Thomas Agate, M. Eng. In Energy, Energy Systems Engineering, Lehigh University

Rudy Shankar, Director, Energy Systems Engineering, Lehigh University

The world is far off track for meeting international climate goals. Even if the world manages to fully decarbonize the electricity supply by 2050, there would be several other sectors of the energy system still using fossil fuels, like transportation, industry, and heating. This paper stresses the important role existing- and new nuclear plants could play in meeting climate goals as the supply- and demand side decarbonize their respective fuels. Increasing reliance on nuclear power is a good bet: the U.S. has an enviable track record in the safe and reliable operation of the world’s largest nuclear fleet for over 7 decades. Most of the nuclear plants that were built in the 1950’s and 60’s have successfully filed for a 20-year license extension to continue to operate into the decade of the 2030’s. Yes, there would be a gap in that decade as the original fleet are decommissioned, and this paper extolls the development of advanced nuclear reactors that could fill that breach.

Introduction

As more industries are electrified, the demand for clean electricity will continue to grow exponentially, making it difficult for renewables to fully displace fossil fuels without the help of nuclear energy. Nuclear needs to be considered as part of the clean energy solution. As the largest source of carbon-free electricity in the US, nuclear plants can vastly assist to decarbonize the electricity supply. Renewable energy capacities, like wind and solar, are on the rise globally and will be important contributors to the global clean energy portfolio. However, supply intermittency, land use issues, and lack of sufficient energy storage capacity limits an ultimate level of renewable penetration throughout the entire energy system.

 Nuclear energy can provide reliable, carbon-free energy. The question is how can nuclear energy be utilized to decarbonize other sectors besides electricity? Nuclear energy has been largely relegated to base-load electricity production. However, a new generation of small modular reactors offers significant promise for extending nuclear energy to non-electrical applications, such as green hydrogen production.

Decarbonization Goals

The main goal of the Paris agreement is to limit the increase in global warming to well below 2°C, preferably 1.5°C, above pre-industrial levels. To achieve this goal, countries aim to cut down on greenhouse gas emissions as soon as possible to create a carbon-neutral world by 2050. In a newly released report by the International Energy Agency (IEA), nations around the world would need to immediately stop approving new coal-fired power plants and new oil and gas fields and quickly phase out gasoline-powered vehicles if they want to avert the most catastrophic effects of climate change.

Supply Side Decarbonization

Implementing the Paris Agreement and creating a carbon neutral society requires drastic economic and social transformations. In the agreement, countries carry out increasingly ambitious climate action targets based on a 5-year cycle.

Figure 1. Global greenhouse gas emissions and projected global warming increase for various climate action scenarios

In the absence of any climate action policies—the business-as-usual strategy-- global warming is projected to reach 4.1°C-4.8°C above pre-industrial levels by 2100 as seen in Figure 1. Based on climate policies currently in place around the world, baselines emissions are projected to reduce enough to result in a 2.9°C warming by the end of the century. The unconditional pledges and targets set by governments would only limit warming to about 2.6°C, well above the Paris Agreement’s long term temperature goal. There is still a substantial gap between what governments have promised to do and the actual actions that they have currently undertaken. Limiting global warming to 1.5°C by 2100 means that greenhouse gas emissions would need to be drastically reduced in the coming years and brought to zero by 2050.

Decarbonizing the electricity supply is the most widely discussed topic when it comes to transitioning from fossil fuels to clean energy. However, electricity only accounts for approximately 27% of all GHG emissions. The transportation and industrial sectors each account for about 28% and 22% respectively. Meeting Paris Agreement goals would imply reducing GHG emissions by 80%-95% of the 1990 levels by 2050. This means these targets cannot be reached without significantly decarbonizing most of the electricity, transportation, and industrial sectors.

This is why nuclear energy should be considered  a player for decarbonizing the supply and demand side The United States is the world’s largest producer of nuclear energy, accounting for more than 30% of global nuclear generation.  In 2019, despite making up only 9% of the US generating capacity, nuclear power supplied 20% of the electricity generation (Figure 2). 

                                   Figure 2: Capacity and generation mix of US electricity portfolio.​

For cost and technical reasons, nuclear power plants are generally used more intensively than coal or natural gas plants. Since 2001, the American fleet of nuclear reactors have achieved an average capacity factor of over 90%. Starting from 50% in the early 1970’s, rising to 70% in 1991, and passing 90% in 2002. In 2019, the average capacity factor of nuclear power was 94%, compared with 32% from wind and 22% from solar. Although in 2019 there were fewer operating nuclear reactors than in 2013, total nuclear electricity generation capacity at the end of 2019 was about the same as the total capacity in 2003, when the US had 104 operating reactors. The combination of high-capacity factors and power plant uprates, which are modifications to increase plant capacity, have made it possible for nuclear power plants to maintain a consistent share of about 20% of total annual US electricity generation since 1990. In 2018, nuclear plants generated about 55% of American’s carbon-free energy. That is more than 2.5 times the amount generated by hydropower, nearly three (3) times the amount generated by wind, and more than 12 times the amount generated by solar. As seen in Figure 3 below, nuclear power has one of the lowest life-cycle carbon emissions out of any other energy source, even amongst renewables.. 

                                Figure 3. Life-cycle carbon emissions from selected energy sources​

Demand Side Decarbonization

Decarbonizing our energy system will require the research, development, and implementation of many new clean energy technologies and methods. Some of these new technologies include:

• Grid-scale energy storage at one-tenth the cost of lithium-ion batteries
• Small modular nuclear reactors at half the construction cost of current reactors
• Using GHG-free refrigerants for refrigeration and air conditioning
• Net-zero energy for buildings
• Producing carbon-free hydrogen at the same cost as using natural gas
• Decarbonizing industrial heat needed to make steel, concrete, and chemicals
• Implementing carbon capture and storage on existing fossil fuel plants

From 2005 to 2020, the U.S. achieved a 17% reduction in energy-related CO2 emissions. In order to achieve a 50% reduction in GHG emission by 2030, the U.S. must triple the rate of decarbonization achieved over the last 15 years. The electricity sector has already started to decarbonize, but every other sector needs to decarbonize to meet the net-zero emissions goal by 2050.

Small Modular Reactors

In recent years, there has been a substantial attention given to new, modular, or advanced nuclear technologies that offer the prospect of major improvements in the costs, risks, and public perception of nuclear energy. Small modular reactors (SMRs) of varying designs and configurations are currently being developed. These miniature reactors are generally in the 25-400 MW range, and may be built independently or as modules to collectively comprise a larger nuclear plant. By varying the number of reactors producing power, SMRs may be capable of load-following and supporting intermittent renewables. Generally, SMRs are expected to have greater simplicity of design, economy of series production, short construction times, and reduced siting and construction costs.

The small modular reactor design is well suited for decarbonizing individual industrial processes by supplying dedicated electricity and green hydrogen. Due to its highly flexible and modular plant design, small modular reactors have the potential to supplement the intermittent electricity supply of renewables, while generating green hydrogen. Green hydrogen remains a feasible option to address the “difficult-to-decarbonize” sectors like aviation, shipping, heating, and industry. In order for a hydrogen economy to make meaningful reductions to greenhouse gas emissions, the hydrogen needs to be generated from a carbon-free source of energy like nuclear. Nuclear-generated hydrogen has the potential to quickly decarbonize hard-to-electrify sectors, while incentivizing the large-scale build out of both nuclear and renewable generating capacity.

Nuclear Economics

SMRs will almost certainly be cheaper to build and operate than conventional nuclear plants, but it must be able to compete with natural gas in order to be implemented on a large enough scale. When weighing options for new electricity generation projects, utilities, investors, and governments, must consider the levelized cost of electricity (LCOE). The LCOE is the measure of a plant’s cost per unit of electricity ($/MWh) and is calculated by dividing the plant’s total lifetime costs by the total electricity produced over the course of the plant’s lifetime. SMRs aim to produce electricity at a total cost of $65/MWh, about 20% higher than the current cost of energy from a natural gas plant. 

 Besides capital cost, annual operating costs, and electricity generation, the discount rate is another crucial parameter that affects the LCOE. For any project to succeed, it must be an attractive investment to private or public investors. Nuclear reactors often are poor short-term investments due to their large capital costs, but are good long-term investments due to their long operating lives and low operating costs. The opposite is true for natural gas. The discount rates reflect the fact that profits are more valuable today than in the future.

The US renewable industry today is the product of more than a decade of policy choices, portfolio standards, and subsidies, as well as improved technology and rapidly declining costs, rather than pure market forces. A similar sustained national commitment would be necessary to significantly expand nuclear power in the US. According to the US Department of Energy, solar and wind received $2.4 and $4.3 billion respectively, in direct subsidies in 2013, while nuclear only received $0.037 billion. Renewables also receive tax-related subsidies, such as production tax credits. In total, renewables received 72% of all electricity-related federal subsidies. Currently, renewables receive a production tax credit of up to $25/MWh. As shown in Figure 4, if nuclear plants received an emissions credit of $15/MWh  it would be competitive with natural gas at a high enough discount rate to garner private support.

Figure 4. Subsidy necessary for NuScale SMR plant to achieve cost parity with natural gas at​      specific discount rates. Different natural gas fuel cost scenarios shown. (Courtesy of the Breakthrough Institute)

Summary

The prospects for reaching Climate Action Plan targets under the Paris Agreement while ambitious are likely to fall short if nuclear energy were not to be considered significant players. Nuclear energy—both in its current forms of existing nuclear reactors as well as advanced modular designs—play a vital role in achieving these goals. For nuclear energy is GHG emissions free and smaller modular reactors can decarbonize both the supply and demand side. The US and major Western nations have a long and successful history in the operation and maintenance of nuclear power that should add to the confidence in proceeding with this strategy.