Greetings!
In this week’s issue, we examine three major nuclear nexus issues that require intensive focus in 2024. We spotlight NuScale’s reduction of its workforce and the problems facing other U.S. nuclear companies. Finally, we highlight key nuclear technology, security, and geopolitical developments, reports, and analyses.
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Nuclear Nexus Challenges for the Coming Year |
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The decision by 25 nations at the COP28 international climate conference to support the tripling of nuclear energy by 2050 was a major milestone in the recognition of reality about how global zero-carbon energy will be achieved.
This is a big aspiration and probably an unattainable objective. One analysis notes that this goal will require building “the equivalent of about 50 large nuclear power reactors per year until 2050.” But its ambitious scale should drive an evolution in how nuclear power is effectively commercially deployed.
Among the numerous issues that need attention, there are three critical areas that will require an evolution of thinking and policy in the coming year:
1. Winning the geopolitical competition for reactor exports.
2. Preparing the international market for smaller reactors.
3. Constructing an effective policy framework for nuclear energy’s expansion.
Geopolitics
The U.S. faces a dual competition in the large and small nuclear reactor export arena. One battle is with its adversaries in Russia and China. The other is with its allies in South Korea and Europe.
The challenges from Russia and China are well characterized.
Current nuclear reactor exports are dominated by Russia. Its large-scale reactors are under construction in Egypt, Turkey, China, India, Bangladesh, Belarus, and Hungary. Russia’s major state-owned nuclear company, Rosatom, had over $10 billion in sales overseas in 2022.
Current reactor building is dominated by China, which has over 20 plants under construction and is planning to build 150 more by mid-century.
Both countries financially underwrite their nuclear industries, have hot production lines, and support sophisticated workforce education and development systems. They also identify nuclear power as a geopolitical and energy asset and are actively cultivating energy export markets in the developing economy world.
The challenge from America’s allies is different. It revolves around intense commercial competition for new nuclear business without the same, deep level of governmental support. There has been a glaring inability of the governments and major companies to understand how they can and need to work together to overcome the structural advantages enjoyed by Russia and China. The failure to outmaneuver Russia and China in this competition will have significant international and energy security implications for the remainder of this century.
The U.S., over the past seven years, has done a good job of hip checking Russia and China out of key European markets, most prominently the Czech Republic and Romania. The U.K. and Finland also have terminated reactors deals with China and Russia respectively because of concerns about energy security and interference.
The American Bipartisan Infrastructure Deal and the Inflation Reduction Act have provided a significant funding boost for existing and new-design nuclear plants.
Further, the U.S. is actively working to eliminate its dependence on Russian nuclear fuel, which has been described by the Biden administration as “gravely concerning”. While there is no active remedy for Russian fuel imports for existing reactors, the U.S. has put resources into restarting its uranium enrichment capability for next-gen reactors. This has produced the first kilograms of HALEU fuel outside of Russia and has the U.K. following the American lead in this area.
But the question is whether these individual actions add up to the cohesive strategy that is needed to win a global nuclear market that may not triple in size over the next 25 years, but certainly will expand.
Market Development
The necessity of a cohesive strategy is illustrated by the increasingly complicated competition for international nuclear export share.
The large reactor competition is centered on Eastern Europe and The Middle East. These markets are well characterized and present a specific set of opportunities and challenges that established reactor vendors and governments understand.
What is not well understood is the emerging economy nation market for scaled down reactors like SMRs and advanced technologies. These next-gen technologies are under development in western countries, but some already have been deployed in Russia and China.
A new Nuclear Business Platform report illustrates some of the new challenges for western nuclear export to new nuclear nations.
This analysis identifies Ghana, Uganda, Nigeria, and Zambia as four African nations in the “Tier 1” category of nations “firmly committed” to starting nuclear power programs. Egypt and South Africa also were on that list, but South Africa already operates a nuclear power facility and Egypt is currently building one.
Ghana is of particular interest to western reactor exporters. The U.S. has signed a memorandum of understanding on civil nuclear cooperation with the government. The country also is a partner in the State Department’s FIRST program and the U.S. has committed $1.75 million to create a Ghana-based SMR regional training hub for sub-Saharan Africa. Japan has joined in to support technical and regulatory assessments in the country under the WECAN initiative. And the first-ever pan-African U.S.-Africa Nuclear Energy Summit was held in Accra in November.
But despite all that useful activity, as of November, Ghana along with Zambia, are countries to which the U.S. EXIM bank will not provide any support. It is unlikely that any U.S. nuclear supplier will be able to export a reactor to either country without EXIM support. So, there seems to be a disconnect in the nuclear export ecosystem.
In general, the financing, strategy, and tempo of U.S. and allied nation cultivation and preparation of new nations actively seeking nuclear power is insufficient for the opportunity. There are numerous structural and financial reasons for this. But in the meantime, China has a clear advantage under the Belt and Road initiative in the development of energy and infrastructure relationships with many of these markets. And Russia has set its sights on Africa as a prime nuclear export target.
Policy Framework
The notional timeframe for the deployment of next-generation nuclear energy is roughly 10-15 years. Because of the novel aspects of many of these reactor designs and fuel cycles a new framework for the management of these technologies is going to be required.
Chief among these is the need to evolve the regulatory regime to reflect the differences between advanced and conventional reactors. Regulatory evolution is occurring as is cooperation on standards across borders. So, while critics have pounced on the slowness of this transition, the hope is that an effective new system can be developed and internationally propagated.
The Achilles Heel of all nuclear projects traditionally has been cost and schedule.
These double dangers are clearly evidenced in the problems encountered by the SMR company, NuScale. Some of its competitors have also faced similar problems in recent months. If this situation persists it likely will present a major competitiveness headwind to next-gen reactor deployment. The question is whether governments and industry can find more effective ways than pure market approaches to minimize or limit these challenges to facilitate deployment.
The competitiveness challenges also are exacerbated by the fact that OECD nuclear exporting nations are subject to requirements that are more stringent than those followed by Russia and China. In the current environment, these limits are probably outdated. The restrictions on producing a “package deal” with government guarantees that are more attractive than Russian or Chinese offerings to new nations considering nuclear units is a millstone.
The other prominent policy issues that need attention are nuclear non-proliferation, nuclear security, and spent fuel management. The objective here is to adapt international guidelines to the new technologies so that nuclear weapons cannot be developed, and the reactors are protected from nuclear terrorism. This process is underway, but it lacks prioritization.
The role of nuclear energy was a major theme at the Dubai climate confab. The central commitment to triple nuclear power in 25 years was a milestone. But its roster of supporters did not include Russia or China. Maybe those nations believe they already have an effective plan for how to control the future international nuclear market. If so, a better strategy needs to be created by western nations and they will need to evolve their thinking and policies to get there.
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Ken Luongo, President, Partnership for Global Security |
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Spotlight
NuScale Power announced that it is reducing its workforce by about 28% in an effort to save $50-60 million a year and reposition to company from reactor development to commercialization. The company possesses the only SMR approved by the Nuclear Regulatory Commission. Its 6-reactor Carbon Free Power Project deal with the Utah Associated Municipal Power Systems (UAMPS) was terminated last November as costs escalated. In its latest quarterly earnings report, NuScale had under $200 million in cash reserves. Other U.S. nuclear companies are facing similar headwinds. X-energy cut 150 employees from its workforce and scrapped a $2 billion plan to go public. California-based Oklo failed to finalize a deal with the Department of Defense to build its microreactor at an Air Force base in Alaska. These developments argue for a sharpening and evolution of the U.S. strategy if it is to lead in next-gen reactor deployment.
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The Impact of the Ukraine Invasion on Nuclear Affairs and Exports |
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The International Atomic Energy Agency (IAEA) has reported that Russia is obstructing access to specific areas of the Ukrainian Zaporizhzhia nuclear power plant it occupies, according to the agency's director general, Rafael Mariano Grossi. Russia's denial of IAEA inspectors' access to reactors one, two, and six at the Zaporizhzhia nuclear power plant, coupled with the lack of provision of 2024 maintenance plans for the facility under Russian control, raises serious concerns about the safety and security of Europe's largest nuclear power plant, despite warnings of potential catastrophic consequences.
Russia has reportedly completed the deployment of tactical nuclear weapons in Belarus. This deployment follows Belarus' constitutional amendment removing its commitment to remain free of nuclear weapons, with President Alexander Lukashenko confirming the nuclear transfers and equipping Belarusian aircraft for such capabilities. The move has implications not only for the immediate conflict in Ukraine but is also interpreted as an attempt by President Vladimir Putin to intimidate NATO and influence its military support for Ukraine.
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French energy utility Électricité de France (EDF) plans to invest a further £1.3 billion in its British nuclear fleet up to 2026, with EDF planning to extend the life of four nuclear power stations in the United Kingdom. The French company said it would decide on whether to extend the life of four plants with advanced gas-cooled reactors (AGR) by the end of the year. EDF is also looking into running the Sizewell B plant for 20 years longer than currently scheduled. The output of EDF’s British nuclear fleet was 37.3 terawatt hours (TWh) in 2023, 15% lower than the year before because of station closures and statutory outages.
British company Lloyd's Register and Zodiac Maritime signed a memorandum of understanding with South Korea's Kepco Engineering & Construction and HD Korea Shipbuilding & Offshore Engineering (KSOE) to advance the development of nuclear-powered cargo ships. In this collaboration, HD KSOE and Kepco E&C are designing nuclear-propelled vessels, while Lloyd's Register assesses rule requirements for safe operation and regulatory compliance to address challenges in adapting terrestrial nuclear technology. Amid the shipping industry's commitment to achieving net-zero emissions by 2050, this collaboration represents a notable trend in the maritime sector.
China reportedly sent a proposal to Kazakhstan for the construction of the nation’s first nuclear power plant, but concerns have been raised about the quality of the reactor. The model offered by China was half the price of alternatives from France, Russia, and South Korea. Apprehensions have been expressed regarding the Chinese design's incorporation of outdated technology, although the Chinese design is compatible with domestically produced fuel assemblies. China's active pursuit of nuclear projects in Central Asia has raised questions that underscore the challenging balance between cost considerations and technological reliability.
India has signed agreements with Russia for the construction of future units at the Kudankulam Nuclear Power Project in Tamil Nadu. These agreements signify a continuation of the collaborative effort between India and Russia, marking a milestone in the development of Kudankulam project which began construction nearly two decades ago. This development underscores the strategic partnership between India and Russia in the nuclear energy sector and highlights India's commitment to nuclear energy as part of its energy mix and infrastructure development program.
The IAEA conducted its Integrated Review Service for Radioactive Waste and Spent Fuel Management, Decommissioning, and Remediation (Artemis) mission to Belgium’s Doel and Tihange nuclear power plants. The mission found that Belgium has a robust national infrastructure for the management of radioactive waste and used fuel. The IAEA also recommended that Belgium develop consolidated policies for specific waste streams and for decision-making on a geological repository.
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Nuclear Policy, Governance, and Geopolitics |
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The British government has launched a roadmap for achieving its ambition of operating 24 gigawatts electrical (GWe) of nuclear generating capacity by 2050. This would represent about 25% of the country’s projected electricity demand. The Civil Nuclear Roadmap outlines plans for the biggest expansion of nuclear power in 70 years, including exploring building a major new power station and investing in advanced nuclear fuel production. Nuclear power’s current share of electricity in the United Kingdom is about 16%. All but one of its existing reactors are due to retire by 2030.
The United Kingdom government announced it will invest £300 million ($381 million) to launch a high-assay low-enriched uranium (HALEU) program, making it the first country in Europe to develop the fuel necessary for next-gen smaller reactors. The U.K. Department for Energy Security and Net Zero (DESNZ) said the investment will support domestic production of HALEU and is part of plans to help deliver up to 24 GW of nuclear power by 2050. In addition, the government said £10 million will be provided to develop the skills and sites to produce other advanced nuclear fuels in the United Kingdom.
The President of Poland’s National Atomic Energy (PAA) stated that NuScale Power’s NPM-20 small modular reactor is compliant with Polish nuclear safety and radiological protection standards. PAA President Andrzej Głowacki published his opinion concluding that the assumptions adopted in the design of NuScale’s technology are correct and meet the requirements of Poland’s Atomic Law and selected regulations on the safety of nuclear facilities. In July 2023, Polish copper and silver producer KGHM Polska Miedz received approval from the Poland’s Ministry of Climate and Environment to build a power plant based on NuScale’s SMR technology.
Polish electricity operator Polskie Sieci Elektroenergetyczne (PSE) published its latest list of companies that have applied for a connection to the national grid, with nuclear operator Polskie Elektrownie Jadrowe (PEJ) receiving the conditions for the connection to the grid of its nuclear power plant. The next stage in the process is the conclusion of a connection agreement between PSE and PEJ, with the date of the agreement and the connection of the power plant yet to be determined. PEJ has been working on building Poland’s first nuclear power plant at the Lubiatowo-Kopalino site, with the aim for the reactor to enter commercial operation in 2033.
French Energy Minister Agnes Pannier-Runacher said that France is set to build eight new nuclear plants on top of the six plants already announced. A draft law set to be presented soon proposes the additional power plants and recognizes that France will need nuclear power beyond the six European Pressurized Reactors (EPR) currently planned. This is a drastic reversal from previous French policy that sought to reduce dependence on nuclear energy. France aims to reduce fossil fuels’ share of energy use to 40% in 2035, which would require the further construction equivalent to 13 gigawatts of energy.
Spain’s government confirmed plans to close the country’s nuclear power plants by 2035 as it presented its energy measures, which included extended deadlines for renewable projects and adjusted renewable auctions. The management of radioactive waste and dismantling of the plants is projected to cost about $22.4 billion and will be paid for by a fund supported by the plants’ operators. The shutdown and dismantlement process of Spain’s nuclear power plants will begin in 2027.
South Africa’s government released a planning document for public comment detailing that the country needs a massive power plant construction program to ensure adequate electricity supply up to 2050. The latest iteration of the government’s Integrated Resource Plan (IRP) analyzed different options to close the power shortfall over the period from 2031 to 2050, with the IRP stating that some ways to ensure security of supply include different combinations of nuclear power, renewables, and natural gas. South Africa has suffered power cuts for more than a decade, reaching record levels and persisting for up to 10 hours a day last year.
China’s State Council approved the construction of two Hualong One reactors at both the Taipiningling and Jinqimen nuclear power plant sites. China National Nuclear Corporation (CNNC) also announced construction milestones for the Changjiang, Zhangzhou, and Sanmen Nuclear Power Plants. The Taipingling plant will eventually host six Hualong One reactors, with units 1 and 2 expected to start up in 2025 and 2026 respectively.
South Korean defense minister Shin Won-sik stated that a light-water reactor at North Korea’s main nuclear complex at Yongbyon will likely be formally operational by next summer amid suspicions that North Korea may use it as a new source of fissile materials for nuclear weapons. The IAEA and foreign experts said they’ve detected signs indicating that North Korea had begun operating the reactor.
Following the 7.6 magnitude earthquake and multiple aftershocks that struck the Noto peninsula in Japan, Chief Cabinet Secretary Yoshimasa Hayashi said there were no abnormalities at the Shika Nuclear Power Plant in Ishikawa Prefecture. According to the Nuclear Regulation Authority, there are also no signs of issues at the Mihama and Takahama Nuclear Power Plants in Fukui Prefecture or at the Kashiwazaki Kariwa Nuclear Power Plant in Niigata Prefecture. However, there were reports that the seawater level at the Shika plant’s intake was three meters higher than usual after the earthquake.
The Estonian government’s Nuclear Energy Working Group concluded that including nuclear energy to the country would help it meet its climate goals and increase energy security, with small modular reactors deemed to be the most suitable for the country. The conclusion of the group’s 2 ½ year study has been published as part of Estonia’s process of following the IAEA’s roadmap for nuclear newcomer countries. Estonia is looking at nuclear power as a reliable and low carbon option to diversify its energy mix by 2035 when the country plans to phase-out domestic oil shale.
Indian Prime Minister Narendra Modi dedicated the Demonstration Fast Reactor Fuel Reprocessing Plant (DFRP) at the Indira Gandhi Centre for Atomic Research (IGCAR). The DFRP is a precursor to future large-scale plants for the reprocessing of fast reactor fuel. Fast reactors are part of India’s vision for a closed nuclear fuel cycle which will make use of the country’s abundant reserves of thorium.
China unveiled a new national company and formed a broad coalition of industrial giants to advance research in nuclear fusion technology. The group will be led by China National Nuclear Corporation (CNNC) and comprises 25 central government-owned enterprises and research institutes. The consortium is being launched with the goal of targeting nuclear fusion development through high-temperature superconductors, large-capacity energy storage, and tritium production.
Japan will launch an umbrella organization for the nascent fusion power industry this March, tentatively named the Fusion Energy Forum. The organization will bring together engineering companies and startups, academia, and government officials to develop technology and sales channels for fusion commercialization, with the aim of working out the industry’s technological needs and speed up development. The group will also make recommendations to the government about safety rules and technological standards.
Unit 2 of the Shin Hanul Nuclear Power Plant has begun supplying its first electricity to the Korean electric grid, meaning the connection of electricity generated at the power plant to the transmission line. After major tests at each output stage, Shin Hanul 2 is scheduled to begin full-scale commercial operation in the first half of 2024. Shin Hanul 2 is the second of two APR-1400 reactors at the site, with a further two APR-1400 units planned for future construction.
Russian President Vladimir Putin inaugurated two new nuclear-powered submarines, Krasnoyarsk and Emperor Alexander III, highlighting a significant enhancement of Russia's naval capabilities. The submarines, belonging to the Yasen-M and Borei-A classes, signify a substantial upgrade to Russia's nuclear arsenal and the subs deployment in the Pacific indicates a geopolitical strategy as the fleet avoids notable bottleneck straits and the country's maritime force is strengthened beyond the scope of the Ukraine invasion. Russia's unveiling of advanced nuclear submarines likely aims to threaten NATO and its allies.
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Domestic Civil Nuclear Developments |
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The Department of Energy issued a request for proposals (RFP) for uranium enrichment services to help establish a reliable domestic supply of fuels using high-assay low-enriched uranium (HALEU). Through this RFP, the Biden administration will provide up to $500 million for HALEU enrichment contracts selected, as well as a separate RFP for services to de-convert the enriched uranium into metal, oxide, and other forms to be used as fuel for advanced reactors. Currently, HALEU is not commercially available from U.S.-based suppliers, and the only company selling commercial shipments of HALEU internationally is the Russian-owned company TENEX.
Kairos Power successfully completed 1,000 hours of pumped salt operations after loading 12 metric tons of molten salt into its Engineering Test Unit (ETU) at its testing and manufacturing facility in New Mexico. The ETU is the largest molten salt system ever built and will be used to inform the design, construction, and operation of the Hermes advanced reactor. The Hermes project is part of the Department of Energy’s Advanced Reactor Demonstration Program and could be operational as early as 2026.
Department of Energy spokesperson Chad Smith said that no applications were certified during the Biden administration’s second attempt to solicit takers for the $6 billion nuclear financial aid program. The nuclear financial aid program aims to keep the U.S. nuclear industry stable as nuclear energy makes significant contributions to the country’s zero-carbon energy objectives.
The Department of Energy will award credits under its Civil Nuclear Credit (CNC) program to bolster the continued operation of the Diablo Canyon Nuclear Power Plant in California. A record of decision published by the agency’s Grid Deployment Office effectively awards credits to PG&E to help the Diablo Canyon plant continue operations under existing Nuclear Regulatory Commission (NRC) licenses and programs. Payments of credits are expected to occur annually beginning in 2025 and will be paid retroactively to compensate PG&E for Diablo Canyon operations in the prior years.
According to Department of Energy documents obtained by Politico, the use of small modular reactors could provide a steady supply of electricity to a major carbon removal facility planned in Wyoming. The interest in small nuclear reactors by CarbonCapture Inc. is among several previously undisclosed components of its initial concept for the Wyoming Regional Direct Air Capture Hub. This revelation comes as the Biden administration is moving to direct billions of dollars towards commercializing direct air capture technologies while also supporting the U.S. nuclear power industry.
A report by the Pueblo Innovative Energy Solutions Advisory Committee has recommended that Xcel Energy-Colorado replace the Comanche 3 coal plant with modular nuclear units. The report argues that a nuclear facility will create more jobs and tax revenue for local governments, finding that tax revenue would amount to $95.29 million a year. Xcel will consider the recommendations as it develops a new plan to provide a transition for the community leading up to the closure of Comanche 3 by the start of 2031.
The Michigan Public Service Commission’s nuclear feasibility study group published a draft report concluding that new and continuing nuclear power generation “will be necessary” to achieve benchmarks set by recently adopted clean energy legislation. Michigan’s government has signaled its support for resuming nuclear power generation in the state. Additionally, Holtec International plans to restart its Palisades Nuclear Power Plant, as well as build two more nuclear reactors at the site.
Federal regulators have lessened the severity of their warning about cracks discovered in a backup emergency fuel line at the V.C. Summer Nuclear Station after Dominion Energy showed its generator could still run for six hours in an emergency. Officials plan to complete another inspection of the V.C. Summer site to see if Dominion Energy fixes the ongoing issues. There have been cracks and leaks discovered at the V.C. Summer facility at least five times over the past two decades.
Three new uranium mines in the United States began production at the end of 2023, as U.S. mining company Energy Fuels opened mines in Arizona and Utah in response to strong market conditions. Energy Fuels is also looking to commence production at mines in Utah and Colorado in the next year, which would increase its uranium production to more than two million pounds of U3O8 by 2025 if strong market conditions continue as expected.
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The Nuclear Business Platform published an assessment of nuclear energy development in Africa, creating a ranking method which highlights the potential of African countries to develop nuclear power. The report divides African countries into three tiers, with tier 1 including countries with a discernible and robust commitment from their respective governments to actively pursue or enhance nuclear power programs within specific time frames, while the lower tiers featuring countries with either government endorsements of nuclear power or those actively engaging in the development of requisite infrastructure. The report also includes analyses of Rwanda, Kenya, Uganda, and Nigeria’s nuclear energy aspirations and initiatives.
The London-based think tank New Nuclear Watch Institute released a report calling for a Marshall Plan scale approach to help bring small modular reactors (SMR) to the international market. The report describes SMRs as vital for achieving net zero by 2050, but also acknowledges that the sector faces numerous technological, economic, and geopolitical hurdles that will impact SMR technology adoption and scalability. The Institute’s base case scenario estimates that the first wave of SMR deployment will occur around 2030-2035 and reach a capacity of 150-170 gigawatts (GWe). New Nuclear Watch Institute adds that Russian and Chinese designs are poised to represent 40% of the global SMR fleet if current trends persist.
The Australian agency Commonwealth Scientific and Industrial Research Organization (CSIRO) published a report finding that nuclear power would be the most expensive source of new energy for Australia. The report states that the most expensive power would come from a theoretical small modular reactor, while electricity generated from solar and on-shore wind projects would be the cheapest even when accounting for the costs of keeping the power grid reliable while they’re integrated into the system. The GenCost report is published each year by the CSIRO to provide an annual update on the estimated costs of building new electricity generation up to 2050.
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The Los Angeles Times, January 9
The Boston Globe, January 9
City Journal, January 7
Neutron Bytes, January 7
The Wall Street Journal, January 6
Bulletin of the Atomic Scientists, January 5
Carbon Credits, January 5
Bloomberg, January 4
Reuters, January 4
The Breakthrough Institute, January 3
The Daily Signal, January 3
Real Clear Energy, January 2
The National Interest, January 2
The Wyoming Tribune Eagle, January 2
Real Clear Energy, December 29
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News items and summaries compiled by:
Patrick Kendall, Program Manager, Partnership for Global Security
Emily Day, Della Ratta Fellow, Partnership for Global Security
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For twenty-five years the Partnership for Global Security (PGS) has developed actionable responses to global security challenges by engaging international, private sector, and multidisciplinary expert partners to assess policy needs, identify effective strategies, and drive demonstrable results.
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