Nuclear industry stepping up on energy security
Nuclear is back. In the new race for energy security from clean sources, countries are returning to the technology after a long gap, or seeking to build their first nuclear plants.
“The expectations of nuclear are extremely high,” says Alastair Evans, Director of Corporate and Government Affairs at Rolls-Royce SMR, which is developing a small modular reactor design in the UK.
Cory Kos, Vice President, Investor Relations & Communications at Canada-based nuclear energy company Cameco, sees SMRs as a “Trojan horse” for reintroducing nuclear to the global conversation.
With their smaller footprint than conventional plants, SMRs offer a potentially more agile solution through modularization. “You’re now looking at something that’s smaller, perhaps with a more controlled construction environment in a factory, and more controlled cost,” says Kos.
Rolls-Royce SMR is seeking value by using commercial off-the-shelf components wherever possible, for example by procuring from UK oil and gas players which are now reducing their output.
With over 180 reactor designs in development across the world, however, the market will have to settle on a small handful for replication.
“The first steps have to be in scaling down the number of providers of SMR technology,” says Kos. “There are only going to be three to five winners.”
"The first steps have to be in scaling down the number of providers of SMR technology. There are over 180 reactor designs currently in development, but there are only going to be three to five winners."
Cory Kos, Vice president, investor relations & communications
Boost to supply chains and economies
A “design one, build many” approach will bring confidence for those building out the new generation of reactors, says Evans.
“The biggest risk we see in the supply chain is not capability – the capability is there for the most part,” he says. “Where we see more of a risk is capacity: keeping up with the demand as a much greater number of countries look to maximize nuclear.”
Kos notes that in the U.S., the growing datacenter industry has trained up many new electricians. After working on the relatively short-term build-out of a datacenter, electricians are then being attracted to nuclear projects, which provide longer-term employment.
By backing new UK nuclear projects, the National Wealth Fund is looking to drive jobs growth and decarbonisation while delivering a positive financial return. Rajesh Kedia, Director of Investments, has seen how the existing Hinkley reactors have provided work for generations of the same families.
“Not just regionally, but across the entire UK, the number of businesses that they have supported is enormous, for components, services, or project management,” he says.
"The capability is there. Where we see more of a risk is capacity: keeping up with the demand as a much greater number of countries look to maximize nuclear."
Alastair Evans, Director of Corporate and Government Affairs, Rolls-Royce SMR
First SMRs need to convince investors
The lessons from Hinkley project delays have been applied to the UK’s more recent Sizewell C reactor. But financing the new generation of nuclear will still be a challenge.
Like other players, Evans is acutely aware of the reputation that dogged nuclear’s first round: “The industry has a poor track record for being on time and on budget. We’ve got to stop over-promising and under-delivering.”
Kedia says the legacy will loom large at first: “With replication, investors and lenders are likely to get more comfortable over time, but the initial SMR projects will still face first-of-a-kind challenges.
“A key consideration will be how the risks associated with cost overruns and delivery are allocated and managed among consumers, taxpayers, capital providers and developers.”
"With replication, investors and lenders are likely to get more comfortable over time, but the problem will still remain for the first SMRs."
Rajesh Kedia, Director of Investments, National Wealth Fund
Fusion moves from lab to prototype
Meanwhile, the promise of fusion energy is on the cusp of being realized, according to Warrick Matthews, CEO at Tokamak Energy, an innovator in high temperature superconducting (HTS) systems.
Fusion has been the subject of experimentation for 70 years, mainly led by governments. Now commercial and public-private partnerships are fashioning prototypes to demonstrate that it can generate clean,near limitless power.
Matthews predicts fusion will produce energy gain over the next decade. “That will light up the market, as it sees that this could actually happen,” he says. “The tough bit will be the industrialization and rollout phase, which will take us into the 2040s.”
Given the technology’s huge capital needs, Tokamak Energy changed its fusion strategy from a go-it-alone approach to partnering with industry and government to deliver HTS magnet systems. Matthews sees the other main HTS target market as datacenter power distribution , alongside medical, transport, and defense applications.
“Fusion’s promise is absolutely enormous: it is a humanity-changing energy source,” he concludes.
"Fusion’s promise is absolutely enormous: it is a humanity-changing energy source."
Warrick Matthews, CEO, Tokamak Energy
