Nuclear Power 2.0: Is a Renaissance on the Horizon?
Episode ID S3E01
January 25, 2023
An evolving energy landscape and significant federal incentives are not only changing the economics of nuclear power, it’s radically changing how utilities look at investments to meet decarbonization targets. In this episode, Dairyland Power executives talk about their decision to add advanced nuclear technology to their energy portfolio. They are joined by experts from TerraPower and the Nuclear Energy Institute to explore the potential of smaller, modular reactors to deliver reliable, cost-effective energy.
John Kotek: It was a real game changer to see nuclear treated on par with other low-carbon energy resources in the Inflation Reduction Act. That immediately and significantly changes the economics of new nuclear power. While our projects take a little longer to get off the drawing board and in an operation, I think it's really changed the conversation inside utility boardrooms, among other people who are considering how to invest in clean energy technology to meet our decarbonization goals.
Teri Viswanath: That’s John Kotek, the senior vice president for policy development and public affairs, at Nuclear Energy Institute. And I’m Teri Viswanath, the energy economist at CoBank and your co-host of Power Plays. I’m joined by my colleague, Tamra Reynolds, a managing director here at CoBank and my co-host. Tamra, welcome to the new year and our third year for Power Plays.
Tamra Reynolds: Hey, Teri. We wanted to kick off 2023 by taking a closer look at timely issues that are important to our rural electric cooperatives, namely keeping long-term costs down for their members while continuing to provide reliable electric service. John represents the trade association, NEI, that’s really the voice of the nuclear energy technologies industry in the U.S. — with more than 330 members from 17 countries represented. He commented that he’s witnessing the most utility interest in building new nuclear that he has seen in his career, and that there are specific drivers for this interest.
John Kotek: I think you've got five factors at play here. First, of course, is the increased interest in climate, and the desire to move to a lower carbon energy system. Nuclear energy as the source of half of our carbon-free generation, about 20% of our total electric generation here in the U.S., is really key to holding carbon emissions down now and into the future. Second is concerns about electric grid resilience.
As we've seen with tragedies in Texas, California, and other places in the U.S., over the last several years, having a source of energy that is fuel secure, it's not depending on just in time deliveries of fuel, it's not depending on weather conditions to operate, is a really valuable part of a grid, particularly when that grid is under stress. Third is the concerns about energy security, spurred in large part by the Russian invasion of Ukraine, and the realization that who you do business with, in the energy space, really matters.
The fourth thing, I'd say, is jobs. We've heard the president and elected officials on both sides of the aisle say as we engage in this transition to a lower carbon energy economy, they want to see that result in well-paying, long-lasting jobs. Nuclear energy does that better than any other source of energy supply.
A nuclear plant, once it's up and running, will operate for at least 60, maybe 80 years, even longer. I know people who are now third generation working at the nuclear power plant in their community, those jobs pay better than anything else in the electric sector. Community, states, local officials, labor unions, others, are really interested in seeing us keep the nuclear we've got and build more so we can deliver on that jobs opportunity. Then, finally, is price stability.
Teri Viswanath: Let me see if I’ve got the five drivers down…the need for a carbon-free resource, reliability concerns, energy, and job security, and lastly…well, price stability. Tamra, we had an opportunity to sit down with the senior leadership from Dairyland Power, the organization’s president and CEO, Brent Ridge along with John Carr, vice president of strategic growth, and formerly Dairyland’s head of power generation. Let’s listen to what they have to say about why their organization is considering new nuclear development.
Brent Ridge: Part of today's conversation, we'll talk about that transition from a portfolio that for decades has relied solely on fossil fuels to a methodical journey over the next several decades to be much less carbon-intensive, more reliance on renewables, but maintaining the focus on three things. We need to be safe, we need to be reliable, and we need to be cost-effective for our members.
John Carr: Brent mentions reliability and reliability challenges. Here we are preparing for a stretch of weather where we're going to see wind chills in the Upper Midwest approaching 40 below zero over the next week. Certainly, as Brent notes, reliability in these types of weather extremes in this part of the world is very critical to us and our members.
Brent Ridge: As we sit here today on December 19th at around noon central time, here's what the MISO footprint looks like. This is from Canada to Louisiana. There's currently 85,800 megawatts of load in the system. Right now, 78% of that is coming from fossil fuel; 6.39% is coming from wind. As we talk about the transition from fossil-fuel based to non-carbon emitting, going from 77% to net zero or zero is a daunting task and not one that can be done overnight.
Tamra Reynolds: Let's talk a little bit about Dairyland's power supply strategy. What does that look like for you as you look forward.
John Carr: I think to set the stage there, it's important to maybe look at where we've come from. If we go back to 2005, Dairyland at that time met our members’ demand with 95% coal. To date, we've actually closed about 500 megawatts of coal at two different locations. We've replaced that with natural gas, wind, and solar.
As we sit here today, we are in that 20% to 25% renewable energy mix. We're still about 50% coal and then the balance natural gas. Our journey to diversify the portfolio takes us to roughly one third each of coal, natural gas, and renewable energy between now and 2030. In doing that, we will have reduced our CO2 footprint by roughly 50%.
How do we get to that next tranche to zero or net zero? That's where we think about looking at advanced nuclear technology, small modular reactors. That last tranche to get that reduction, especially in this part of the world in the Upper Midwest, coal has long been the resource of choice to get us through the winter. Here's why, that during these very cold stretches in the Upper Midwest the natural gas system is almost fully subscribed meeting home heating demand. Coal has historically provided the fuel security because the ability to store fuel on site. It often carries the day through these extended cold snaps that we see here in the Upper Midwest
Tamra Reynolds: Earlier this year, you guys signed a memo of understanding with NuScale Power back in March, I believe, to look at small modular reactors. How are you guys evaluating this as part of a potential asset for you guys to rely on?
Brent Ridge: I'll build on what John said because when you think about what nuclear brings to the table, it helps us move through that last 25% of carbon reduction. John mentioned a couple of things. First, you have a pile of coal at a coal plant that provides you supply security, and you'll have anywhere between 20 days and 60 days of fuel, which is really reassuring in a winter period. What a nuclear power plant does, and I was fortunate to spend almost two decades at a nuclear utility, depending on your refueling cycle, whether it's 18 months or 24 months, you have 24 months of fuel in the reactor vessel that is there unimpacted by supply chain, by weather.
It's not without its cons. As an industry, we have to show that we can build the next generation of nuclear power plants as estimated and operate them as estimated at cost, and continue to operate them as safely as we have the current fleet. The cost-effectiveness of the construction and operation, I think is the key risk.
John Carr: One other component here to think of, recently, the North American Electric Reliability Corporation, NERC, has flagged concerns around the Upper Midwest and concerns with the retirement of these baseload coal plants. MISO has incurred a shortfall against their planning reserve margin. As a result of that increasing risk of blackouts in this region during peak demand, extreme weather, but there's been several large investor-owned utilities that are neighbors to us that had announced plans to retire coal facilities that have now delayed those retirements. The change, I think, is this capacity shortfall and the recognition that we're going to need something other than just wind or solar to replace these coal plants.
Teri Viswanath: So Brent talked about his concerns about the possibility of escalating development costs. So, if more components of the plant, or even the entire plant, could be built offsite, under controlled factory conditions, these unanticipated costs might be reduced.
We discussed this issue with John Kotek from NEI and here is what he had to say…
John Kotek: This next generation of nuclear technology will be more like building airplanes, and less like building airports. Traditionally, nuclear power plants have been extremely large, custom stick-built facilities, that take many years to construct.
What this next generation of technology is going to do is, it's going to take a lot of the more complicated evolutions in the manufacturing and construction, and take that back to a factory setting. You're going to have more components and more systems delivered to the construction site intact, where they'll just need to be installed. It'll be a much simpler evolution on-site. You're also seeing a move to technologies that are simpler and rely more on off-the-shelf components.
Traditionally, for a nuclear power plant, you've had to go through a very rigorous qualification process to enable a particular component to be used in a nuclear application. Well, that makes sense for some things, because they've got real safety implications, but it doesn't make sense for other things that really don't have a safety implication for the operation of the plant. These next-generation designs will have a real focus on ensuring that the maximum number of components can be purchased off-the-shelf.
Things that are already in widespread use, for example, in gas turbines or in other parts of the energy sector, to really simplify the supply chain and simplify the construction process.
Tamra Reynolds: We also wanted to have a developer weigh in on the issue. Teri, you had an opportunity to hear Tara Neider, the senior vice president of fuels and project development at TerraPower, speak at the Colorado Rural Electric Association’s Energy Innovation Summit last fall, right?
Teri Viswanath: I did indeed. Tara is seasoned engineer in this field and here is what she had to say about that company’s Natrium project.
Tara Neider: Costs are always a challenge and we're focusing on cost every minute. The basic difference we have with Natrium is, it's a simpler design. We really are trying to control costs by keeping things simple, and not having extra systems to build to make things more complicated. We're always looking for the simple solution.
We're also doing some construction things differently, that we are using more sophisticated methods of construction like modularization for instance, and that kind of thing.
We also are taking everything from design all the way to operation and having that all of the design data flow completely through the construction process so that the operator will now have something that they completely have all the data for their plant. Which is important in terms of configuration management. It's really important in terms of preventing problems that might be interferences between systems. It's all in one system, so you're going to minimize those kind of impacts from one system to another.
Teri Viswanath: There's some expertise at Dairyland, which is really helpful with regard to evaluating these new projects. How do we level-set these new nuclear projects?
Brent Ridge: The modules for at least in NuScale's case are manufactured off-site that's envisioned to be in a factory with a supply chain on an assembly line, so then you take away a lot of the field risks of putting together a facility.
It appears that the construction costs are going to be more predictable. Now, having said all that, we have to prove that as an industry with the first serial number of all the technologies that are out there and show that it is in fact, a more economic, and really more importantly, predictable.
John Carr: Brent talked about the Idaho facility and the Utah Association of Municipal Power Systems, UAMPS, will be the first operating plant that NuScale builds and installs. We will be watching that very closely, again, in our partnership with NuScale.
Tamra Reynolds: In addition to cost concerns, there are also more generalized safety concerns that our guests addressed. You will first hear from John Kotek from NEI and then Tara Neider from TerraPower, who has spent the better part of her career in this space.
John Kotek: When you talk about nuclear safety and you talk about preventing any harm to the public, or to the environment outside the plant site, really, what you're talking about is keeping the nuclear fuel intact.
What you're doing in a nuclear power plant is, you're capturing the energy that's released when you split uranium atoms. You're using that energy to boil water or to heat another coolant that ultimately maybe drives a turbine, for example, and creates electricity. In the process of splitting that uranium, you're also creating something called fission products. Those are just the pieces that are left over when the uranium splits. Those can be very highly radioactive.
That's why spent nuclear fuel needs to be safely stored and ultimately disposed. There are different ways you can go about ensuring that you're keeping your nuclear fuel safe. You keep the fuel intact, you keep the radioactive stuff that you're concerned about inside the plant, so it's not a public or environmental safety risk. The water-cooled, small modular reactors, for example, they're taking an approach where you just surround that fuel with a whole lot of cooling.
Another approach is, you just make that fuel even more robust. The fuel we've got today is quite sturdy, but there are other designs out there.
Tara Neider: From a nuclear safety perspective, we look at three things. It's cooling, controlling the reactor, and containment. From a cooling perspective, after you shut down the reactor, there's still a lot of heat that is generated from the previous reactions. The Natrium actually uses natural conduction and convection and gets rid of that decay heat.
It's simply air running from outside of the reactor, running up through some big chimneys to get rid of that decay heat. That's really important because you don't need anything special to make it safe. We also have used sodium instead of water. Using sodium, what happens is it's a really great conduction mechanism, and that's what allows us to have that natural decay heat loss.
We have this very large temperature range that we can work in, and an extra bonus is that you don't need any pressure to keep it from boiling. The reactor runs at near atmospheric pressure, just normal pressures.
That actually is another factor on the containment in that there's no pressure to try to cause leakage in the containment or anything like that because it's really there is no temperature differential between the inside and the outside. From a control standpoint, our control rods drop in through gravity, which is similar to the light-water reactors that were built in the '70s, but it is also natural, so you don't need any electricity or any operator activity in order to control the reaction.
We have also some inherent control in that as the temperature goes up, if it's going up beyond where you're supposed to operate, the fuel rods expand away from one another and that reduces the reactivity. It actually is a self-controlling type control mechanism separate from the control rods. That won't shut the plant down, but it will keep it from rising up to high temperatures. Then containment, sodium has a natural affinity for radioactive materials. It actually holds on to the isotopes, so if there was some leak or something, it doesn't really want to take away from that.
Teri Viswanath: John and Tara both addressed safety, but a related question is how do we deal with the waste? Here’s what John had to say.
John Kotek: We talked a little about the fuel and the reason why you need to deal with spent fuel. You've got the radioactive leftovers, the fission products there, in the spent fuel, you've got other radioactive elements in the fuel as well, that can be radioactive for a long time.
You want to make sure that you keep this material isolated from people in the environment, over the necessary periods. The good news is, we've been doing this for 60 years. We know how to do this. Today, what happens is, the spent fuel, after being in a reactor for five or six years, it comes out, it goes into a pool where it's filled with water, where it's cooled for several years. When it's sufficiently cooled, it can then be moved into something called a dry storage cask.
It's a steel container with a concrete overpack, that is literally taken out of the reactor, put onto a concrete pad adjacent to the reactor, and there it sits. It's air-cooled. You don't need any active cooling. That's been shown to be safe for at least 100 years. Yes, there needs to be a solution, ultimately, to deal with spent nuclear fuel. Other nations have figured this out. The right answer is what we call a deep geologic repository.
That's a big hole in the ground, that's been built into a very stable geologic formation where the fuel can be safely stored for millennia. Finland has already built, or they're in the process of finishing construction of their repository. They'll start in placing fuel around the middle of this decade. Sweden has picked a site. The Canadians are down to two sites. France, Japan, other nations are making a lot more progress than we have in the U.S.
Tamra Reynolds: We named this podcast Nuclear Power 2.0…so let’s understand what makes this truly next generation nuclear. Electric power generation from commercial nuclear power plants in the US began in 1958. What will it look like beyond 2030? We will first hear about the NuScale project that Dairyland is involved in and then pivot to TerraPower’s project.
Brent Ridge: The current fleet are large reactors that are safe, reliable, run at very high capacity factors, but they're generally on a single shaft. If you have a more than 1,000-megawatt nuclear power plant, it's on a single shaft. If you have a turbine regenerator issue, and you have single shaft failure, you basically lose 1,000 plus megawatts instantaneously.
From NuScale’s perspective, and we look at their technology, they will have 12 smaller reactors. A plant that we will build will have 12 small modular reactors with 12 separate shafts. We immediately, we limit the risk on single shaft failure to a couple of shafts which represents less than 10% of the total output of the plant. Then, instead of having a single long outage where you refuel the reactor, you will do these 12 reactor refueling in 12 separate events, and so you're never offline.
Tara Neider: Generally, they all differ by the type of medium that they're using for the coolant for the reactor. The light-water reactors as mentioned, the coolant is water. We're using sodium. We're also developing a molten chloride reactor, it's actually a liquid fuel or molten salt fuel I should say. Then there's others that are based on gases and such. They all have their pluses and minuses and we chose the sodium reactor because it was the most technically mature, I would say.
Teri Viswanath: Tamra, there was a really important element to our discussion and that was to figure out how a complementary mix of technologies that would get us to net zero over the long-run. John’s comment dovetail with Tara’s discussion on flexible technology design, here’s what he said.
John Kotek: We do have nuclear developers who are looking at ways to make nuclear a bit more flexible. For example, the TerraPower project, the one in Wyoming I mentioned, where there's a liquid metal reactor being developed. This is being developed by a company called TerraPower, which is a Bill Gates-founded company, working with PacifiCorp, Rocky Mountain Power.
They are incorporating into their design a molten salt heat storage capability, that will allow the plant to vary its output, from less than 50 megawatts electric, all the way up to 500 megawatts electric, depending on what the conditions on the grid are at that time, what demand looks like.
There are others who are looking at building more ramping capability, or load-following capability, that's not anything new for nuclear. We used to do it in the U.S. France does it all the time, actually, because France is about 70% nuclear. They need to be able to turn the nuclear plants up and down depending on demand. They do it regularly. We can do it here in the U.S. as well.
Then we've got a lot of companies looking at building in the capability to, for example, produce large quantities of hydrogen when there isn't demand on the grid for the electricity. Divert that output into something that can be stored and later delivered.
Tamra Reynolds: When we asked “why nuclear and why now?,” there was a chorus of a response from our guests on community impact and benefits. Tara Neider is most hopeful on what this technology could mean from an employment standpoint. She doesn’t lose sight that TerraPower’s mission is to solve the world's toughest problems in energy, climate, and human health through innovative nuclear technology.
Tara Neider: A number of states have decided that they're going to shut down their coal plants. We're not saying, "Hey, shut down the coal plants and stick a nuclear plant there," but if somebody has decided that the coal plants are going to shut down, what we've seen in Kemmerer, it can be devastating. It's a small town. There are people that rely on the coal plant for their livelihood. There's not much else around to just switch industries. This gives us an opportunity to utilize people that have been good workers all their lives and revitalize or allow the community to actually survive and actually bring good paying jobs into the area.
One thing that people don't realize is that as part of this program, we have to bring up all the training for our operators and all the people in the plant. For the operators themselves, you have to train for two years before you can become an operator. Well, that's part of our program. There may be people that I don't think they can be immediately supervisors or managers, but if they go through the programs, there's a lot of opportunities for people who there are a lot of differences between a nuclear plant, a coal plant, but there are also some pretty significant similarities, and the basic understanding is there, with the exception of the nuclear reactor itself.
We've actually looked at getting more internships in the University of Wyoming so that Wyoming can build the infrastructure there. We're also talking to two of the community colleges in the area so that maybe we can help them understand what it's going to require to get a curriculum so that they can start building people into the pipeline.
Teri Viswanath: John builds on what Tara had to say…
John Kotek: I encourage your listeners to check out an analysis that we commissioned with the consultancy, Scott Madden, they called it Gone with the Steam. It was looking at the potential for coal plant closures and how some of those facilities might be replaced with nuclear plants.
The Scott Madden report found that a typical new-scale, small modular reactor would employ north of 230 people on site, compared with, for a similarly sized coal plant, under 110. when you look at the plants themselves, and the communities that host those plants, there's an opportunity to bring in a greater number of long-term, well-paying jobs to take advantage of not just the infrastructure at the site of a coal plant that's been slated for closure, but also to take advantage of the very well-trained workforce that has been operating that coal plant.
Tamra Reynolds: So, when exactly will we see the commissioning of our nuclear 2.0 fleet?
John Kotek: You asked about when plants will come online. There are multiple projects underway now. The U.S. Department of Energy has three cost-shared, public-private partnership projects underway right now. One to demonstrate a first-of-a-kind, water-cooled small modular reactor in the state of Idaho.
One to demonstrate a gas cold reactor in the state of Washington, then a third to demonstrate a liquid metal cold reactor in the state of Wyoming. All three of those will be coming online here within the next decade. They're in the process of doing site work now, applying to our regulator, the Nuclear Regulatory Commission, for approval to begin construction. Those projects are well underway and we should see those, and other projects, come into operation within the decade
Teri Viswanath: And why is the timing of development now, so important? I think our Dairyland Power CEO, Brent Ridge summarizes this best…
Brent Ridge: The "all the above" approach gives us not only a smooth transition, an achievable transition to a less carbon future, but it also gives us the ability to continue to support the economy in a way that doesn't impact the economic engine that electricity is.
When we think about the "all the above" approach and just look at our portfolio, it's renewables, it's storage, it's gas, it's coal, and now it's going to be moving to nuclear. There's a decades-long transition that's required to make sure that we don't break the economy. Particularly, when we think about rural electric co-ops and small municipals, they are at the greatest risk for impact.
Tamra Reynolds: I hope that all of you have enjoyed our first podcast of the year and we look forward to having you join us next month when we talk with Florida co-ops that helped electrify a village in Guatemala.
Teri Viswanath: NRECA International has been working in Guatemala for more than 27 years, providing ongoing support to develop a sustainable, reliable, and affordable supply of electricity to many rural communities. Two of our CoBankers, our own Tamra Reynolds and Doran Dennis, joined that effort in December. I’m looking forward to hearing those stories and I think you will as well. Join us then!
Disclaimer: The information provided in this podcast is not intended to be investment, tax, or legal advice and should not be relied upon by listeners for such purposes. The information contained in this podcast has been compiled from what CoBank regards as reliable sources. However, CoBank does not make any representation or warranty regarding the content, and disclaims any responsibility for the information, materials, third-party opinions, and data included in this podcast. In no event will CoBank be liable for any decision made or actions taken by any person or persons relying on the information contained in this podcast.