The nuclear renaissance
Innovation for energy security
Energy security has gone up the merit order unquestionably, and that's why France is going through a rebuild, Czechia is doing a rebuild, Sweden, UK, and a range of others, as well as new market countries like Greece, Italy – countries that wouldn't have talked about nuclear five years ago. So, I think we're in a much stronger position today, and I suppose it's on us to outperform the metric even further with these really high expectations.
I think we're seeing a lot of focus on SMRs, rightly, because we're trying to address some of the challenges that the nuclear sector has had. We can be upfront about that. The industry has a poor track record for being on time and on budget. We've got to stop over-promising and under-delivering, and SMRs are a key component of ensuring we can do that.
From our perspective, the SMRs were a bit of a Trojan horse for introducing nuclear back to the conversation, because now you're looking at something that's smaller, perhaps more controlled construction environment in a factory, and more controlled cost. That, first steps have to be around scaling down current technology, we're not looking at new exotic, the generation four; there's I think 180 I've heard, plus SMR and ASMR type reactors out there in design phases. Well, those aren't all going to be winners, as we all know, that's going to be in the, you know, three to five range of winners. In the meantime, yes, the role for the large traditional has come back to the conversation, because you start to look at even things like where it started around data centers and. Looking at, you know, three, four, or 500 megawatt data centers, and today we're up to gigawatt data centers.
The future of fusion
Fusion has lived in an era of experimentation for a long, long time, 70 years or so, and huge experiments defined by government labs doing a lot of research. One of the things that's changed in the era we're now in is commercial companies and public private partnerships taking that into prototypes to demonstrate energy gain and to demonstrate that you can have a power station from this technology. And we're going to see that between now and I think the mid 2030s. We're going to see energy gain happening in that period, and that will light up the market, because the market will see, well, this could actually happen. Could be 15 years away.
The promise of getting there is absolutely enormous. You know, it is a humanity-changing energy source, dispatchable base load power, without a lot of the downsides that come from everything else, right. So, we've got to go for it, and we've got to put the capital into it, but there's still a lot of hard work to do.
Building skills and capacity
The sort of Henry Ford Motor principle of you can have it in any color as long as it's black. That's what we need to be delivering is a single design repeatedly, and that will give confidence to the supply chain. So, the biggest risk that we see in the supply chain is not capability, because the capability is there for the most part. Where we see more of a risk is capacity, keeping up, keeping up with the demands as a much greater number of countries look to maximize nuclear. But as soon as those supply chain companies see the contractual commitments, the market commitments, the certainty…that gives them the ability to invest in that capacity and in building greater capability.
Fusion has got, has got to really develop skills because they're quite scarce. If you, coming back to what China is doing, yes, it's investing a lot, it's building various machines, but it's also really focused on its PhD pipeline and is pushing through, you know, thousands of PhDs in fusion science. So, we do need to be focused on it, but when it comes to developing plants, building prototypes, it's not all fusion physicists that you need, you need the skills in construction and engineering, and that's what we really need to grow, particularly in the UK.
I mean, nuclear projects tend to attract labor from other industries, and what we've seen on the North American side is the data center industry is doing a great job of training up electricians that we need.
Costs and financing
There's only one track record in nuclear, which is cost overruns, delays. I do feel that question will still be paramount for at least the first of a kind or the first cohort of the fleets that come again with replication and with that fleet approach. I think investors and lenders will probably get more comfortable over time, but I'm afraid the problem will still remain for the first SMRs and AMRs in that context. In that context, thinking about how we share the risk of those cost overrun and what framework we put in place to sort of allocate that risk and share that risk will be important, whether it's consumers, taxpayers, capital providers, developers.
The approach has to be to standardize sequence and simplify the build, standardizing that you're choosing one model, building it over and over and over, and then sequence. You're not going to build 20 reactors and take that approach of doing them all at once. That's what's going to take us down the path we need to be on for large steel build out of new nuclear.