"Nuclear expansion might take longer than expected," "Oil Price, UK, 3/21/24)

By Tsvetana Paraskova - Mar 21, 2024, 5:00 PM CDT

• At the COP28 climate summit at the end of last year, the United States and 21 other countries pledged to triple nuclear energy capacities by 2050.
• Most Western governments – with the notable exception of Germany – are now betting on nuclear power to help them with the carbon emission targets.
• The West has seen in recent years several cautionary tales of huge delays and cost overruns in looking to boost nuclear capacity.

Western nations may be getting ahead of themselves in their ambition to swiftly roll out new nuclear power capacity in the current push to reduce dependence on Russian uranium and meet net-zero targets with more nuclear-generated electricity.   

At the COP28 climate summit at the end of last year, the United States and 21 other countries pledged to triple nuclear energy capacities by 2050, saying that incorporating more nuclear power in their energy mix is critical for achieving their net zero goals in the coming decades.   

The United States, alongside Britain, France, Canada, Sweden, South Korea, Ghana, and the United Arab Emirates (UAE), among others, signed the declaration at the COP28 climate summit in Dubai.

“The Declaration recognizes the key role of nuclear energy in achieving global net-zero greenhouse gas emissions by 2050 and keeping the 1.5-degree Celsius goal within reach,” the U.S. Department of State said.

John Kerry, President Joe Biden’s climate envoy, says there are “trillions of dollars” available that could be used for investment in nuclear energy

“We are not making the argument to anybody that this is absolutely going to be the sweeping alternative to every other energy source — no, that’s not what brings us here. But you can’t get to net-zero 2050 without some nuclear power,” he told reporters at the time.

“Too Optimistic”

Most Western governments – with the notable exception of Germany – are now betting on nuclear power to help them with the carbon emission targets.

But many may have become too optimistic they would see a fast rollout of nuclear reactors and capacities in an industry notoriously known for years of delays and huge cost overruns.  

“Clients, governments and ourselves as the industry players . . . we all become too optimistic,” Ian Edwards, chief executive of Canada’s engineering giant AtkinsRéalis, told the Financial Times.

“We have this optimism bias towards being able to deliver faster.” Related: Big Oil Grows Bolder in Transition Pushback

The stakeholders need to plan better and get the execution phase done right, according to the executive of the company, which manufactures the CANDU reactor, the only nuclear reactor that doesn’t need enriched uranium.

The CANDU technology stands for Canada deuterium uranium because it uses deuterium oxide, or heavy water, as a moderator and coolant and uses natural – not enriched – uranium as a fuel.

The West has seen in recent years several cautionary tales of huge delays and cost overruns in looking to boost nuclear capacity. Two of the glaring examples are the UK’s Hinkley Point C project by French energy giant EDF and the Vogtle nuclear power plant in the U.S. state of Georgia.

Early this year, EDF pushed back – again – the probable operational start at Hinkley Point C to 2029-2031, depending on various scenarios, compared to the original intention to have the first unit at the plan running in 2025. The costs have gone through the roof – to an estimated $43.5 billion (£34 billion), from $23 billion (£18 billion) budgeted initially.

In Georgia, a new reactor at the Vogtle nuclear power plant began commercial operation last summer in what was the first new nuclear reactor to start up in the United States since 2016. Construction at the two new reactor sites at Vogtle began in 2009. Originally expected to cost $14 billion and begin commercial operation in 2016 (Vogtle 3) and 2017 (Vogtle 4), the project ran into significant construction delays and cost overruns. The total cost of the project is now estimated at more than $30 billion.  

New Technology Promises Revival of Nuclear Power

AtkinsRéalis, whose natural-uranium reactor design differentiates it from the competition, has a sales pitch advantage because of the Russian dominance in enriched uranium supply, Edwards told FT.

But he warned that demand for AtkinsRéalis’s technology is likely to exceed the company’s capacity to meet it.

Last year, AtkinsRéalis’s revenues from its nuclear division rose by 16.5% compared to 2022, thanks to higher sales volumes from Europe, Asia, and the United States.

Despite the West’s attempts to reduce its reliance on Russian uranium, the EU doubled its imports of Russian nuclear fuel last year, mostly due to former Soviet bloc countries such as the Czech Republic and Slovakia importing Russian fuel for their Soviet-era nuclear plants, NGO Bellona said in an analysis last week, citing data from Eurostat and the UN’s international trade service Comtrade.

The United States is doubling down on its own supply of nuclear fuel and technology, including innovative reactor designs.

Soaring uranium prices and a supply squeeze on the global uranium market have prompted U.S. uranium producers to revive abandoned mines that haven’t been operational in more than a decade.

Early this year, Uranium Energy Corp said it would restart uranium production at its fully permitted site in Wyoming as the resurgence in nuclear power has led to a new bull market in uranium.

“Uranium market fundamentals are the best the industry has witnessed,” Uranium Energy president and CEO Amir Adnani said in January.

The U.S. is also backing advanced nuclear technology and small-scale reactors, hyped to be the future of nuclear energy.

This week, TerraPower, a company working on small-scale nuclear reactor development backed by Bill Gates, said it would begin construction on its next-generation nuclear reactor in the United States as soon as June.

TerraPower has been developing the Natrium technology for advanced reactors, which features a sodium-cooled fast reactor with a molten salt-based energy storage system. The Natrium demonstration plant will be built near a retiring coal facility in Kemmerer, Wyoming.

By Tsvetana Paraskova for Oilprice.com

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