Energy Transition Handbook - Flipbook - Page 47
46
Hogan Lovells
47
Energy Transition Handbook 2022
Large Fission, SMRs/Advanced Reactors,
and Fusion
At this critical juncture in the fight against climate change, nuclear energy — conventional
power plants and advanced reactors — is increasingly acknowledged across the political
spectrum as an important component of the global energy portfolio, as it boasts safe, reliable,
zero-carbon power and many other benefits. It is also one of the largest sources of carbonfree power in the world, second only to hydro power. This source of energy is also important
to energy security and grid reliability. Nuclear can offer a complementary source of energy to
intermittent renewables such as wind and solar, and provides reliable base-load power that is
relatively unaffected by extreme weather phenomena that are becoming increasingly frequent
and violent.
Some 440 nuclear reactors are operating in
32 countries with about 55 reactors under
construction in 19 countries. There are also nearly
150 small modular reactors (SMRs)/advanced
reactor projects under development, using
cutting-edge technologies and capabilities that
range from tiny (less than one megawatt) to large
(over a thousand megawatts). Nuclear reactors
do not produce carbon or other greenhouse
gases. Nuclear fusion also appears on the brink
of commercialization, backed by significant recent
technical advances and large private capital
investments. On the back end, more than 180
commercial and prototype reactors and over 500
research reactors retired and are at varying levels
of decommissioning.
A number of new fission and fusion activities are
underway around the globe, such as:
• T
he U.S. has the largest nuclear power program
in the world, with some 93 reactors providing
about 20 percent of the country’s power, and
over 50 percent of its carbon-free power. A
number of existing plants have experienced
economic downturn as they are not credited
for their carbon free power, but the American
Nuclear Infrastructure Act, passed near the end
of 2021, contained $6 billion in credits to help
keep plants open and preserve their carbonfree power. The U.S. also continues to enjoy
a surge of SMR/advanced reactor activities,
with 10 reactor developers winning awards
from the U.S. Department of Energy under the
Advanced Reactor Demonstration Program
(ARDP) to support commercial deployment
of their technologies, with two developers —
TerraPower and X-energy — receiving ARDP
awards of over $1 billion dollars each to deploy
commercial facilities in the 2028 timeframe.
The U.S. Nuclear Regulatory Commission
(US NRC) approved an SMR design for the
first time, the NuScale reactor design, with its
first expected US customer planning to submit
an application to the NRC to construct and
operate the plant in the near future. Several
other applications are, or will soon be, under
review by the NRC.
• I n the United Kingdom, British Prime Minister
Boris Johnson’s Energy Security Strategy
aims to construct up to eight new nuclear
reactors (roughly one per year), plus SMRs,
and a government whitepaper demonstrates
the intent to tackle climate change with both
large and small scale nuclear. Rolls-Royce is
also working to build 16 SMR plants in the UK
within 10 years.
• A
number of European countries are planning
to deploy new reactors, with particular interest
in Eastern Europe — e.g., Poland, Romania,
Czech Republic, Hungary, and Ukraine —
for reasons of energy security and to replace
retiring coal plants. Countries like Finland
and France also plan to build additional nuclear
power plants domestically. Shortly before
Russia’s invasion of Ukraine, France, which
already gets roughly 70 percent of its power
from nuclear energy (the largest percentage
in the world), announced plans for a so-called
nuclear renaissance, including construction of
up to 14 new reactors in France and continued
development of SMRs.
• C
hina is moving ahead on nuclear and aims to
be a competitor in the global nuclear market.
It currently has 53 operable nuclear reactors
and 19 under construction domestically. Its
recent construction of four Hualong One
reactors is the first nuclear plant project in
the country to use private funding. In late
2021, China also connected its first advanced
reactor to the grid.
• C
anada’s SMR Action Plan promotes advanced
nuclear to help achieve a zero-emission
economy by 2050, and the Canadian nuclear
regulator is reviewing 10 advanced reactor
design applications, with two more under
development. Additionally, Ontario Power
Generation selected GE Hitachi to partner
on deployment of a BWRX-300 SMR at the
Darlington site in Ontario by as early as 2028.
ussia has 37 operable reactors and 3 under
• R
construction domestically, 20 reactors
confirmed or planned for export construction,
and a stated book of business for nuclear
construction projects at well over $130 billion,
although some orders are being cancelled in
light of recent world events (e.g., Finland’s
decision to cancel a planned Russian nuclear
power plant). Russia developed the first
modern floating SMR technology, and is paving
the way for fast reactors through its Proryv
Project where fuel is recycled to reduce
nuclear waste.
• R
oughly 30 countries across the Middle East,
Africa, Central and South America, Europe, and
Southeast Asia are considering or beginning
new nuclear power programs.
decade,
and the UK government issued a
white paper outlining its fusion development
strategy. Both the US and UK regulators
are evaluating the appropriate regulatory
framework for fusion.
Key issues:
•
While
carbon-free, nuclear can sometimes
struggle to be recognized as ‘green’, especially
by the investment community, although this
is slowly starting to change.
•
Traditional
large scale nuclear has had large
capex requirements, meaning that fewer
owners are able to finance projects on
balance sheet, and projects are rarely able
to be financed using debt without some form
of underwriting from a government entity.
•
Advanced
reactors are generally expected to
be smaller and simpler, but this is subject to
confirmation once first-of-a-kind projects are
built, usually with significant government
support. Advanced reactors are also seen as
having more flexible uses, including non-power
uses such as water desalination and processing
heat for industrial use.
•
Complex
and lengthy permitting and licensing
regimes.
•
solution to spent fuel disposal in many
No
countries.
•
Political
sensitivity and public opposition in
certain countries – for example, the requirement for all German nuclear power stations
to cease operation. However, others such as
France have taken a very different position
and aim to expand nuclear.
n the fusion front, there have been a number
• O
of exciting recent achievements in fusion
•
energy, from start-ups to global collaborations.
Examples include Helion Energy in Washington
state, which received a $2.2 billion private
capital investment and made significant
technical advancements, including reaching
100 million degrees Celsius last year.
Commonwealth Fusion in Massachusetts just
raised $1.8 billion and achieved a significant
magnet advancement to form the most powerful
magnetic field of its kind ever created on Earth.
Canadian company General Fusion expects to
demonstrate its technology through a UK plant
it will build and operate by 2025. To support
these ventures, the White House recently held a
Fusion Summit for development of commercial
fusion within the
Fusion
still has significant technological
hurdles to overcome and faces uncertain
regulatory frameworks that can significantly
impact construction costs and schedules.
