planned for extended the life of their existing nuclear fleet. Others like Poland, Czech Republic, Romania, considered a new build of `next gen′ nuclear energy.

§?As per IEA, in a net zero world, by 2050, nuclear electricity generation will double itself from 2022 levels. This will enable saving of about 63 GT of CO2 emissions by 2050 in the optimistic scenario.

§?There is a discussion on the potential coal to nuclear plant swap (US DoE, 2022)

§?Using electricity from nuclear to produce hydrogen and heat presents new opportunities.

The Shift

§?A shift from conventional nuclear plants to more advanced next generation type reactors built in the next decade and after.

§?Regulatory policies have been shifting back to support existing nuclear capacities and investments in new & advanced projects. In US, in form of the Bipartisan Infrastructure Law and the Inflation Reduction Act, in EU, through regulatory initiatives like the EU Green Deal Industrial Plan and in other countries like the UK, China, Japan and Canada

§?Such regulatory advancements can unleash public spending while also have a multiplicative effect that stimulates public funding – a trend currently being observed in both advanced fission and fusion nuclear energy.

The Gen Z Members of the Nuclear Family

§?Research has been ongoing since 1930s on how to make fusion energy commercialized and how to make fission process fit a smaller core. For fission, the reality is nearing with the first pilot getting ready by the start of the next decade.

§?While it is still sometime that the emerging technology in nuclear can be commercialized, the emergence of an active private sector, the energy transition agenda, the technology, and regulatory advancements could bring it about earlier than expected.

§?Russia and China have already commercialized fission AR/ SMR concepts. Others too are expected to commercialize the same at a faster pace. Fusion on the other hand is expected to only commercialize in the next decade.

§?The smaller core of either fission or fusion would allow reactors to be built anywhere and then transported to the desired location.

Technology - Fission

§?Fission reactors is expected to reach commercial scale build-up after 2028. By 2040 a total of 6-7 MWe is expected with Russia, China and Argentina being the leaders.

§?SMRs are in the range of < 300 MWe. Typical present day power ranges from 1000 – 1600 MWe.

§?Advanced SMRs incorporates all the components of the nuclear steam supply system into one unit hence making it safer, it also helps to lower inventory requirements and reduce buildout period.

§?Amongst all the various types of AR/SMRs available, Light Water Reactor (LWR) SMRs has the highest technological readiness with two projects already commissioned in Russia and Argentina, while a third is in construction in China.

§?Global market of SMRs by 2040 is expected to be around USD 300 billion.

§?Present installations: AR based on HTGR has been connected to China grid with a total output of 200 MW, Russian SMR is operating off grid providing heat and electricity to hard-to-reach areas.

§?Companies working on SMR tech includes GE, Hitachi, Hotec and NuScale while companies working on Advanced Reactors include ARC Clean, Kairos, Moltex, Terrapower and Terrestial Energy.

§?Many countries are continuing to invest and provide direct as well as indirect support for domestic development of SMR including US, UK, Canada, France, Russia, South Korea, Japan and China.

§?US and Canada are leading the developments of SMR that are LWRs are either fast, high temp gas cooled (HTGR), molten salt or microreactor designs.

§?China is presently leading global research work on Advanced Reactors (Gen 4).

§?Development of SMRs has been facing challenges in form of regulatory restrictions, lack of public awareness and the fact that a major proportion of the fuel for such reactors is presently being sourced from Russia.

Technology - Fusion

§?While a lot of activities are happening, commercialization of Fusion will take time. The technology is less vulnerable wrt material availability. Deuterium, one of the key components is abundantly available in seawater. Tritium is available in trace quantities and can be achieved also through reaction and fusion generated neutrons with Lithium.

§?One of the main struggles has been the ability to control the plasma inside the reactor. Plasma consists of gas of ions and free electrons, the flow of which can be controlled through electric and magnetic field. It has been extremely challenging to get enough plasma to stay at extreme high temperature long enough to fuse the nuclei. The required temperature needs to be hotter than the temperature inside the Sun.

§?Scientists are optimistic about gaining more control over the plasma through technological innovations like development of super computers, flexibility in 3D printing, evolution of smaller and stronger magnets, etc.

§?Magnetic and Inertial confinement are two designs that dominate the development of fusion energy.

§?The UK based Joint European Torus (JET) lab was able to set a record in 2021 by producing 59 MJ for 5 secs, the longest sustained period of fusion energy.

§?Hybridization of fission with fusion is also being explored.

§?The encouraging development is that a lot of co-operation is being seen in the fusion space amongst countries. ITER (International Thermonuclear Experimental Reactor) is an exemplary project of co-operation amongst scientists from US, UK, China, South Korea, Russia, India, the EU and Japan.

§?ITER`s budget is estimated to be between 25-45 Billion USD and is scheduled to start generating electricity by 2035.

§?Investments in Fusion technology has significantly increased over the last 5 years, with total funding of USD 5 Billion, mainly funded through private companies.

§?Companies in Fusion tech include CTFusion, First Light Fusion, HBII, Helion energy, Hyperjet Fusion, Tokamak energy, Zap energy etc.

§?Fusion has many challenges to overcome but it offers huge potential in providing abundant, low carbon, base load energy along with high grade heat to address hard ot abate sectors. Thus it is surely worth pursuing the mastery of these challenges.

Challenges

§?Cost of advanced nuclear projects as per DoE is around USD 6,200/kW, this with technology knowhow and improvements is expected to drop to around USD 3,600/kW at scale.

§?Nuclear has a problem of history of huge cost overruns. Example: Vogtle Project, Atlanta (initial USD 14 Billion as estimated in 2008, present cost is USD 30 Billion)

§?Another problem with nuclear is that the return-on-investment period is very long.

§?Overall, Key challenges with nuclear includes (1) huge upfront investment, (2) huge cost overrun, (3) long payback period, (4) very complex and (5) highly regulated industry.

Way Forward

§?Advanced fission, including small modular reactors (SMRs) and Advanced Reactors (Ars) as well as fusion are set to shape the future of nuclear, sealing its future role in the energy transition era.

§?There are quite a few challenges/ hurdles where active support of government will be required including: (1) government collaboration to share initial CAPEX through PPP models (2) Govt help in providing cost overrun insurance (3) loans from credit agencies (4) financing through green bonds and (5) loans from multilateral development banks.

India Update

§?India as on date has 6.8 GW of nuclear capacity installed representing 1.6% in terms of installed capacity mix and contributing to 2.8% in terms of generation share. A total of 8.7 GW of capacity is envisaged between 2022 to 2032 with another 4.2 GW of capacity kept as candidate plants. As per CEA′s Optimal Generation Mix Report 2029-30, a total of 15.5 GW of capacity is required by 2029-30 representing 2.1% of the capacity mix and contributing to 3.8% in terms of energy. As per NEP, by 2031-32 the total nuclear capacity expected is 19.7 GW which will contribute to 4.4% of the generation share.

§?The Government of India is exploring the options of collaborating with other countries and taking up indigenous development of SMRs.

§?India is also mulling to allow private Firms to develop nuclear plants with an aim to developing?small modular reactors?to help decarbonize industry.

To Summarize

Overall, there is a necessity for Nuclear to rise up to the occasion, with new technologies gaining attention in the space it seems like the Gen Z of the Nuclear family will help the world in proving itself to be that missing building block which may yield towards accelerating the journey towards decarbonizing the sector.?

• With inputs from World Economic Forum Articles, CITI Group Report, IEA Report, NITI Aayog Report on SMRs, CEA Optimal gen Report and NEP