CERAWeek 2014 - The Future of Global Nuclear Power

Even after Fukushima, many countries continue to build new nuclear power plants. Others are planning to expand their nuclear fleets or are building nuclear plants for the first time. The world now has 75 gigawatts of nuclear capacity under construction, and 186 gigawatts on order or planned-the highest in more than two decades. This session examines the most promising regions for new nuclear construction, explore advanced nuclear technologies, and identify issues and challenges ahead.

1) Eight advanced nuclear reactors with passive safety features are under construction in China and the US and will begin to come online within the next few years. What lessons have been learned, and what are the implications for the global nuclear business? 2) Many small modular reactors (SMRs) are competing to come to market. What are the features of SMRs? Can SMRs compete with large reactors? Where are the best opportunities? 3) The experience of Fukushima puts a new emphasis on nuclear safety. What safety-enhancing advancements are occurring in technology and regulation? 4) The economics of power generation varies widely across continents and countries. While the shale gas revolution makes nuclear less competitive in North America, nuclear remains an economically attractive option elsewhere. Where are the promising places for nuclear, taking into account economics, security, market structure, and policy?

Jone-Lin Wang, Vice President, IHS Energy, chaired the Thursday morning Strategic Dialogue on "The Future of Global Nuclear Power" which examined the global opportunities and technological developments within the nuclear industry, including reactor design and the strategies for working with developing economies to enable projects to go ahead. Joining her were Sandy Rupprecht, Senior Vice President, Westinghouse; Christopher Colbert, Chief Operating Officer, NuScale Power; John Gilleland, Chief Executive Officer, TerraPower; and Mujid Kazimi, Professor of Nuclear Engineering and Mechanical Engineering and Director at the Center for Advanced Nuclear Energy Systems at the Massachusetts Institute of Technology.

Mr. Rupprecht discussed the design features of the AP1000 reactor, highlighting its passive safety features, approved since the Fukushima disaster. His key recommendations for the industry were to have project design complete before construction starts, to invest in improving the supply chain, and to work toward a stable regulatory regime. He estimated that the basic capital cost for a new nuclear project using the AP1000 reactor is approximately $4,000 per kilowatt, stressing that Westinghouse is working to get below this level in 36 months.

Mr. Colbert elaborated on the details and potential for small-scale nuclear reactors. Each unit has a 45 MW capacity and is physically about one-twentieth the size of a typical modern reactor. He described the benefits of this smaller scale for buyers that might not need very large generation units and also stressed the flexibility of being able to increase capacity in stages by linking up to 12 units. He mentioned that these units do not face some of the more rigid safety requirements that are imposed on larger reactors, but said that these small units have added safety benefits of their own as they can be shut down passively if the need arises. He concluded by estimating that such units are competitive with gas-fired generation at a gas price of around $5.50 per MMBtu.

An alternative technological approach was outlined by Mr. Gilleland. He first noted the benefit of having former Microsoft Chairman Bill Gates (an IHS CERAWeek 2013 featured speaker) as an active investor and chairman of his company. Mr. Gilleland said that TerraPower is targeting efficiency gains across the whole fuel cycle in order to lower the levelized cost of electricity, minimize waste, and reduce the need for uranium enrichment. He estimated that combining all these factors could bring down costs by up to 20%, significantly reduce the amount of waste produced, and enable depleted uranium (which is unusable by current reactors) to be used as fuel. The next step, he said, is to develop a working prototype.

Professor Kazimi discussed his experience in helping to develop the nuclear industry in Abu Dhabi, which he held up as a model for other countries to follow. He said that the government in Abu Dhabi has signed nuclear cooperation agreements with a variety of countries and has also established a company to own and run the plants once they are operational. There is a new regulatory body, a new educational program, and a process in place to maintain close contact with experts from countries with nuclear experience. The panel highlighted the importance of having strong government support and also developing training and expertise within the local population, perhaps with the support of a strong nuclear technology supplier, which is essential to a nuclear development program.

In a discussion about where future opportunities for nuclear lie, the speakers pointed to the several countries that could add to the 75 GW of nuclear capacity currently under construction. These included United Arab Emirates, Saudi Arabia, Vietnam, Malaysia, and Indonesia, as well as countries with prior nuclear experience such as the United Kingdom, Bulgaria, and Brazil. India and China were considered the strongest growth markets, with China expected to eventually have a bigger portfolio of nuclear plants than the United States.

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.