News in Depth: Nuclear, the Next Generation

In our continuing effort to explore what’s next for nuclear, we turn this week to the recent announcement that China will begin construction on a 600 MWe fourth generation fast neutron reactor. While details of the project are few, there is speculation that this project may be the first successful partnership between China and TerraPower, the Washington state based energy firm founded and chaired by Microsoft co-founder and philanthropist Bill Gates.

In this week’s News in Depth, we will take a look at the technology behind fourth generation fast neutron reactors, the story of TerraPower, and China’s efforts to be at the forefront of nuclear energy development and deployment.

Next Generation Technology

As the World Nuclear Association (WNA) notes, fourth generation fast neutron reactors (FNRs) have been in development for decades. As of 2010, over 400 reactor-years of operation have been logged with approximately 20 reactors in different periods. The WNA also provides a useful summary of the initial motivation behind FNR tech:

The FNR was originally conceived to burn uranium more efficiently and thus extend the world’s uranium resources – it could do this by a factor of about 60. From the outset, nuclear scientists understood that today’s reactors fuelled essentially with U-235 exploited less than one percent of the energy potentially available from uranium. Early perceptions that those uranium resources were scarce caused several countries to embark upon extensive FBR [Fast Breeder Reactor] development programs.

The technology is incredibly complex, but for reference note that

Natural uranium contains about 0.7% U-235 and 99.3% U-238. In any reactor some of the U-238 component is turned into several isotopes of plutonium during its operation. Two of these, Pu-239 and Pu-241, then undergo fission in the same way as U-235 to produce heat. In a FNR this process is optimized so that it ‘breeds’ fuel. Some U-238 is burned directly with neutron energies above 1 MeV.

TerraPower‘s Travelling Wave Reactor (TWR) leverages the knowledge gained from decades of FNR research to produce what they describe as “Generation IV, liquid sodium-cooled fast reactor.”

TWR

Image Source: TerraPower

China’s New Project

According to the WNA, China first began research FNR reactors in 1964 and, in 2003, built “a 65 MWt fast neutron reactor – the Chinese Experimental Fast Reactor (CEFR) – … near Beijing [in partnership with] Russia’s OKBM Afrikantov [and] OKB Gidropress, NIKIET and Kurchatov Institute.”

This new project is part of China’s efforts to have, according to CIAE projections, fast reactor capacity progressively increasing from 2020 to at least 200 GWe by 2050, and 1400 GWe by 2100. As noted in the opening, TerraPower’s involvement in the project is still unconfirmed, but industry and media sources seem to be coalescing around such a partnership as Gates himself recently travelled in February of this year to China to meet with “with Nur Bekri, a vice chair of China’s National Development and Reform Commission, and with China National Nuclear Corp chairman Sun Qin.”

In any event, what we are seeing here are the early stages of what looks like a new phase in nuclear technology. 4th Generation reactors – in this case, sodium FNRs – have been in development for over a decade and now we are seeing an example of one of the these new designs taking shape. Development is slow, yes, but it is happening and happening at in increasing pace in China. We can only now wait to see what comes next and, hopefully, to see confirmation that this project marks the first partnership between China and Gate’s TerraPower.

 

News Brief: China’s Nuclear Energy Developments

Last week, Mike Orcutt at MIT Technology Review wrote an update on China’s nuclear energy development plans.

China is rapidly moving up the global nuclear power leaderboard. Since 2012, as the traditional leaders in nuclear energy production have remained stagnant or backed off of their reliance on nuclear in the wake of Fukushima, China has added 11 new reactors and over 11 gigawatts of nuclear generating capacity.

As Orcutt notes, by the end of this year China is expected to pass South Korea and Russia to become the fourth largest producer of nuclear energy in the world. He links to an interesting infographic that highlights the differential in nuclear energy growth around the world.

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Image Source: MIT Technology Review

China is clearly in the lead when it comes to capacity growth, with Russia and India not far behind. However, as the infographic notes, it will be important to keep an eye on those nations that have yet to produce nuclear energy but plan to do so. As we’ve highlighted here at Future of Nuclear, those countries – and the new technologies they apply – will be interesting to watch.

News Brief: Nuclear Power Developments in Argentina

Dan Yurman’s recent article for the Energy Collective sheds new light on Argentina’s recent nuclear power developments. Yurman higlights deals for three new nuclear reactors and the the country’s new R&D program focused on the development of a 25 MWe SMR based on a PWR design.

Key facts of the three new reactors include:

  • China’s CNNC is financing two of the new reactors for a total of deal worth $13 billion USD.
  • Russia’s Rosatom is partnering for the third reactor, financing $6 billion USD.
  • Despite these financing deals, Argentina will need to seek further financing, likely from international markets
  • The Chinese reactors are a 800 MW PHWR Candu type reactor scheduled for 2016, and later a new CNNC 1100 MW Hualong One reactor. Rosatom’s reactor is a 1200 MW VVER design.

Yurman also highlights the developmend of a 25 MWe SMR by CNEA (the National Atomic Energy Commission) that is positioned “to be used to supply energy for areas with small populations or, potentially, for supplying power to desalination plants in costal areas.

Nuclear Energy in Argentina

According to World Nuclear Association’s country profile, Argentina currently has three nuclear reactors generating about one-tenth of its electricity. In 2007, per capita energy consumption was over 2600 kWh/yr. In 2012, gross electicity production included 73 TWh from gas, 30 TWh from hydroelectric, 20 TWh from oil, 3 TWh from coal, and 6.4 TWh from nuclear.

Argentina’s electicity production is largely privatised, and is regulated from ENRE (Ente Nacional Regulador de la Electricidad). Yurman, in his article on Argentina’s future nuclear energy plans, describes the three existing reactors:

the profile of installed units includes three PWHR Candu type reactors the oldest of which was built in 1974 (Atucha 1). Atucha 2, a 700 MW PHWR entered revenue service in 2014, and a third unit Embalse, a 600 MW Candu 6, was completed in 1983.

The deals with China and Russia enable a rapid shift in Argentina’s energy mix, with an increasing focus on cutting carbon emmissions. However, questions remain as to whether Argentina can afford major new nuclear infrastructure. As an April 2015 op-ed by Jason Marczak in the World Politics Review noted, Argentina is often an afterthought for investors looking to invest internationally, due to political instabilitity and the fallout from the sovereign debt default in the early 2000s.

However, with presidential elections later this year, there is renewed optimism in Argentina and, perhaps, a chance that international investors will begin to reconsider their skepticism. Renewed investment will make help to catapult the recent Chinese and Russian deals, and the local SMR development, from the early stages of today towards a brighter future.

Special Report: Nuclear Law and Liability Developments in India (Part 2 of 3)

Introduction

Last week, in Part 1 of this Special Report, we explored the history of India’s nuclear law liability regime and the passing of the 2010 Civil Liability for Nuclear Damage Act. We ended by highlighting how the 2010 Liability Act effectively drove a wedge between international suppliers and India’s nuclear industry by exposing suppliers to increased liability in the event of accidents.

Today, in Part 2, we will discuss and analyze the recent India-US agreement on nuclear trade and liability. In addition, we will canvas news reports and opinion pieces to get a sense of the reaction’s of industry experts and observers.

Part 2: The India-US Agreement

In January of this year, U.S. President Barack Obama visited India to meet with Prime Minister Narendra Modi. One of the key goals of the president’s trip was to formalize an agreement on nuclear development and liability issues.

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(Image Source: Reuters via the BBC)

As a report by Dan Roberts in The Guardian notes, the threat of tough Indian compensation laws – specifically the 2010 Liability Act – had “frustrated US hopes of an export boom in the energy sector.” As of May 2015, the details of the deal are still being finalized. However, certain baseline elements are set. As this Reuters report lays out, the deal sets a framework for the US nuclear industry to enter commercial talks with India’s nuclear operators by resolving two concerns, inspections and liability.

On the issue of liability specifically, the agreement upholds the strict liability regime and the supplier liability provisions of the 2010 Liability Act. However, to address supplier concerns, India will establish an insurance pool to cover liability up to a hard cap. The insurance pool, which would be backed by the state of India, would cover operator liability of up to 15 billion rupees (around $250 million US). Any recourse sought by the operator against a supplier could not be exceed this figure. In addition, insurance premiums for suppliers would be a fraction of the amount paid by the operator of the plants.

The Reuters report also highlights that in the event of a large scale incident, the Indian government would cover additional costs up to $420 Million (US) and, for additional funds, the report says that India would need to join the IAEA Convention on Supplementary Compensation for Nuclear Damage (CSC).

Following the India-US agreement, India has made it clear that the 2010 Liability Act will not be amended. A report from the India Express highlights the government’s position that

the foreign suppliers of the reactors cannot be sued for the damages by victims of a nuclear accident but can be held liable by the operator who has the right of recourse that could be operationalised through the contract between the operator and the supplier.

As a result, the agreement should not be viewed as a reform of India’s liability laws, but as an agreement to work within those laws by establishing an insurance pool for the operators and suppliers. In retrospect, it is clear that it was very important that India maintain its liability regime, as public and political opinion favoured increased liability for foreign suppliers following the Bhopal disaster in 1984. The agreement thus establishes a mechanism that keeps this regime in place while allowing for increased international nuclear trade.

Reactions to the Agreement and Concluding Thoughts

Reactions to the agreement have been mixed in the ensuing days and months. Partly, this is due to the fact that many of the details of the insurance pool have yet to be finalized. In an interview with Germany’s Deutsche Welle (DW), Mycle Schneider, an independent international consultant on energy and nuclear policy, shared concerns about the deal;

apparently, no specific document was signed. The Indian government reportedly announced its plan to set up a 122 million USD insurance fund to cover operators and suppliers from liabilities in case of an accident. Senior US nuclear industry officials stated they need to understand the “fine print” of the insurance. Equipment suppliers are keeping the champagne on ice, as one Indian business journal commented.

Mr. Scheinder, when asked if he expects the Indian market to become more appealing for US companies, says that “there is no real market for foreign companies in India, unless they bring their own funding. Under free market condition, it is not possible anymore to build a nuclear power plant anywhere in the world.”

A recent article on Monday by Ran Chakrabarti, an Indian lawyer, echoes similar skepticism.

It remains to be seen whether the Act and the Rules set out a balanced framework, encouraging suppliers to dip their toes into the Indian nuclear energy market, yet protecting the legitimate interests and concerns of the public in the event of a nuclear accident.

Given the complexity of nuclear development and the liability regime in India, it’s clear that this agreement will not be a panacea for all of the industry’s problems. As we’ve seen in these criticisms, and throughout India’s history, the role of foreign companies and governments in trade and development has been at times troublesome and, at other times, even disastrous.

However, India is growing at incredible rates and, as we explored in Part 1, lacks access to domestic energy resources such as coal and oil (which have driven China’s much faster economic growth). As a result, nuclear energy can help provide for a better base capacity for the country as it continues to also develop renewables such as wind and solar. In Part 3, to be published in the coming weeks, we will explore the future of nuclear in India and also focus on the ongoing finalization of the US-India agreement.

Swafford setting course for Candu in China

On February 25, 2014 SNC-Lavalin Inc. (TSX: SNC) announced the appointment of Preston Swafford to the role of Chief Nuclear Officer, President and CEO, Candu Energy. Based in Toronto and reporting to the Company’s Power Group President, Alexander (Sandy) Taylor, Mr. Swafford will be responsible for growing SNC-Lavalin’s nuclear business to meet the needs of its customers for technical services, major refurbishments and new builds across Canada and in key international markets. Mr. Swafford has impressive experience including senior positions at Tennessee Valley Authority (TVA) and Exelon, both companies are major American nuclear operators. On hearing the news industry observers wondered what course would be set by Swafford, and how applicable would his experience be with the iconic, definitively Canadian Candu heavy water reactors. Reports from a major trade show in China earlier this month, China International Nuclear Industry Exhibition, are providing an indication that Swafford is already starting to make his mark.

Candu Energy Inc. has had a rough period in recent years. Demand for new nuclear softened post Fukushima and in the wake of the financial crisis. Nations with stronger economies, such as China and India, have a burgeoning middle class that is hungry for cheap, reliable energy, and also, a need to rein in greenhouse gas (GHG) emissions for air quality, health and climate change reasons. International manufacturers have made inroads in these emerging markets with innovative new technologies, such as the four Westinghouse light water AP1000 reactors that China started building in 2008. With diminished demand, government support and privatization domestically, Candu needs to reinvent and reposition itself for the new 21st century nuclear market.

Swafford has quickly displayed that he understands the unique attributes of the Candu reactors. Some of the reactor features that made Candu a global leader when first developed decades ago are still highly relevant today. Candu reactors have demonstrated that they can use spent fuel to produce energy. Further, they can be most readily modified to use thorium as a fuel and they have superior safety features. Engineers estimate that for every four new reactors that China builds of various designs, they could and should build one Candu reactor to use the spent fuel. If China follows through on plans to build 100 new reactors in coming decades, this could potentially mean 25 new reactor sales for Candu.

Sales cycles in the nuclear industry are long. It is still early in the game for Swafford and the new Candu. One thing is certain, new innovations, partnerships and financial players are emerging. As with other technology industries, your competitor today may be your partner tomorrow. Who would have thought years ago that western companies would be selling nuclear technologies to China? Who would have thought that China, France and Russia would be involved in building and financing a new reactor in Britain? These are the times we are now in. Candu is setting a course to be a player in this new world.

Henry Vehovec
Chair, Future of Nuclear Advisory Board
President, Mindfirst Inc.

 

The Future of Nuclear Power and The Long View

Below is a comment from Future of NuclearChair Henry Vehovec on his opening remarks and in response to post-event press coverage:

“The day after Wednesday’s Future of Nuclear 2013 Conference in Toronto the Premier Kathleen Wynne and the Province of Ontario announced that new build nuclear reactors would not be pursued at this time. Articles in the press cited pricing pressure from cheap shale gas, a decline in energy demand, and increased resistance to nuclear power in the post-Fukushima world as reasons for the decision. Although there has been a recent decline in nuclear power in the global energy mix it would be premature to dismiss nuclear in the longer term.

Henry Vehovec, Chair, Future of Nuclear

Henry Vehovec, Chair, Future of Nuclear

The global mix of major energy sources evolves over decades and plays out in time frames of a century or more. The first oil well was drilled in Pennsylvania in 1859, however, it wasn’t until the development of the Model-T Ford fifty years later that oil truly took off as a major global energy source. Similarly, civilian nuclear energy started about fifty years ago and the industry now needs game changing innovation if it is to compete with shale gas and address concerns of radioactive waste, safety and proliferation.

Are there any such game changing innovations on the horizon? At the Future of Nuclear Conference we heard about several nuclear technologies that hold the paradigm shifting potential to compete with shale gas.  New nuclear technologies that are on the drawing board can burn spent fuel, are incapable of meltdown, and do not produce fissile material. We heard about fusion from General Fusion, thorium and molten salt reactors (MSR) from Terrestrial Energy, small modular reactors (SMR) from Babcock and Wilcox, portable reactors, travelling reactors, floating reactors and more. These technologies have attracted investors such as Jeff Bezos and Bill Gates as well as some of the wealthiest sovereign funds. The only problem with most of these technologies is that they require at least a decade to develop and would cost several billion dollars to produce their first prototype let alone a commercially available product. In this era of short term pressures for quarterly results in business and governments that rarely think beyond the horizon of a 4-year election term it is difficult to find jurisdictions that plan decades into the future as is required when considering energy infrastructure.

China, India, Russia and UAE are examples of countries that are taking an appropriate long view to energy planning. Not coincidentally, these are also among the countries that are proceeding aggressively with their plans to build nuclear power capabilities. China alone has 29 reactors currently under construction. Although some jurisdictions in the west do not have local demand to support new reactors it would certainly make sense to stay engaged with the industry and act as a supplier to international markets where possible. As a commodity, shale gas will not be cheap and plentiful forever.”