The Future of the Nuclear Fuel Cycle: Can LWRs Meet Post-Carbon Energy Demands?

Any account of the future of nuclear power should place be based on an understanding of the potential future energy resources. We know that in the next 40 years global energy resources are expected to undergo a remarkable transformation. There is little doubt that such a transformation will take place, and that nuclear power will play a major role in that transformation. Indeed, if the analysis offered by Nuclear Green is correct, nuclear power may and probably will play a predominate role in the transformation of our energy resources. The Nuclear Green analysis is also supported by several analyses that have appeared in Brave New Climate.

Climate scientists indicate that in order to prevent significant and expensive economic disruptions due to climate change, fossil fuel dependent energy use must be reduced by 80% over the next 40 years. Even if were were not facing climate change crude oil production has reach or has nearly reached its peak, and can be expected to decline during the next generation. Coal production has already or may soon reach its peak, while the future of natural gas reserves is not clear. In addition a controversy about the carbon mitigation value of natural gas remains unresolved. Thus the future of fossil fuels seems likely to be one of declining long term production.

The major future energy problem then is fossil fuel substitution and any study of the future nuclear fuel cycle must at the very least take future energy needs into account. Currently nuclear power is used primarily to produce one form of energy, base load electricity. But an analysis of fossil fuel use by our society suggests that many energy systems, currently powered by fossil fuels will need to be replaced. Some replacements are possible by expanding the use of base load electricity, but for many other energy demands, current nuclear technology (Light Water Reactors) is not a strong replacement candidate. The problems of current nuclear technology include limited heat generation capacity, high capital costs, and widespread public suspicion of nuclear safety. While Light Water Reactor technology is economically competitive with so called "clean energy" technologies, the cost of nuclear electrical generation would increase dramatically with a drop in capacity utilization. Thus a nuclear response to peak electrical demand using LWR technology would be prohibitively expensive, while the unreliability of "clean energy" sources makes them unlikely candidates for low cost peak electrical generation.

LWRs operate at relatively low heat, making LWR technology an unlikely source of industrial process heat. Again the unreliability and geographic limitations of "clean" heat sources makes the use of clean energy technology in industrial processes heat, very problematic, and impractical for most of the country.

Social issues related to nuclear power arise because of public fear of the accidental release of radioactive materials form reactors. This public opposition leads to stringent and at least partially unnecessary regulation of nuclear sourced energy as well as public support for and demand for "clean" energy. From the stand point of fossil fuel replacement, public support for "clean" energy would not be a problem if clean energy were reliable and low cost, but "clean" energy is both unreliable and expensive.

Future public acceptance of nuclear technologies becomes a significant concern in evaluating the future of the fuel cycle.

During a 40 year period of time, developments in nuclear technologies can profoundly effect the fuel cycle picture. it is probably impossible to say with certainty what the function of nuclear power will be 40 years from now.

Finally, I have already alluded to the importance of capitol costs, in evaluating future nuclear technology. It may be that conventional nuclear technology, while the lowest cost future energy technology, causes economic damage to national economies by failure to generate energy at a cost that is competitive on international markets.

A comprehensive study of the nuclear fuel cycle should include am evaluation of future energy demands, social response to the projected fuel cycle, and the effect of the adoption of fuel cycle technology on national economic competitiveness. At the very least the study should acknowledge that energy demand for base load electricity, load following, backup and peak load electricity, industrial process heat, and ship propulsion could potentially effect both nuclear fuel demand, and the nuclear fuel cycle.

Massachusetts Institute of Technology has recently undertaken to offer an account of The Future of the Nuclear Fuel Cycle. To its credit, the MIT report does not ignore the social, political and economic diminutions of future energy change. Yet the MIT treatment of these considerations are clearly inadequate.

For example, a maj0r finding of the report is that

LWRs will be the workhorse of the nuclear fleet for decades.

Yet only for base load electricity is this likely to be true. LWRs are not likely energy sources if other, lower cost, and technically more adequate energy resources are available. Even for base load power electrical utilities find the capital costs of LWRs daunting. There is incontrovertible evidence of this, at best a mere handful of LWRs are likely to be built in the United States during the next decade. Will LWR building pick up beyond 2020? Who knows? Even if we factor in small Light Water Reactors (SLWRs) it is difficult to see LWR technology penetrating beyond base load electrical generation. SLWRs would be a high cost option, for load following, back up and peak electrical generation. The United States Navy clearly sees advantages for ship propulsion by nuclear power, but hesitates to use it for most of the surface fleet because of its cost. It thus seem likely that sea born shipping with far more significant cost restraints than the naval surface fleet will ever be powered by LWRs.

Both costs and the temperature restraints of LWRs are significant impediments to the use of LWRs in the production of industrial process heat. These considerations might be of passing interest to the study of the future fuel cycle, were low cost, reliable, and flexible non-nuclear energy alternative available. They are not. "Renewable energy" are expensive, inflexible and unreliable, in the face of human energy demands.

Thus there is likely to be demand for energy from nuclear sources that will require alternatives to LWR technology.

The MIT study states,

The viability of nuclear power as a significant energy option for the future depends critically on its economics. While the cost of operating nuclear plants is low, the capital cost of the plants themselves is high. This is currently amplified by the higher cost of financing construction due to the perceived financial risk of building new nuclear plants. For new base load power in the U.S., nuclear power plants are likely to have higher levelized electricity costs than new coal plants (without carbon dioxide capture and sequestration) or new natural gas plants. Eliminating this financial risk premium makes nuclear power levelized electricity cost competitive with that of coal, and it becomes lower than that of coal when a modest price on carbon dioxide emissions is imposed. This is also true for comparisons with natural gas at fuel prices characteristic of most of the past decade. Based on this analysis, we recommended in 2003 that financial incentives be provided for the first group of new nuclear plants that are built. The first mover incentives put in place in the U.S. since 2005 have been implemented very slowly.

And recommends,

Implementation of the first mover program of incentives should be accelerated for the purposes of demonstrating the costs of building new nuclear power plants in the U.S. under current conditions and, with good performance, eliminating the financial risk premium. This incentive program should not be extended beyond the first movers (first 7–10 plants) since we believe that nuclear energy should be able to compete on the open market as should other energy options.

The writers of the MIT report seem to anticipate that the building of 7 to 10 new nuclear plants, facilitated by "incentives" would lead to a steady and growing nuclear build out, as LWRs took their place in the carbon replacement line up. This view fails to even access the impact of SLWRs on the base load market, but even considering that impact we cannot be assured that the transition to LWRs will be smooth or that it will lead us to a satisfactory post-carbon energy supply. Yet the MIT report concludes,

For the next several decades, light water reactors using the once-through fuel cycle are the preferred option for the U.S.

We must ask, preferred option for what. As I have indicated there are a number of significant post-carbon energy demands that can neither be meet by LWRs or by "renewable energy" sources. Thus the possible us of alternative nuclear technologies to meet post-carbon energy demands, cannot be discounted.

There are a number of potential nuclear energy technologies that are potentially available for post-carbon applications. These include Liquid Metal Fast Reactors, Graphite Moderated Gas Cooled Reactors, and Molten Salt Reactors. These reactor options can be ranked by heat output and expense.

By industrial process heat potential the rankings from lowest to highest would be,

* LWRs
* LMFRs
* MSRs
* HTGRs

By levelized electrical cost the probable ranking from most expensive to least expensive,

* LMFRs
* HTGRs
* LWRs
* MSRs

These rankings would require some comment. First, the Industrial heat potentials of tested MSR technology is around 700 degrees C, while the tested potential of HTGRs would be in the neighborhood of 1000 C. The potential top temperature of MSRs would be around 1200 C, while the potential top temperature of the HTGR would be around 1600 C.

Secondly, the levelized costs rankings are based on both potential complexity, as well as labor and materials inputs. The rankings are to a certain extent speculatrive. Gas cooled reactors require larger cores, than thus greater materials inputs. In practice HTGR cost will probably be close LWR costs. LMFR costs have proven rather robustly to be higher than LWR costs. MSRs have smaller and simpler cores, thus decreasing both labor and materials inputs, relative to LWR costs.

Both the HTGR and the MSR offer potential advantages for industrial heat. The MSR would be the clear favorite for low cost industrial heat at temperaturs of up to 700 C, while the HTGR offers maximim heat of around 1000 degrees.

For shipping propultion, and load following, backup and peak generation capacity MSR technology offers attractive cost advantages. Even for a base load generation role, MSR technology would appear to offer a substantual cost advantage over LWRs.

It is not to the credit of the MIT report authors and staff, that they failed to consider the implacations of MSR technology on the future of nuclear fuel cycles.

The NEI and Me

David Walters and I had an online conversation yesterday. It was clear from the conversation why we are both bloggers, and why we are nuclear bloggers. We discovered during the course of the conversation that we were among the few people in the world to have watched the NEI's YouTube videos of its President and CEO Marvin S. Fertel's February 12 Wall Street Briefing. I was very impressed with Fertel, who came across as intelligent and articulate, and aware of many of the issues that I raise. The NEI's YouTube videos were so poorly edited that I suspect that the NEI outsourced that job to Greenpeace. Greenpeace also appears to be in control of the distribution of these videos, because most of them have been seen 10 times or less, despite having been posted a week ago. Both David and I were favorably impressed with Fertel's briefing.

I must admit that I have largely discounted the NEI up till now, because it represents the interests of the conventional nuclear industry, but I believe that I need to take another look at the NEI on the basis of the content of Fertel's briefing. Fertel acknowledged the two problems that first lead me to think about the Molten Salt Reactor/LFTR as an alternative to conventional nuclear power. Those problems are the high cost of conventional nuclear power, and limitations on potential deployment of nuclear power. Those limitations are imposed by the expensive by expensive and difficult to manufacture parts required in the construction of LWRs, the daunting organizational task that LWR construction demands, and the 12 Million plus hours of labor that must go into every large LWR.

I suspect that if I could talk with Fertel off the record, he would have no problem with my solution to the problem of LWR limitations. If you are a freelance blogger, who has no illusions about making money from your efforts, you have no constraints on what you can say. If you are charged with taking "the nuclear industry's message" to Wall Street and the media, what you can say is limited by your social context. If you rise at 4:00 AM and sit in front of a computer in a state of partial undress, you are compensated with a certain freedom to say what you think, but not by money.

It will be not without irony then, that I certainly and David I suspect, are going to serve as "the running dogs of capitalism" by helping the NEI to get its message out. This despite the fact that I am an open critic of the conventional nuclear industry that Fertel and the NEI represents. I am of course not a crazy critic like Amory Lovins and Joe Romm.

My criticism of the industry which Fertel represents has nothing to do with seeing it as somehow evil. Rather it comes from a concern about three problems. The first is problem is that of anthropogenic global warming, which if not certain is certainly a probable future for global society. The second is the cost of replacing fossil fuel basis energy generation with conventional nuclear and reliable renewable energy sources. I felt that this was a problem before the wreckage of the global financial system began to become apparent. From the prospective of 2009 rather than 2007 the issue of affordability has become much more urgent, as the world economy appears to be precariously close to an abyss. The losses of the last year will not easily be salvaged, and will be an impediment to expensive energy fixes for years if not decades to come. The third problem is twofold. The first is consequences to advanced societies of significant energy shortages. Not only will these shortages effect the quality of life enjoyed by ordinary members of advanced societies, but it will adversely effect efforts to improve the lives of members of the worlds poorer societies. All boats rise with abundant energy, and fall with energy poverty.

The NEI's Fertel, acknowledges that with today's preferred energy solutions energy is going to become more expensive in the future. For me, and for other alternative nuclear bloggers like David Walters and Kirk Sorensen, this is unacceptable. We think that there are other, more acceptable energy solutions.

Energy Subsidies

A new study. titled Analysis of Federal Expenditures for Energy Development challenges the assertion that nuclear power receives large subsidies from the Federal Government. The study, by About Management Information Services, Inc. ( MISI), demonstrates that much of that the Federal investment in nuclear research included a broad spectrum of projects, and was not simply confined to civilian reactor research. MISI has a long history of research of energy and economics issues for the National Academy of Sciences, the U.S. Department of Energy and others.

MISI looked at Federal energy related expenditures between 1950 and 2006. It demonstrates that Federal spending on Nuclear power research peaked during the 1950's and dropped significantly after. The study finds that among energy sources oil, natural gas, coal, and Hydro-electric generation have received larger federal subsidies than nuclear during the time frame.

A review of MISI data, however, reveals that much of the "Federal research and development subsidy" did not in fact benefit the civilian power industry.  The study also reveals that most of the so called research subsidy to the "nuclear industry", was not focused on conventional power reactor technologies. Only $5.8 billion, was spent on Light Water Reactors, the only civilian nuclear technology used to generate power in the United States. In contrast various research projects related to the breeder reactor received $23.78 Billion and more that $38 Billion dollars were spent on other reactor research projects that were unrelated to the light water reactor. Only Light Water Reactor research benefited the civilian nuclear power Industry, and thus could be considered a subsidy.

Most Federal spending on reactor research occurred before 1975. Between 1998 and 2003 Federal spending on all reactor research was only about 10% of federal Reactor research levels in the 1970's and 1970's research levels were far lower than during the 1950's. Since 1976 over 50% ($14.5 billion) of Federal reactor research expenditures have been devoted to the LMFRB. In contrast, only 6% ($1.68 Billion) of Federal nuclear research dollars since 1976 have been spent on Light Water Reactor research, despite the fact thatr Light Water Reactors provide 20% of power in the United States. Another $3 Billion was spent on reactor waste management research, but most of that money cannot be considered as a subsidy for the Civilian nuclear industry, because that industry continues to manage and store its own waste in temporary local storage facilities at its own own facilities.

Unlike all other energy sources there has never been a tax based subsidy for the nuclear industry. In contrast, renewables as well as oil, gas, and other energy forms receive heavy tax subsidies. Most of the cost of hydro construction is paid for by the Federal government with no return to the tax payers. Most energy forms have received more money from the Federal Government than they have paid to it. The one exception is the civilian nuclear industry, which has paid $14 billion more to the Government that it has received. The imbalance came about because the Federal Government has failed to provide waste management services to the nuclear industry, which nuclear plants owners are paying for. Thus fat from receiving subsidy from the Federal Government, the civilian nuclear industry has in fact subsidized the Federal Government, and the net value of that subsidy is far greater than the value of all of the benefits that the civilian power industry has received through the Federal Government. If we subtract the $5.8 of R & D expenditures on Light Water Reactors paid by the Federal Government, we find that the Civilian Power Reactor Industry has given the government a net subsidy of $8.2 Billion. In addition unlike other energy technologies including renewables, the civilian nuclear power industry pays 100% of its tax obligations.

Payments into the the nuclear waste fund, have not had their value adjusted for inflation, nor is interest paid on the fund's balance. The inflation adjusted value of the of the fund, the value of the
interest on the fund the fund and the value of future contributions on the fund, makes the nuclear electrical industries contribution much bigger than is stated by nuclear critics. Add to this the fact that the Federal government is obliged to pay for the one third of the storage at Yucca Mountain that is used for nuclear waste from government facilities, and the supposed government subsidy disappears.
A note on Price-Anderson: Critics of nuclear power consider the Price-Anderson Act to be subsidy. This is a conceptual error. In fact the primary function of the Price-Anderson Act is to create a form of self-insurance for the civilian nuclear power Industry. Under Price-Anderson, the primary insurance obligation falls on the reactor owner. Reactor owners must obtain the largest accident insurance protection available on the insurance market. Beyond that all reactor owners have a joint obligation to pay at least $9.5 Billion into a compensation pool, in the event of a large accident. It is possible that the Federal government could impose an even larger obligation on reactor owners. Only in the event of a larger payout would the Federal Government be under any obligation. Since Government has never paid a cent in accident compensation, and and given the safety features of Light Water Reactors, it is virtually impossible that the Government every will pay out a cent under the Price-Anderson Act, and pays no insurance premium, the Price Anderson Act ought to be considered a potential subsidy, rather than an actual subsidy. The value of Price-Anderson cannot be determined, since it is very unlikely that any compensation will every be paid out by the government under Price-Anderson. In the absence of a Government payout, the Price-Anderson acts that the primary obligation for all claims payments up to $10 Billion rests with the Nuclear Industry.

We ought to compare the Nuclear Industry's obligation under the Price Anderson Act with the insurance of the hydro electric industry. Serious accidents involving large scale damage to property and loss of human life are far more likely with hydro electric dams than a catastrophic failure of a a nuclear plant. Typically nuclear plants have highly redundant safety systems, and place at least 5 levels of protection between radioisotopes trapped in nuclear fuel, and the civilian population. In contrast, dames typically have only one layer of defense between impounded waters and down stream populations and property. The failure of a dangerous dam like the Cedar Creek Dam on the Cumberland could kills thousands of people, and cause billions of dollars in damage. There is no Price-Anderson Act for the hydro-electric industry, perhaps because the Federal Government owns most of the dams.