The cost of abandoning nuclear

1 November 2018

Two recent reports indicate that unless nuclear energy is meaningfully incorporated into the global mix of low carbon energy technologies, the challenge of climate change will be more difficult and costly to address.

In the future of nuclear energy in a carbon-constrained world, released by the MIT Energy Initiative (MITEI) in September, the authors analyse the reasons for what they regard as the current global ‘stall’ in building nuclear capacity (which currently accounts for a meagre 5% of global primary energy production) and recommend a number of measures that could be taken to arrest and reverse that trend.

The study group was led by MIT researchers in collaboration with colleagues from Idaho National Laboratory and University of Madison-Wisconsin.

In the 21st century the world faces the challenge of drastically reducing emissions of greenhouse gases while simultaneously expanding energy access and economic opportunity to billions of people. The MITEI study examines this challenge in the electricity sector, which has been identified as an early candidate for deep decarbonisation. In most regions, serving projected load in 2050 while reducing emissions will require a different mix of electrical generation assets from the current system. While a variety of low- or zero-carbon technologies can be employed in various combinations, the MIT analysis shows the potential contribution nuclear can make as a dispatchable low-carbon technology. Without that contribution, the cost of achieving deep decarbonisation targets increases significantly. The least-cost portfolios have an important role for nuclear, whose share grows significantly as the cost of nuclear drops.

Despite this promise, the prospects for the expansion of nuclear energy remain dim. The fundamental problem is cost. Other generation technologies have become cheaper in recent decades, while new nuclear plants have only become costlier. This disturbing trend undermines nuclear energy’s potential contribution and that increases the cost of achieving deep decarbonisation. The MIT study looks at what is needed to arrest and reverse that trend.

The study has surveyed recent light water reactor construction projects around the world and examined recent advances in cross-cutting technologies that can be applied to nuclear plant construction for a wide range of advanced nuclear plant concepts and designs under development. To address cost concerns, the MITEI study has two recommendations.

Proven construction management practices

The study notes that recent experience of nuclear construction projects in the USA and Europe has demonstrate repeated failures of construction management practices. They fail to deliver products on time and within budget. Several corrective actions are urgently needed:

  • Completing greater portions of the detailed design prior to construction;
  • Using a proven supply chain and skilled workforce;
  • Incorporating manufacturers and builders into design teams in the early stages of the design process to design for efficient construction and manufacturing to relevant standards;
  • Appointing a single primary contract manager with proven expertise in managing multiple independent subcontractors;
  • Establishing a contracting structure that ensures all contractors have a vested interest in the success of the project; and
  • Cultivating a flexible regulatory environment that can accommodate small, unanticipated changes in design and construction in a timely fashion.

Serial manufacturing of standardised plants

Using multiple, standardised units, especially at a single site, affords opportunities for considerable learning from the construction of each unit. In the USA and Europe, where productivity at construction sites has been low, MIT recommends expanded use of factory production to take advantage of the manufacturing sector’s higher productivity. Using cross-cutting technologies, including modular construction in factories and shipyards, advanced concrete solutions (eg, steel-plate composites, high-strength reinforcement steel, or ultra-high performance concrete), seismic isolation technology, and advanced plant layouts (eg, embedment, offshore siting), could cut the cost and build time. For less complex systems, or at sites where construction productivity is high (as in Asia), conventional approaches may be the lowest cost option.

The study emphasises the broad applicability of its recommendations across all reactor concepts and designs. Cost-cutting opportunities are pertinent to evolutionary Generation III LWRs, small modular reactors (SMRs), and Generation IV reactors.

Without design standardisation and innovation in construction approaches, the study authors do not believe the advanced reactors will produce the level of cost reductions needed to make nuclear electricity competitive with other generation options. 

In addition to its high cost, the growth of nuclear energy has been hindered by public concern about the consequences of severe accidents. These concerns have led some countries to renounce nuclear power entirely. To address safety concerns, the MIT study calls for inherent and passive safety.

Reactor core materials should have high chemical and physical stability, high heat capacity, negative reactivity feedbacks, and high retention of fission products. Engineered safety systems that require limited or no emergency power and minimal external intervention are likely to make operation simpler and more tolerant of human errors. Such design evolution has already occurred in some Generation III LWRs and in new plants built in China, Russia, and the USA.

Passive safety designs can reduce the probability that a severe accident occurs, and mitigate the offsite consequences in the event an accident does occur. Such designs can also ease the licensing of new plants and accelerate their deployment.

The study authors judge that advanced reactors like LWR-based SMRs (eg, NuScale) and mature Generation IV reactor concepts (eg, high temperature gas cooled reactors and sodium cooled fast reactors) have these features and are ready for commercial deployment. Further, the study’s assessment of the US and international regulatory environments suggests that the current regulatory system is flexible enough to accommodate licensing of these advanced reactor designs. Modifications to the current regulatory framework could improve the efficiency and efficacy of licensing reviews.

Key actions by policy makers are also needed to capture the benefits of nuclear energy.

Decarbonisation policies should create a level playing field that allows all low carbon generation technologies to compete on their merits. Investors in nuclear innovation must see the possibility of earning a profit based on selling their products at full value, which should include factors such as the value of reducing carbon dioxide emissions. Policies that close off a role for nuclear energy discourage investment in nuclear technology. This may raise the cost of decarbonisation and slow progress toward climate change mitigation. Incorporating carbon dioxide emissions costs into the price of electricity can more equitably recognise the value of climate-friendly energy technologies. Nuclear generators would be among the beneficiaries of a level, competitive playing field.

Meanwhile governments should establish reactor sites where companies can deploy prototype reactors for testing and operation oriented to regulatory licensing. Such sites should be open to diverse reactor concepts chosen by the companies that are interested in testing prototypes. The government should provide appropriate supervision and support—including safety protocols, infrastructure, environmental approvals, and fuel cycle services—and should be directly involved with all testing.

Finally governments should establish funding programmes around prototype testing and commercial deployment of advanced reactor designs using four levers: funding to share regulatory licensing costs; funding to share research and development costs; funding for the achievement of specific technical milestones; and funding for production credits to reward successful demonstration of new designs.  


Above: Two scenarios for UK energy mix from the new Nuclear Watch Institute Report show system generating costs are higher without nuclear energy 


UK-specific scenario

A second report, launched in September in London, also warns that should the UK abandon nuclear energy in favour of a mix of natural gas and renewables, electricity generation costs would rise by 15%, and power sector carbon intensity would rise from 51gCO2/kWh to 186gCO2/kWh in 2030.

The False Economy of Abandoning Nuclear Power: Techno-Zealotry and the Transition Fuel Narrative, was commissioned by the New Nuclear Watch Institute (NNWI), an industry-supported think-tank. The report focuses on the impact on system generation cost of omitting nuclear energy from the UK power sector in the context of a meaningful climate policy. It compares two scenarios: an ‘enforced nuclear phaseout’ and ‘unconstrained optimisation’.

The phaseout scenario assumes cancellation of the new-build projects at Hinkley Point C and Wylfa Newydd as well as accelerated decommissioning of existing nuclear plants. To compensate for the loss of capacity, the authors assume offshore wind capacity increases to 30GW in 2030, with residual demand met by a combination of open cycle gas turbines (OCGT) and closed cycle gas turbines (CCGT).

In the second scenario, nuclear power is not phased out and capacity is determined endogenously according to the least-cost optimisation procedure.

The makeup of the two scenarios and the resulting generating costs are shown in Tables 1&2.

A four-step process was used to calculate the levelised cost figure for each energy source. First, technology-specific generation cost curves were used to determine the optimal operation (in terms of full load hours or FLHs) of the conventional technologies. An analysis of residual load using the optimal FLHs was then conducted to establish the required capacity and generation of each technology. Next, a load factor for each technology was imputed and used to determine the scenario-specific levelised cost. Finally, the system-level generation cost was imputed using the levelised cost figure and the proportion of total demand accounted for by each energy source.

In addition to the cost, the NNWI report also assesses the environmental impact of abandoning nuclear power.

In the nuclear phaseout scenario, total low-carbon generation in the UK in 2030 falls to 48%. As a result, the power sector emits an additional 35.2 million tonnes of CO2 emissions, up 265% from the unconstrained scenario. This increases the carbon intensity of the power sector from 51gCO2/kWh to 186gCO2/kWh.

The report cites the UK Committee on Climate Change (CCC), which notes an effective policy to support the steady development of low-carbon technologies implies a transition to a power system intensity of below 100gCO2/ kWh by 2030.

Commenting on the study’s findings Tim Yeo, chairman of NNWI, said:

“The report’s conclusions are stark. Abandoning nuclear power leads unavoidably to a very big increase in carbon emissions which will prevent Britain from meeting its legally binding climate change commitments.

“The message is clear: If the UK is to successfully meet the challenges faced by its power sector, the world’s only source of low-carbon baseload power generation - nuclear - must feature strongly in its ambitions.”

The inclusion of nuclear energy does not mean that natural gas will have a role; both technologies are present in the optimisation scenario because their contrasting characteristics support system reliability and flexibility. However, the report does warn that a transition to gas could have wider consequences.

Fugitive methane emissions or unintended leaks of CH4 along the gas supply stream are made increasingly likely by the shift to shale gas, which the report says could undermine the environmental merits of switching from coal to gas. (Methane is 28 times more potent as a greenhouse gas than CO2 over a 100-year period.)

There is also a threat that by adopting gas as a medium-term baseload fuel, the power sector may become locked in to carbon-intensive production for longer.

The report also notes the upward trajectory of natural gas prices, citing a 2017 Cost of Generating Electricity report by the UK’s Department for Business, Energy and Industrial Strategy (BEIS), which projects the levelised cost of electricity produced by CCGT will rise by 8% to 2020 and 60% to 2030. This leads to nuclear power having a lower levelised cost than gas-fired generation in 2030, although the NNWI report goes on to acknowledge that the extent of this difference is contingent on other factors, including endogenous load factor.  

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