Nuclear’s latest comeback: is it permanent?

Over the past year, many countries in Europe and beyond have announced plans to expand their nuclear programmes or build new reactors.

As the pressure mounts for countries to start delivering on their decarbonisation goals and have a tighter grasp on their energy security, it begs the question: has “the road to net zero” become “the road to nuclear”?

In this week’s episode, Richard speaks to the Director General of the Nuclear Energy Agency about what has triggered this latest revival in nuclear, and how the private and public sectors will need to decide who takes on the financial risk of building new atomic reactors. 

Host: Richard Sverrisson - Editor-in-Chief, Montel News

Guest: William D. Magwood, IV - Director General, Nuclear Energy Agency
Christopher Eales - France Editor, Montel News

Editor: Bled Maliqi, Montel
Producer: Sarah Knowles 

Transcript

Richard Sverrisson - Editor-in-Chief, Montel News: 0:00

Hello listeners and welcome to Plugged In - the energy news podcast from Montel, where we bring you the latest news issues and changes happening in the energy sector. This week we take a deep dive into nuclear power. In the many years I've been converting the energy sector, there have been several periods which have been dubbed the nuclear renaissance. Notably the early two thousands and then the 2010s, especially in the UK. But over the past 12 months, we've seen several announcements from various European countries, notably Italy and Poland, who plan new reactors in the US, the three mile Island nuclear plants. The scene of a major nuclear accident in the late 1970s will reopen to power Microsoft data centers. In France state owned EDF has announced that it will present a plan to develop new generation nuclear power reactors by the end of the year. And big tech, Google, Microsoft Meta, Amazon is looking to small modular actors to supply their data centers and the rapidly expanding AI sector. The question is, what is powering this global revival of nuclear energy? In this episode, I'll be speaking to the director general of the Nuclear Energy Agency, but first, I'm joined by Chris Eales, our France editor and nuclear expert. A warm welcome to you, Chris.

Christopher Eales - France Editor, Montel News: 1:17

Thank you, Richard. Hello.

Richard Sverrisson - Editor-in-Chief, Montel News: 1:19

We are hearing a lot of talk in sort of recent months and over the past year about a nuclear renaissance. Is it fair, do you think, to talk about a nuclear revival in the current climate?

Christopher Eales - France Editor, Montel News: 1:30

I think it's fair to talk about anything you like, but actually building reactors is a different matter. Just ask France or Finland, for example, two countries that recently started up new reactors. After many years of trouble and difficulty and massive budget overruns. The other thing that has been driving a nuclear renaissance, if you like, or at least talk of a nuclear renaissance, is the language that we use. We hear that nuclear will actually, ironically enough a, a fuel that leaves a lot of waste behind it, radioactive waste, some of which we dunno what to do with, the planet. And I think that's been, that message has, the driven by proponents of nuclear has been fairly successful. They've been fairly successful in getting that message across, and that is helping to fuel, talk about nuclear renaissance.

Richard Sverrisson - Editor-in-Chief, Montel News: 2:22

When you mean saving the planet, Chris, you're talking about, the low carbon emissions that come from nuclear power?

Christopher Eales - France Editor, Montel News: 2:27

Yeah. Yes. That's that that, that's essentially what I'm talking about. The problem with that is of course, that you have to understand how long it takes, and that's why I talk about Finland and France. You have to understand how long does it take to build a nuclear reactor and can they do us on time? They haven't been able to do that, and they haven't been able to do us on budget, and we are in a race against time if we're talking about cutting CO2 emissions.

Richard Sverrisson - Editor-in-Chief, Montel News: 2:49

Yep. Of course the current geopolitical climate is very uncertain, very unstable and proponents of nuclear power will also talk about the fact that the fuel, the technology provides a sense of independence from unreliable suppliers. For example, a lot of gas, what do you make of that?

Christopher Eales - France Editor, Montel News: 3:07

It's, that's been another very serious driver. It's really helped this drive, political drive, if you like, for nuclear power. Because when you look at what's happened with Russian gas, then people start saying, well, look, you know, we don't want to be reliant on on outsiders. For our sources of energy. So that helps the drive for nuclear. But let's not forget that nuclear is not entirely independent. Where does uranium come from, for example? The enriched uranium that is used to fuel nuclear reactors has largely come from Russia. Actually, it's at least been a very key supplier now, even if that. Picture is changing and people are trying to companies, utilities are trying to wean off Russian supply, wean themselves from Russian supply. Those supplies are being replaced to some extent by countries like Kazakhstan, which have very closely links to Russia and other countries which don't have very friendly governments like Nigeria.

Richard Sverrisson - Editor-in-Chief, Montel News: 4:02

Chris, thanks very much for flagging those issues. Helping me, Richard Sverrisson to discuss these issues and much, much more is William D. Magwood IV, who's director General of the Nuclear Energy Agency, which is intergovernmental organization. A warm welcome to you, William.

William D. Magwood, IV - Director General, Nuclear Energy Agency: 4:20

Thank you very much. It's a pleasure to be here.

Richard Sverrisson - Editor-in-Chief, Montel News: 4:22

We've seen nuclear power. It's very much in the news. Recently we've seen several countries in Europe, uming plans and changing, maybe backtracking on earlier proposals and plans to promote nuclear power. We've seen in North America as well, many plans to tie in nuclear with, for example, AI and data centers. Is it, can we talk of, there's certainly a resurgence of interest in nuclear power. Can we talk of a nuclear renaissance or would that be too presumptive?

William D. Magwood, IV - Director General, Nuclear Energy Agency: 4:50

Oh, I don't know. That sounds like a term that historians can use after this is all done. It definitely is an upsurge in interest and I think it comes from a couple of different directions. We really started to notice the difference. The aftermath of COP 26, which was the UN conference that took place in Glasgow, Scotland, you might recall. And the difference between that cop and previous cops was in the past. Countries were encouraged to set targets to reduce their CO2 emissions in COP 26. They were encouraged to bring plans to show how they were gonna meet those targets, and I think a lot of countries discovered that their current paths were not leading towards. The reductions in CO2 that they had hoped and that really forced many countries to take a second look at how they were approaching the issue. And for some the answer clearly was to take a fresh look at nuclear power. And when you add that to the changed geopolitical situation obviously the war in Ukraine and other things have made capitals around the world much more sensitive to energy security than they were previously. And when you put those two together, you really do have this very high interest in nuclear. And this is really very broad around the world, all regions of the world, many countries big and small. And and then when I talk to them, the concern about energy security is actually at the top of the agenda.

Richard Sverrisson - Editor-in-Chief, Montel News: 6:18

We'll get to hopefully some of those issues you've raised there, William further in the podcast. But, we've seen in the oil shock of the seventies, there was a big expansion of nuclear energy in several countries, Europe and in the other side of the Atlantic. In, in the eighties and also in the, in early two thousands, there was talk of a nuclear revival. Why? Why is it different now?

William D. Magwood, IV - Director General, Nuclear Energy Agency: 6:37

I think the biggest difference is and I, this is probably more like what we saw in the seventies, a reaction to changed realities in the seventies countries. Really understood that they had to have alternatives to imported fuels. Because of the cost and that was something that was a big driver. I think maybe that's where we are now is it's a driver, the drivers that people are looking at. If you look at the nuclear renaissance of, say, the 2005 timeframe, that was really more of a push. There were a lot of the technology vendors and governments that were saying maybe it's a good idea to look at nuclear energy again. Just to hedge our bets against natural gas. I think that was largely the discussion at the time. And now I think it really is about how do we make sure that we can keep the lights on a reasonable price? How do we assure energy security? How do we really meet our commitments to reduce CO2 emissions? And then, and the answer is simply that nuclear solves a lot of those issues and it creates a driving need in many places to build nuclear Power plants. And I remember, I think it was President Bill Clinton, that basically characterized nuclear power as the energy source of last resort. Maybe we're there, maybe this is we've looked at the other alternatives and now countries have come back to the reality that nuclear power solves a lot of their problems.

Richard Sverrisson - Editor-in-Chief, Montel News: 7:58

There are obviously a lot of hurdles, a lot of obstacles here, and not least cost and financing, but I'm sure we'll get into that a bit later. But there's a lot of talk as well about small modular reactors or SMRs. Big tech is certainly interested. We've had, Google and Microsoft Meta, Amazon inking deals, are others interested as well?

William D. Magwood, IV - Director General, Nuclear Energy Agency: 8:18

Oh, absolutely. I've been traveling around the world recently. I've been in Philippines just a few weeks ago. I was in Estonia earlier this week countries that don't have nuclear power plants operating and found that they are looking at these small mod reactors very closely and in the cases of those particular countries. Small modular reactors fits their needs. Not all countries wanna build large. Gigawatt scale reactors. Their grids can't handle it. They don't want to have that large capital expenditure. Lots of different reasons. Small mod reactors fit their economy fit their needs much better than a large plant would. And so that's the option that a lot of countries are looking at. For those reasons.

Richard Sverrisson - Editor-in-Chief, Montel News: 8:59

Are we talking sort of 300 to 500 megawatts along?

William D. Magwood, IV - Director General, Nuclear Energy Agency: 9:03

So I think when we talk about small mod reactors in this current generation, it's usually 300 below.

Richard Sverrisson - Editor-in-Chief, Montel News: 9:09

Okay. 300 below. Okay. And and how, in, in terms of, the financing here. How does that, so before we get into the financing, I wanna talk a bit more about the technology. Is it there at the moment? Is it there, is it, can you just plug in and go as it were?

William D. Magwood, IV - Director General, Nuclear Energy Agency: 9:23

We're very close to it. The technology for most of the techno, most of the small mod reactors that people are looking at. Is is really right there today. Several of them are based on the same basic technology of conventional reactors. Smaller scale, different configuration, different engineering approach that makes them more flexible, safer than conventional nuclear power plants. And but so those are really Reddit. Those can, there's, there are several projects that people are talking about right now to pursue those technologies. Now and just, and to really start moving towards construction. There are other technologies which require a bit more work. I don't expect all those to show up as quickly. But you're gonna see a sort of spectrum. There'll be some technologies to be ready by to be built now or to the end of the decade. And others might take several more years. So there's a spectrum of different technologies, but some of the one, some of the key technologies I think are right here are ready to.

Richard Sverrisson - Editor-in-Chief, Montel News: 10:20

Some of those technologies that you mentioned then, William is that, you know it, if you say take a, a final in estimate decision, and then how long is it from that till the first kilowatt hours are generated? How long does it take? I mean, 'cause the problem now with, or the problem or one of the issues with very large reactors or very large units as they've been massively delayed. And we've seen that in, certainly in Finland, we've seen it in Europe, in many parts of France in the UK as well. How does that work with SMRs?

William D. Magwood, IV - Director General, Nuclear Energy Agency: 10:50

We'll see, won't we? First with big reactors. I think one reality I would highlight you look at the projects in Finland, France, UK, US. Over the last you know, 10, 15 years, and you do see these issues, the cost overrides the long schedules. That is mostly because in countries that we work with OECD countries in Europe and North America we haven't built nuclear power plants in the generation. So the supply chains, the infrastructure. The project management expertise just isn't there. And so you do run into problems. It's building a nuclear power plant to some degree is a skill like anything else. And if you don't do it for 20 years, you shouldn't expect to just walk in and start it on day one and have a perfect project. In contrast in Korea, they've been building nuclear power plants continuously for a couple of decades. And they're quite good at it. And so they were able to take those skills, move it to the United Arab Emirates, have a very successful project that came in basically in constant schedule from all accounts. So it shows that we do have to rebuild the skills and supply chains. And so we had these big projects. We went through these difficulties, and there's greater confidence that we've learned from that and we've reestablished some expertise and we'll be more successful when the next projects come. For small mod reactors, I think you're gonna be dealing with some of the same issues. Because you still need the supply chains. You still need to be able to build a large infrastructure project successfully. But I have some confidence. For example in in Canada, at Ontario Power Generation they're gonna build what will probably be the first of this generation of small module reactors. It's a four unit. Project that they are pursuing. But they have recently in Canada performed a lot of major refurbishments to their existing reactors. Big projects. So that's built in expertise in supply chain in Canada that's now gonna be used for these small module reactors. So that's a very good situation to show that when you have all the right parts in place, you've got a regulator that understands big projects. You've got supply chain in place, you've got people who've run big projects that your ability to implement these SMRs correctly will be much higher. And then we can go from there. I think our confidence level's growing.

Richard Sverrisson - Editor-in-Chief, Montel News: 13:09

Excellent. And how, in, in terms of the timescale here, from making the final decision to actually producing electricity how long are we talking?

William D. Magwood, IV - Director General, Nuclear Energy Agency: 13:17

It depends on, lots of, depends on your processes in particular countries. You, I always, I often tell people that anything in nuclear usually takes about a decade. And when you go from first concept to saying, we wanna do this, to going through all the regulatory approvals and getting all the siding done it's probably of that order. But the actual construction of an SMR probably ultimately will be more like three years or so. Depending on the technology.

Richard Sverrisson - Editor-in-Chief, Montel News: 13:41

Yeah, no, that, that's very interesting indeed. So you could actually scale it up and, have it at several different sites. The same kind of technology the same issues. But obviously in Europe we're constrained a lot by, well by, by local conditions. It's a very more, much more densely populated area. There's a lot more instance of planning, permit permitting, et cetera, et cetera. Are those hurdles that are also, quite diff more difficult to overcome in some parts of the world than others.

William D. Magwood, IV - Director General, Nuclear Energy Agency: 14:08

Probably to some degree, although I would expect that the first wave of plants will be built largely in existing nuclear sites sites that already have transmission access and already have some communities that are experienced with hosting nuclear facilities. I think those will be the first that you see. And then after that, you start looking at the different sites and in the countries that they have that don't have nuclear that's gonna be a very important discussion with their stakeholders. You know, to go through a process of selection that's done in a very transparent and fair way to make sure that, the people who are interested in having a nuclear power plant as that they can host will have those opportunities.

Richard Sverrisson - Editor-in-Chief, Montel News: 14:49

And a key area will be, of course, in the future, is how well these units can coexist with renewables based grid. How can they can they ramp up and down quickly enough? Are they flexible enough and is a. A sense that SMRs are more flexible than the larger units have been so far because, some countries use modulation, some, different ways of following load, but also following supply is also gonna be much, much more important. And where do SMRs stand here, William?

William D. Magwood, IV - Director General, Nuclear Energy Agency: 15:15

Yeah. As I talk to the SMR developers, all of them recognize there's a need to be more flexible to be able to ramp up and down very quickly. There's actually some good experience in different countries with ramping up and down the existing nuclear power plants. But the SMRs are going to be built with this in mind, so they'll be really designed to be compatible with a, with the modern electricity system. And I, I can tell you, the economic analysis that we have done at the NEA really verifies over and over again that nuclear actually helps large scale renewables work better. It provides for more reliability, it provides for a stable grid. It moderates the prices. Really the whole system works better if you have a combination of nuclear renewables.

Richard Sverrisson - Editor-in-Chief, Montel News: 16:00

That's very interesting. Can you give some examples of that? William?

William D. Magwood, IV - Director General, Nuclear Energy Agency: 16:03

We did we did an analysis on behalf of the government of Sweden a couple of years ago. So you can, we can share that reports on our website and it really showed quite. Significantly that Sweden, despite the fact it has a lot of advantages, a lot of interconnection with the rest of Europe large hydroelectric capacity benefited tremendously from having even one nuclear power plant in operation. And as they reached. As they strive to reduce their CO2 emissions not just renewables, but nuclear on top really made a big difference in the overall cost of achieving that. So it's a really particular example. I think we will see some others coming up as well. We're doing other such analysis.

Richard Sverrisson - Editor-in-Chief, Montel News: 16:45

Perfect. If we return back to SMRs or small modular reactors, you, we've seen plenty of memorandum of understanding, Memor and I or understanding being signed, but not many final investment decisions or or very few companies that actually committed the funding. Do you expect to see more of that going forward?

William D. Magwood, IV - Director General, Nuclear Energy Agency: 17:02

Yes. I do. I've talked with with government, so going through their processes now. They are making the initial investments. We're seeing that that money is really flowing. And even from some of these high tech companies that you've mentioned earlier, that they're really starting to to move down the pet decision path. And I think it's important that to note that for many of these companies, whether they're large chemical companies or IT companies their interest isn't nuclear. They don't care about nuclear. They want. Reliable, cost-effective energy. And if nuclear can deliver it, there'll be a decision point where they'll be investing to make that happen. If they, if the nuclear vendors can't make that happen, they'll move on to another source. So that's why you're seeing this sort of louse and these sort of step-by-step approaches because, again, these aren't companies that are interested in nuclear, they're interested in the energy. And they'll make a decision at the right time.

Richard Sverrisson - Editor-in-Chief, Montel News: 17:58

And they're also interested in base load electricity as well. A lot of them as well. I presume.

William D. Magwood, IV - Director General, Nuclear Energy Agency: 18:01

Whether the term base load is has a lot of a lot of weight to it. I would just say reliable. Reliable. Yeah. Fair enough. Continuous electricity, 24 hours a day, seven days a week, 365 days a year. That's what they want. And it's not just continuous, but also very high quality. And that's very important to a lot of these these companies.

Richard Sverrisson - Editor-in-Chief, Montel News: 18:23

I think, when we're talking about costs here I'd like to then move on to to financing of nuclear plants. William. So we've seen in, you mentioned yourself in certain big projects in Europe, there was a huge cost overruns. And nuclear power, i is not cheap. It could be reliable. Reliable supplier. How can it be funding? What are the best options to, for those. Countries or companies even you know what is the best solution here in terms of funding? Is it because, obviously does it require state subsidies or what, what does it need? What does that rollout of nuclear power require in terms of funding?

William D. Magwood, IV - Director General, Nuclear Energy Agency: 18:56

Yeah. Very important question. It's one we spend a lot of time working with our member countries to, to deal with. I think the first thing I would say is we have to implement the projects more effectively. We can't have these. Large cost overruns and these large blown schedules, we can't have that in the future. That just cannot be the standard we have to be better as a sector. And I think the industry realizes that. So that's the first thing. The second thing I would say is that for the first plants there are gonna be so much, there's gonna be so much risk and uncertainty in the projects. That there probably is going to have to be, in most cases, some kind of governmental backstop just to deal with the risk. I don't know that the private sector is prepared to take on those project risks alone. There's probably gonna have to be loan guarantees or some other mechanism to try to moderate those risks. But I think after the first wave you can start to see that. Disappear and see that once the projects are show that particular design can be built cost effectively, then you can characterize the risk, you characterize the project cost more effectively, and then you can go forward on a more private sector basis. But I think those initial projects might be challenging for the private sector. And we certainly have seen examples in recent years where the private sector tried to assume these risks for first of the kind projects and really. Had a difficult time. We certainly, we've seen bankruptcies in the past. So I do think that the industry will need some help in many cases. And I also believe that that for countries in the global south, they're going to need some help from the international financial institutions. And many of them right now are not supporting nuclear projects. That has to change. I think everyone recognizes that, and I think it will change.

Richard Sverrisson - Editor-in-Chief, Montel News: 20:44

Yeah, and we had, statements from the, some of the biggest financial institutions in the world saying that nuclear power needs to triple by 2050 as well. So hopefully they'll get on board as well and provide some of that financing there. But their money where their mouth is, if you like. But yeah, I think, you know, so when you talk about the sort of governmental backstop, are we talking feed in tariffs? Are we talking CFDs there? Lots of different options where that could be done either there. William, could you talk us through some of those?

William D. Magwood, IV - Director General, Nuclear Energy Agency: 21:09

Yeah, no there's a, there, there's a wide range of options. We've characterized those very carefully. I think it really will depend on a, on. What works in each country. I think every country will have a different approach. Contracted difference is certainly one that that can make a difference, but there's other, right, other mechanisms as well. I think one thing that we have observed is that we're going to have to be more sophisticated on how we allocate risk in these projects because there's different risks. Types for different players and some of them should be managed by the private sector and they should be allocated to the private sector. But there's some risks, like for example, regulatory risks. It really is difficult to be managed by the private sector. So maybe that's where the government's come in. So I think there's gonna be a more sophisticated approach where we divide the risk up into different. Batches and then assign those risks to different players. And sometimes it'll be the owners, sometimes it'll be the vendors, sometimes it'll be the government. But I think that's gonna be necessary to really look at it that way. And for, and I think each situation might be different. And a lot will depend on what kind of technology and what kind of design is built. So we'll see. I think you're gonna see different things all across the world. I don't think you're gonna see a one size fits all.

Richard Sverrisson - Editor-in-Chief, Montel News: 22:21

Absolutely. And certainly these kind of contracts will be incredibly complex as well. Taking on board all that risk. I think that's gonna be the part of the deal there. Absolutely will. I think that, that's fascinating. But in terms of, something also we've been looking at mono News is looking at the supply of uranium. Is that diversified enough, for, to, to cover a potential new nuclear age? Is there enough there from reliable safe countries?

William D. Magwood, IV - Director General, Nuclear Energy Agency: 22:46

Well, it very interesting because people bring this up quite often these days and what is that, nuclear fuel is actually comprised of several components. Uranium, it's mined out of the ground and then processed to to material called uranium hexa fluorides that can be fed into what we call enrichment facilities. And after enrichment, it then goes on to fuel fabrication. When it comes to the actual uranium, there's a lot of uranium out there. We're pretty confident that there's more than enough uranium. In fact, we have an analysis that comes that we do in cooperation with the International Atomic Energy agency that comes out periodically. And the new one is just about to go out, just signed off on it today actually. We call it a red book. And the red book will show that there's a lot of rain. So uranium places like Canada, Australia. Kazakhstan, there's many places Africa and I was in Mongolia not long ago, and Mongolia has found that they have large deposits, so there's gonna be a lot of uranium. But the complex part is that there isn't there isn't enough enrichment capacity today. For what we're talking about. And that is where I think big investments are gonna be made. We need to increase capacity in Europe and in North America in particular to meet the needs for the near intermediate term future. And the governments are encouraging that to happen. And I think it is happening today, and I think it will continue to expand as we go forward. But right now, today, that is a constraint. But we're, but I think people are working on it.

Richard Sverrisson - Editor-in-Chief, Montel News: 24:18

I think the sort of final area I wanna touch upon is the issue of security. William, I think you mentioned security supply, and that's one of the major triggers for new for the sort of, if you like the revile of interest in nuclear power as providing that you know, or moving away from a dependency on fossil fuels and on a focus on security of supply. But in terms of these units, we've seen, attacks on infrastructure, energy, infrastructure. I'm talking focusing mainly on Europe here. But and there is a lot of nervousness of a concern about energy infrastructure and obviously if, there were to be a cyber or hybrid or some kind of physical attack on one of these units, it could be have quite disastrous consequences. How is the industry looking at this and providing these kind of precautions or the safeguards in place to, to avoid such situations?

William D. Magwood, IV - Director General, Nuclear Energy Agency: 25:11

Yeah, it real, it really is a new world, isn't it, where we have this kind of conversation. Certainly in the aftermath of the terrorist attacks in nine 11 which is now almost 25 years ago, it's hard to imagine the nuclear industry had to understand that. Nuclear power plants could be a target. And existing plants were hardened in ways that were unimaginable before those terrorist attacks. And as these new technologies have come to the fore, the consideration of potential attacks on these facilities has been a big part of what is necessary for them to reach regulatory approval. Even a lot of the large plants are being built to withstand attacks of one type or another. In the case of small mod reactors, in addition to being designed with the possibility of attack in mind. Most of them are actually built subsurface. In part because of that not for reasons of, because of either ease of building or technology. It's because of security. They're being built below grade to make them less vulnerable to potential attacks. So it is a consideration. I think the industry has responded very well to it and is doing the best it can. But at the end of the day, this does reach beyond what. A nuclear power plant builder operator can be d can address. It has, national security is is a larger issue, but it's, it is certainly something that's the con conversation point around the world today.

Richard Sverrisson - Editor-in-Chief, Montel News: 26:37

Absolutely. It's one of the major concerns in this new geopolitical reality that we're facing that seems to be almost changing on a daily basis. But William, thank you very much for all your insights and a very a fascinating conversation. And again, thank you for being a guest on the Plugged In - Montel News Podcast.

William D. Magwood, IV - Director General, Nuclear Energy Agency: 26:54

Very much my pleasure. Thank you very much.

Richard Sverrisson - Editor-in-Chief, Montel News: 26:56

It's been an excellent and insightful discussion. I hope you agree, listeners, and thank you for tuning in to this episode. Our podcast episodes are released every Friday. For the latest news from Montel, please visit montelnews.com and you can follow us on LinkedIn, Blue Sky, and other social media channels. See you next time.