Nuclear more competitive than fossil fuels: report

09 February 2017

"Nuclear power generation technologies are now cost competitive with fossil fuels and innovation is gathering pace across the sector," British consultancy Lloyd's Register says in a report published today. The report, titled Technology Radar - a Nuclear Perspective, is based on the "insights and opinions of leaders across the sector", as well as the views of almost 600 professionals and experts from utilities, distributors, operators and equipment manufacturers.

It is the "sister report" to the Lloyd's Register Technology Radar - Low Carbon, which reviews renewables, nuclear, energy storage and infrastructure, that was also published today. This is the third year that Lloyd's Register has conducted its Technology Radar research. Earlier editions have focused on the oil and gas sector.

Respondents were asked to rate a number of technologies in terms of their potential impact, the amount of time it would take for these technologies to hit the market, and how likely they are to be adopted once they do. They were also asked on reflect on the pace and success of innovation in their sector, and what they see as the major drivers and also the main challenges.

Lloyd's Register listed the report's main conclusions in a statement announcing its publication.

Nuclear is one of the cheapest options for power generation when lifecycle costs are taken into account, it said.

The potential contribution of small modular reactors (SMRs) is "unclear at this stage", though its impact will most likely apply to smaller grids and isolated markets. The "underlying modularisation technology" is, however, expected to have a major impact on the sector.

Nuclear will continue to be "part of the solution to climate change long into the future", it says. Although public acceptance is a major challenge in some countries, nuclear is likely to contribute to the energy mix "for the foreseeable future".

Software advances will be "instrumental" in transmission and distribution. "They are seen by respondents as the innovation that will be the quickest to arrive and the most likely to be adopted. Blockchain could reshape the way we think about the transmission and distribution of power by enabling a new era of peer-to-peer low carbon generation," it says. Blockchain is a distributed database that maintains a continuously-growing list of ordered records called blocks.

Electrical technologies will "transform storage", rather than mechanical storage or chemical technology innovations. "In particular, respondents expect supercapacitors, which will rapidly speed up charging times for large batteries, to have the greatest impact on storage," it said.

Deployment is a major barrier, it said. "Implementation of technology in nuclear is hindered by deployment, which faces its own distinct challenge. However, 71% of respondents agreed there had been an increase in the scale of deployment of renewable energy sources," it added.

Standardisation is a "much-needed" development for the low-carbon sector, with industry experts agreeing that "regional and global consensus" on regulations could speed up deployment and further reduce costs.

Alasdair Buchanan, energy director of Lloyd's Register, said: "We are very encouraged by the findings, which highlight not only a growing optimism across the industry but a vigorous and intelligent debate about the pathways to decarbonisation." He added: "Clearly, there are many uncertainties about exactly how the nuclear sector will evolve, but what is inarguable is that the conversation is no longer about 'should we?' but 'how should we do it?'"

Five findings

In the report, Richard Clegg, chief executive of the Lloyd's Register Foundation, says the agreement that came out of COP21 last year served as a catalyst for evaluating awareness of decarbonisation and energy security - and is leading to more countries contemplating nuclear as a viable low-carbon power source.

"People are essentially looking over the edge of the cliff and thinking, 'I don't want to go there', and so they begin to think differently about all the options, including nuclear," he said.

Respondents were asked to rate a number of technologies in terms of their potential impact on the nuclear sector, the amount of time it would take for these technologies to come to market, and how likely they are to be adopted once they do.

The first of five findings outlined in the report, looks at SMRs.

"When costs are levelised across the lifecycle, nuclear is one of the most cost-effective methods of power generation. Indeed, OECD research shows that nuclear is the lowest levelised cost option for power generation for all OECD countries under certain capital cost projections," the report says. "Regional differences in the cost of capital for nuclear projects mean that while cost can be a challenge for greenfield nuclear projects in Europe and North America, it is seen as less of an issue in Asia, where economies of scale, lower labour costs and more recent experience in building reactors all have an impact. In economies where financing traditional greenfield projects is seen as challenging, SMRs are often cited as the future because their size and the fact that they are ready to install keep investment costs low," it adds.

A number of the experts interviewed for the report predicted that SMRs would rank highly in terms of the innovations with the largest impact, but this turned out not to be the case, Lloyd's Register said. Respondents predicted that SMRs have a "low likelihood of eventual take-up, and will have a minimal impact when they do arrive", it said.

Tom Greatrex, chief executive of the UK's Nuclear Industry Association, says in the report there is very strong interest in SMR technology, adding that the government is running a competition which "might have a quite significant impact in the medium term".

One explanation for respondents' "lack of enthusiasm" for SMRs, Lloyd's Register said, is that modularisation technologies were also included on the list. "Respondents seem to favour the technologies that make SMRs possible, rather than the SMRs themselves," it said. "Modularisation technologies, respondents predict, will hit the market sooner than fully fledged SMRs. They also see these technologies as more likely to be adopted, and expect them to have a much larger impact on the sector."

The second finding of the report covers materials science, where it says developments are likely have a profound impact on the nuclear sector.

"Both reactors and reactor cores could look drastically different in the future thanks to new materials such as metallic fuel or silicon carbide, which will boost their strength, working life and resilience," the report says.

David Scott, advisor to the chairman at the Abu Dhabi Executive Affairs Authority, says in the report that most fuel used today is uranium oxide, a ceramic fuel. Although it is safe and effective, he says, its performance "tops out" at around two years inside the reactor.

"This imposes a limit on how long you can operate without having to refuel, and how much energy you can load into the reactor at the beginning of the process. However, metallic or other alternative fuel designs could be available within the next decade for large land-based reactors, with major implications for operating cycles and safety," Scott said.

The third finding is there is "plenty of room for improvement" for nuclear waste management strategies.

"Countries such as France, the UK and the US, which have the longest nuclear histories, first devised their strategies for dealing with nuclear waste in the 1950s - at the height of nuclear weapons testing - and have not significantly revised them since," it says.

The research found that "nuclear waste disposal innovation, for example, would have a considerable impact and a good likelihood of implementation - but would have to appear in the longer term."

It adds that many of the latest reactor designs can achieve 'deep burn' of nuclear fuel - leading to a smaller and much shorter-lived waste stream. The potential of these reactors has led some industry experts to advocate the adoption of dry cask surface storage of nuclear waste, the report says.

"What is currently unusable and designated as waste may one day be usable as fuel - much better then, they argue, to store it in a location that is easier to access than traditional geological disposal solutions," it adds.

The fourth finding covers the deployment of new reactors.

"Predictable pricing and scheduling of nuclear projects have long been seen as key non-technical challenges. The executives we polled for this study agree, with deployment topping the list as a critical issue for the sector today; it was selected by 17% of nuclear respondents," the report says.

The 'boom-and-bust' nature of development affects experience in deployment and the maturity of supply chains, but deployment appears to be "less of a challenge” for Asian respondents, with only 7% highlighting it as a major barrier compared with 18% in Europe and 21% in North America. This could be as a result of the economies of scale that have been built up in key Asian markets in recent years, the report says.

Public opinion, the fifth finding of the report, is seen as "more of an issue in North America", where 16% cite it as a major barrier, and Europe (17%), than in Asia Pacific (9%) or the Middle East (6%).

"In Asia, the waste issues are seen by respondents as a much more critical issue than public opinion - although waste disposal issues often feature in the negative press that nuclear receives in western markets," the report says.

"Although in the low-carbon context nuclear is sometimes discussed as a stop-gap solution until renewables' intermittency issues can be solved, in fact, its potential as a low-carbon power source is much greater than this. Given developments in efficiency and lifecycle and the fact that in many parts of the world, nuclear is now the cheapest power generation option, it should form a critical and permanent component of the low-carbon agenda," it says.

Researched and written
by World Nuclear Association