Opinion: Some big investors back nuclear power, a potential savior from the world’s energy crisis

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Investors have embraced once-specialized alternative energy sources, including solar, wind and geothermal power, as governments crack down on polluting and toxic fossil fuels.

But what is often avoided is any discussion of a reliable, carbon-free source that can evolve more than any other form of alternative energy: nuclear.

Investors concerned with sustainable development have had a difficult relationship with nuclear energy. The major drawbacks abound: the high costs and long delays in building power plants and handling spent fuel (nuclear waste) and the potential for proliferation.

Bill Gates, Warren Buffett

However, at a time of climate triage, nuclear energy is getting a makeover. The best-known example is Bill Gates’ state-of-the-art nuclear reactor company TerraPower, which has partnered with GE-Hitachi Nuclear Energy and Berkshire Hathaway’s BRK.B,
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power company, PacifiCorp, to eventually build a small next-generation nuclear reactor using new fuel technology.

Plus, as the global economy struggles to bounce back from last year’s lockdowns, disruption to traditional energy supplies, and a shift to renewables, nuclear advocates can use this time to push it as a basic clean energy source that can work in harmony with wind and solar power. energy and as an alternative to carbon-emitting natural gas which is often associated with renewable energies.

High level summit

The use of nuclear power to advance the goals of the Paris Agreement will likely be discussed at the United Nations Climate Change Conference, known as the COP26 Summit, which begins on October 31 in Scotland. In its report, the Intergovernmental Panel on Climate Change earlier this year said nuclear has “the potential for an expanded role as a cost-effective mitigation option” but can cause “big problems ”if the inconveniences are not treated with care.

These “big problems” are the obstacles nuclear faces, but new nuclear technologies are trying to solve some of these problems.

Smaller and safer reactors

Alex Gilbert, project manager at the Nuclear Innovation Alliance, which supports the commercialization of advanced nuclear power systems, says the new designs are a fraction of the size of a conventional nuclear power plant and use much less fuel.

Gates’ TerraPower reactor would produce around 345 megawatts of thermal energy. The microreactors, similar to the module that nuclear company X-energy is planning for the Department of Defense, are small enough to fit on a semi-trailer and produce 10 megawatts (MW) or less and are roughly the size of a wind turbine.

Comparatively, the EXC of Exelon,
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The recently re-licensed two-unit Braidwood Generating Station nuclear power plant in Illinois generates 2,389 megawatts of electricity.

The TerraPower and X-energy projects are under an advanced reactor demonstration program, according to Gilbert, and could potentially be online in 2029 or 2030. A third advanced reactor, from NuScale, of around 250 MW, could also be ready at this time. These would be three companies producing electricity at the utility level.

But the first on the market could be a 4 MW microreactor from Oklo. The United States Nuclear Regulatory Commission is reviewing it. Because of its small size, if approved, it could be built and brought online as early as 2025, Gilbert says.

New advanced reactor designs could more easily run with renewables on the power grid, he says, noting that different systems have different strategies. TerraPower has an integrated molten salt storage system where plant production can balance with the grid, while NuScale has multiple modules that can be turned on or off as needed.

Gilbert says these advanced reactors use fuel more efficiently and use much less. One of the fuel types under discussion is high-dose, low-enriched uranium, which allows these new reactors to use up to 20% uranium 235, the isotope that produces energy during a chain reaction, and get more power. Conventional reactors only use 5%. This design makes spent fuel less radioactive in the short and long term compared to conventional reactors

“This means that the amount of waste that you volumetrically generate can potentially be much lower,” says Gilbert.

This type of uranium is used in the Triso fuel that some of the newer models use. Triso contains a small amount of uranium surrounded by silicon and carbon-based materials and itself acts as a containment vessel. This coating also makes its use in proliferation extremely difficult.

Another key difference is that many of the newer systems are designed to automatically shut down with the need for human activity to ensure safety, which was one of the problems with Fukushima in Japan, which experienced failures with its active systems.

Sustainability issues

Peter McNally, global head of industrial materials and energy at Third Bridge, says that for some ESG (environment, social and governance) investors nuclear power is out of the question. However, he also points out that the turbulence in the fossil fuel markets creates a security problem in itself.

“The security of fuel sources has become a key issue as the energy and electricity crises have globalized,” he says. “On this metric, the record of nuclear energy over the past decade has been excellent. Finally, with regard to its carbon benchmarks, nuclear power competes with all available low and carbon-free sources. ”

Garvin Jabusch, chief investment officer of Green Alpha Advisors, whose company manages sustainable portfolios, recognizes how divided sustainability investors are over nuclear and the need to decarbonize, adding that it is not completely against nuclear energy.

“I think existing nuclear reactors should be allowed to run out of life, because they’re there anyway,” he says, as they produce carbon-free energy.

“Die for life”

But he doesn’t think it’s a good idea to build new ones, even with advanced designs, citing common concerns with nuclear: spent fuel storage, proliferation potential and costs.

“Sustainable development is not limited to greenhouse gas emissions. Let’s not forget that these things require deadly fuel for life, ”he says.

Some advanced nuclear reactors are looking to use spent fuel in their designs, and Jarbusch says that’s something he would be interested in. “It would be a great way to both remove waste from existing stocks and generate a bunch of zero carbon energy,” he says.

Regulations, funding

Regulatory updates can encourage ESG investors. Barclays says the EU Taxonomy for Sustainable Activities, a classification system that Europeans are developing, could provide “more clarity on the role of nuclear in the green transition, which could help build a stronger consensus among investors still uncertain of the nuclear energy sector from an ESG point of view. “

David Yurman, a nuclear industry observer who blogs under Neutron Bytes, says the industry could use funding from ESG investors looking to support carbon-free energy, but he’s not sure the industry is ready for it. scrutiny of these investors.

“The biggest concern these companies are going to have with ESG investors is to verify the data they have collected for their ESG reports,” he said. “Investors will say, ‘How do I know your data is good? “”

Companies also face a stumbling block common to any small private enterprise: being able to do the extra due diligence required by many ESG investors, Yurman said.

“They are just looking to the kettle for the next round of funding, to develop the product, to overcome regulatory burdens. ESG reports just aren’t going to get the level of attention they probably need, at least not right now. But that could happen in the future, ”he says.


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