Evaluating US Nuclear Competitiveness and its Future as a Carbon–Free Clean Energy Source
Interview with Dr. Robert F. Ichord, Jr., Senior Fellow, Global Energy Center, Atlantic Council
Interview by Keith W. Rabin
Hello Bob, How are you? It's been awhile since we last talked. Before we begin can you tell our readers about your background, what led the Atlantic Council to produce the recent US Nuclear Energy Leadership: Innovation and The Strategic Global Challenge report and how you became involved?
Thank you for the opportunity to discuss this important topic. I have spent my entire career working on international energy issues, forty of those with the US government. I started in 1976 with the US Energy Research and Development Administration (ERDA), which became Department of Energy (DOE), and then moved to US Agency for International Development (USAID) where I managed US energy assistance programs in Asia, the Middle East, Eastern Europe and the former Soviet Union. In 2011, I joined the new Energy Resources Bureau at the Department of State, serving as Deputy Assistant Secretary for Energy Transformation. At both USAID and State, I worked on nuclear safety issues in Eastern Europe and the former Soviet Union and was directly involved in the negotiations to close the Chernobyl Nuclear Power Plant in Ukraine and to build a new Safe Containment over the destroyed reactor. I retired from State in early 2016 and joined the Atlantic Council (AC)'s Global Energy Center where I have been authoring a series on power sector transformation in developing countries and its implications for energy security, economic development, and environment and climate change. With growing interest both in Congress and the Administration in the critical issue of the future of nuclear power in the US, I prepared an issue brief in the Spring of 2018 on US Nuclear Energy Leadership and the Challenge from Russia and China. After an initial experts meeting, the Atlantic Council decided to establish a high–level Task Force on US Nuclear Energy Leadership, enlisting Senators Crapo and Whitehouse as Honorary Co–Chairs. We also secured participation of senior executives from industry, former officials of US government agencies, academia, and the environmental community and I was asked to serve as rapporteur and technical coordinator.
Source: US Energy Information Administration
Nuclear accounts for about 20% of US energy supply today. Why does nuclear remain important – both as a fuel source and as a component of our national security? How has the industry, and the US role as a "Nuclear Energy Leader", evolved over time?
Nuclear power is indeed a critical part of maintaining a diversified and stable electricity mix in the US, providing baseload power at a 92% capacity factor. During the polar vortex two winters ago, nuclear output remained constant while renewables and gas declined in the PJM region, which serves 65 million customers and includes 13 eastern and Midwestern states and the District of Columbia. There is also increasing recognition of the national security implications of climate change for the United States. Nuclear power is critical to our mitigation efforts since it is the largest source of carbon–free electricity providing 55% in 2018. From a military perspective, the US nuclear supply chain and laboratory and research complex also provides essential services to the Navy in its nuclear propulsion programs for submarines and aircraft carriers. In its fleet expansion program, the Navy is building a new Columbia class of nuclear power submarines that will be critical to our future defense. The nuclear utility sector, however, is under intense economic pressure due to low gas prices and competitive market structures. These are forcing plants to close prematurely–11 plants are slated to close by 2025. We have 97 plants currently operating and two under construction in Georgia. While still the largest nuclear generating country, the US international position is being overtaken by Russia and China, with their political commitments to expand nuclear power domestically and internationally. Whether we can reestablish our international nuclear energy leadership role is a key issue for US foreign policy. Maintaining our nuclear research and development capacities will be critically important to developing a new generation of nuclear power technologies that can allow the US to compete in international markets and to achieve decarbonization objectives.
Source: Nuclear Regulatory Commission
Much of the controversy surrounding nuclear is due to tragic accidents in Chernobyl, Three Mile Island and Fukushima. How do you view public concern over nuclear, its safety as a fuel source, and how does it compare both with coal, gas and other traditional sources as well as solar, wind and other renewables which are rising in importance around the world?
I have seen first–hand the results of the accident at Chernobyl with the old Soviet RBMK reactors and worked on G–7 efforts to close these and other high–risk reactors throughout Eastern Europe and the former Soviet Union. Although we learned from these accidents and greatly enhanced our safety systems and culture in the US, we need to develop a new generation of reactors with improved, passive safety features that are more resistant to proliferation and diversion of sensitive materials. We should recognize the huge health, economic and environmental costs of coal and fossil fuel combustion. Nuclear needs to be part of our clean energy future and can complement well intermittent solar and wind resources, especially with the new, more flexible nuclear designs.
Source: 1–2–3 HDR
One of the fallout's from these tragedies has been a lack of new plants and innovation in recent decades. Moreover, most of the facilities that have survived are aging and reaching the end of their life cycle. Costs have risen substantially and we have seen the failure of Toshiba's acquisition of Westinghouse, abandonment of the V.C. Summer project in South Carolina and difficulties with two new plants in Georgia. With those dynamics in place how can we maintain present capacity let alone drive the funding and support needed to develop new plants, innovation, research, attracting new talent and to generally realize promising developments such as new small modular reactors and others to advance to a brighter, safer nuclear future?
For existing plants, US state action, as we have seen in Illinois, New York, Connecticut, New Jersey and possibly in Ohio, and reform of regional transmission organization markets to recognize nuclear power's positive characteristics it is necessary to keep existing plants from prematurely closing. Most have 60–year licenses although some are closing due to age factors. A national price for carbon would be desirable and this is getting increased attention in the primary election campaigns. For the future, many efforts are underway to develop advanced nuclear reactors but they are not yet at the demonstration stage. Cost is a key factor as well as social acceptance and solving the spent fuel issue. Since US utilities are not interested in building more large reactors and do not want to take the initial risks on the new systems, government support will be needed for the demonstrations. We are seeing this in the NuScale arrangements with DOE/Idaho National Laboratory and the Utah Association of Municipal Utilities for the first commercial demonstration of their advanced light water reactor modular systems.
Source: Nuclear Regulatory Commission
Despite being included in New Jersey's new energy master plan, nuclear is not generally viewed as a "green fuel" or included in plans for a "Green New Deal". At the same time, however, we are beginning to see recognition emerging of its ability to reliably generate large amounts of stable grid power with zero carbon emissions. This includes statements by the International Energy Agency emphasizing the importance of nuclear in the transition to a cleaner energy future as well as business leaders such as Bill Gates and Jeff Bezos, who have been talking about the promise of nuclear and making investments in new applications. Are we are seeing a trend change and should nuclear be viewed as a green resource? How important is the technology – both short and long term – to addressing the impact of climate change and pollution?
There is indeed a growing concern, e.g. in the report from the Union of Concerned Scientists, over the closure of nuclear capacity in the US and in other industrial countries, i.e. Germany, in terms of climate impacts. In terms of new applications, nuclear has the promise of being a viable alternative to coal and gas but the economic viability, safety and security of the new systems must be demonstrated. Unfortunately the earliest full deployment of these systems is not likely until the early 2030s. Meanwhile other technologies are not standing still, including the rapid drop in the costs of storage technologies.
Source: Nuclear Regulatory Commission NRC Commissioner Kristine L. Svinicki (center) listens to NRC Construction Senior Resident Inspector Justin Fuller (left), during her tour of the Vogtle nuclear reactor construction site near Waynesboro, Ga. In the background is the Vogtle operating nuclear plant on April 1, 2014.
Even many who advocate for nuclear worry about disposal given concerns over radioactivity, storage and handling of toxic waste. How real is this concern and what can be done to alleviate this problem? Some analysts point to the potential of thorium as a less toxic alternative to uranium as a nuclear fuel source. Is this a realistic option?
While some of the new fast–spectrum reactor designs have the potential to use modified spent fuel, the security, safety and proliferation issues, not to mention costs, need careful consideration. The recently released Global Nexus Initiative report on Advancing Nuclear Innovation: Responding to Climate Change and Strengthening Global Security analyzes the security implications of different types of advanced reactors. The build–up of spent fuel is indeed a growing problem and there is more discussion about regional and international solutions to the problem particularly in Japan and South Korea. India has also given considerable attention to thorium–fueled reactors but we did not look at this issue in the AC report.
When talking about nuclear we must also talk about non–proliferation, and the potential of utilizing nuclear power programs as a mechanism to build nuclear weapons. What can be done to better manage global non–proliferation, both within recognized nuclear states as well as Iran, North Korea and others who are either unrecognized or making efforts to gain nuclear arms? What about the potential for nuclear terrorism?
This is a complex issue and the linkage between civilian nuclear power and weapons programs is not clear–cut. The US has worked to ensure in its 123 agreements for nuclear exports tight control over nuclear fuels and technologies, including reprocessing and enrichment. With the expansion of Chinese and Russian nuclear technology exports particularly to developing countries in regions of conflict, there could be cause for concern about potential diversion of nuclear materials for weapons purposes and or terrorist attacks on nuclear power plants. The US has a basic interest in ensuring effective governance and oversight of all nuclear plants.
Source: US Navy The crew of the USS Indiana nuclear submarine salute during the boat's commissioning ceremony.
Many analysts are now focusing on the uranium supply chain – both from a national security perspective as seen in the recent Section 232 investigation which sought to impose a quota to encourage US production – as well as a current price that is lower than production cost. As a result major producers such as Cameco are shutting down large mines, preferring to satisfy commitments through spot market purchases rather than to produce at a loss. Is this sustainable, especially in view of planned new plant growth particularly in China and other markets, and how do current uranium supply/demand dynamics effect the future of nuclear power?
The Task Report deliberations brought out the various sides of this issue. Utilities were concerned about the need to minimize fuel costs and felt security of supply, even if from Kazakhstan, was not really an issue since they maintain adequate reserves and other sources were available if there was a disruption. But in the current context of US concerns over "great power competition", maintaining support for the US and Canadian uranium industry has its advocates. In its consideration of the section 232 (Trade Expansion Act of 1962) complaint by US mining industry, the Secretary of Commerce apparently argued to the White House that the foreign dependence from foreign state–owned enterprises is a threat to national security. But in his Memorandum of July 12, 2019, the President did not find an immediate impairment of national security. He established however an interagency United States Nuclear Fuel Working Group to examine comprehensively the issue and recommend on how to revive and expand domestic nuclear fuel production. The Nuclear Energy Institute applauded the decision.
Japan formerly relied on nuclear energy as a primary energy source though after Fukushima closed down its existing plants at great expense – both financially and in terms of its efforts to reduce carbon emissions. Recently we have seen the opening of several plants, talk of several more and conversation about its importance as a fuel source. Germany also sought to shut down all nuclear reactors by 2022, which has caused more reliance on coal and recently we have seen calls for a delay in this transition. The future is also unclear in Korea and other parts of Europe. What is happening in these countries and more generally in developed economies in respect to nuclear power development?
Currently nuclear power provides about 10% of global electricity generation. The largest producers in 2018 were the United States, France, China, Russia, South Korea, Germany and Canada. Japan has reopened 9 plants and others have been approved for restart if there is political consensus. But natural gas, coal and oil provide 75% of Japan's electricity generation. Although the government wants to increase renewables, which provided 18% of power in 2018, it will be difficult and expensive. Germany's remaining nuclear plants supplied about 11% of the nation's power in 2018. But these plants are located near major industrial areas in the South and delays in development of the high voltage lines to bring offshore wind to these areas may pose problems especially as Germany is also moving to close its hard coal plants. France has delayed it phase–down of nuclear from 75% to 50% of its mix to 2035. The UK nuclear policy is in shambles as the costs and government subsidies for the Hinkley Point C EPR reactor with Chinese funding soar and a decision to go ahead with proposed Chinese Hualong One units is unclear after the withdrawal of Toshiba and the cancellation of two Hitachi plants. South Korea's Moon government amended its nuclear phase out policy to allow completion of nuclear plants under construction, but future directions are in doubt given serious concerns over earthquake and environmental risks. How this might impact South Korea's efforts to compete internationally after its apparently successful venture to build four units in the UAE remains to be seen. South Korean companies have also been actively pursuing development of the proposed nuclear units in Saudi Arabia, with one potential site very close to the UAE nuclear complex.
Source: BP Statistical Review of World Energy 2019
While the US and many other developed countries seem to be deemphasizing nuclear development, Russia and China have advanced their efforts and are estimated to be constructing 60% of new plants worldwide. Can you comment on what is going on in these countries and what this means? How does it effect the US and global development of nuclear power? What other countries are major players in the industry?
Both Russia and China are strongly committed to domestic nuclear development, international nuclear power exports, and the development of small modular reactors (SMR) and advanced nuclear reactors. Russia is building seven third–generation VVER–1200 reactors domestically and over twenty internationally. China is building domestically about eleven indigenous units, not including the Russia VVERs, the French EPRs or the recently completed US AP–1000s. They have two reactors of the Hualong One design under construction in Pakistan near Karachi and one planned at Chasma, the site of older, smaller Chinese reactors. They are also pursuing deals in the UK, Romania and Argentina as well as Bulgaria and several other countries. These strong state–financed commitments create the domestic and industrial capabilities needed for future innovation as well as to establish long–term political and economic relationships with countries of strategic interest. US historical influence over international standards and regulatory system development is therefore being challenged as well as US overall foreign policy interests in democracy and open markets. South Korean and Japanese companies are also international competitors but remain long–time US collaborators.
According to the World Nuclear Association about 30 countries are considering, planning or starting nuclear power programs. These range from sophisticated economies to developing nations. Is nuclear a viable option for emerging and frontier economies and how does installation and utilization differ in these locations from developed economies in terms of safety, non–proliferation as well as political stability, environmental and regulatory standards, supporting infrastructure and other factors?
I believe there is a major shift occurring in the global nuclear industry from the industrial countries to the non–OECD countries. Most of future global electricity growth will be in these countries and they want to diversify and develop cleaner energy systems. Despite the huge upfront costs, countries are deciding to accept attractive Russian and Chinese financing for these large, multi–billion dollar units. There is the national pride involved from joining the â€œnuclear club' as well as possible corruption in certain cases. Russia also offers military equipment as well as full fuel and operating services in its strategy to expand influence. Although both Russia and China have significant training efforts to develop local capacities, overall governance and transparency in a number of these countries is weak and the commitment to competent Nuclear Regulatory Commission (NRC)–like regulatory institutions is questionable. Although most of the countries have signed the Non–Proliferation Treaty (NPT) and the International Atomic Energy Agency (IAEA) Additional Protocol, the introduction of current nuclear power technologies in countries and regions – in which there are significant tensions and political conflicts, e.g. Middle East – raises serious concerns for US foreign policy.
Source: GCIS Deputy President Kgalema Motlanthe accompanied by Department of International Relations and Cooperation Deputy Minister Ebrahim Ebrahim and Energy Deputy Minister Barbara Thompson visit the State Nuclear Power Technology in Beijing.
While we don't hear a lot about efforts to encourage US nuclear power development, your report notes recent passage of the Nuclear Energy Innovation Capabilities Act (NEICA) and the Nuclear Energy Innovation and Modernization Act (NEIMA), as well as consideration of a Nuclear Energy Leadership Act, which was reintroduced in March 2019 with bipartisan support. Can you tell us more about current US efforts to encourage development of nuclear power and the other recommendations of your report on what is needed moving forward?
The efforts reflected in the recently passed NEICA and NEIMA acts as well as the new proposed legislation all reflect a desire to increase development of the next generation of nuclear technology and to advance government–industry partnership. The key focus of these initiatives is to (1) push the Administration to develop a clear strategy; (2) create the conditions for increased access to government laboratories and research facilities; (3) provide for long–term power purchase agreements for nuclear projects including by Department of Defense (DOD); (4) accelerate commercial demonstrations; (5) improve NRC capabilities and procedures for reviewing and licensing advanced reactors; (6) make available the high–assay low–enriched uranium (HALEU) fuel needed for some of the new reactor types; (7) design and build a versatile test–reactor that would facilitate R&D on new designs, materials, and operation of advanced systems.
The Task Force report lends support to these efforts but also places them in an international context that stresses the urgency of the mission and importance of maintaining our domestic capacity as a base for this innovation endeavor and eventual reentry to the international export market. Its highlights the need for a fully functional Export–Import Bank, and for the new Development Finance Corporation as well as US government assistance and international energy cooperation efforts to include nuclear as part of our international economic and energy engagement programs.
Source: Korea Shin–Kori NPP
Given high costs, geostrategic factors and other issues we have discussed, what is the potential for expanded international cooperation? More specifically, what is the potential for enhanced cooperation between the US and Japan and Korea and other countries active in nuclear power development? What are the considerations we need to keep in mind?
The development of a next generation of nuclear power systems offers many opportunities for expanded international cooperation at the governmental as well as commercial level – in the research, design, manufacturing, financing and construction as well as regulatory spheres. Major US companies, e.g. GE, NuScale/Fluor, ARC and Holtec are already working with companies in Japan, South Korea, Canada and other countries on these new systems. Some companies like TerraPower have had cooperation with Chinese companies but the Trump Administration implemented controls in October 2018 on exports for light–water SMRs and advanced non–light water reactors.
Whether the new systems under development can be competitive from a cost standpoint is of central importance. The costs will depend on whether advanced manufacturing of modular systems can be achieved and meet required quality standards as well as the efficiency of construction and whether the promise of 2–3 year deployment timeframes for SMRs can be realized. Availability of favorable financing and loan guarantees will be critical as will the government policies and incentives (e.g. carbon prices or tax incentives) for zero emission technologies.
The Task Force strongly believed that although international cooperation could be helpful and that the international market potential was substantial, it was essential for the US to demonstrate its capacity to build and operate the new systems safety and economically in the United States and to build a strong technical and experience platform for tackling the export market.
Source: IEA, World Energy Outlook 2018, Various Appendices
Thank you Bob for your time and support. Before we conclude is there anything else you would like to add in respect to nuclear power or other energy sector developments?
We are following up on the Task Force report and have created a network of interested stakeholders to continuing advocacy for the reforms. We are undertaking some work to quantify the national security value of nuclear power and I am pursuing some policy analysis on key countries in the developing world that are working with Russia and China on nuclear power development.
For more information, please access Atlantic Council's recent US Nuclear Energy Leadership: Innovation and The Strategic Global Challenge report.
Interview by Keith W. Rabin
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February 25th, 2020
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