There are many reasons to be optimistic about the prospects for nuclear energy. As a carbon-free energy source, it is a great option for power generation in a world trying to reduce greenhouse gas emissions and stop climate change. The fact that nuclear reactors can operate at baseload with capacity factors regularly greater than 90% means it provides stability and reliability to complement intermittent renewable energy resources. The bevy of new advanced reactors expected to hit the market soon offer a wide range of options to meet nearly any type of application, including supplying sparsely populated remote areas using microreactors, replacing mid-sized coal and gas-fired plants with small modular reactors (SMRs), and filling larger central generation station roles with gigawatt-scale units. Several designs are also being considered to meet combined heat and power needs.
NANO Nuclear Energy Inc. is one of the companies working on microreactor technology. Microreactors are generally classified as units capable of producing from about 1 MW to 20 MW of power. NANO Nuclear says it is developing “smaller, cheaper, and safer advanced portable carbon-free energy solutions utilizing proprietary novel reactor designs.” Its products in technical development are “ZEUS,” a solid core battery reactor (Figure 1), and “ODIN,” a low-pressure coolant reactor, each of which the company says represent “advanced developments in portable, on-demand capable, advanced nuclear microreactors.” NANO Nuclear also has a subsidiary, HALEU Energy Fuel Inc., which is focused on developing a domestic source for high-assay low-enriched uranium (HALEU) fuel fabrication. HALEU is the fuel needed by many of the advanced reactors under development including NANO Nuclear’s designs.
Recently, POWER had the opportunity to question NANO Nuclear’s founder and chairman, Jay Jiang Yu, and the company’s CEO, James Walker, via an email exchange. The intent of the interview was to better understand what is necessary for the nuclear industry to thrive in America. The questions and their answers follow.
POWER: Why is nuclear power important to the U.S. and the world?
Jay Jiang Yu: The U.S. has taken numerous steps in recent years to reduce its dependence on carbon-emitting energy sources. The U.S. had previously set a goal to reach a 100% carbon pollution-free electricity system by 2035, and President Biden set a target of a 50% to 52% reduction from 2005 levels in economy-wide net greenhouse gas pollution by 2030, underlining the Biden administration’s desire for new energy solutions, which are at the core of our business plans. Additionally, the “net-zero world” initiative signals the U.S.’s proactive stance in working with countries to lead a global transition to net-zero emissions by 2050.
In the face of these evolving energy needs, the utility companies that are members of the Nuclear Energy Institute (NEI) are targeting a role for more than 90 GW of nuclear power in support of their decarbonization goals. According to the U.S. Energy Information Administration (EIA), while the share of U.S. electricity generated by nuclear energy across all sectors in 2021 was similar to its average share of 19% in the previous decade, its average annual capacity factor remained fixed at 92.7% that same year. By comparison, solar photovoltaics’ annual capacity factor was 24.6% in the same year, while coal’s capacity reached just 49.3%. Further, fuel costs for nuclear versus fossil steam in 2021 were recorded to be just $0.00631/kWh versus $0.02464/kWh, respectively, according to the EIA.
According to IBISWorld, an industry market research, reports, and statistics group, the market size of the U.S. nuclear power industry has actually declined 1.2% per year on average between 2017 and 2022 due to retiring power plants and a lack of plans to fill the void left behind. In 2012, there were 104 operating nuclear reactors in the U.S., but by the end of 2021 there were only 93 operating commercial nuclear reactors at 55 nuclear power plants in 28 states. According to the U.S. Nuclear Regulatory Commission (NRC), as of November 2021, there were 23 shut down commercial nuclear power reactors at 19 sites in various stages of decommissioning.
Nevertheless, the market size, measured by revenue, grew 4.9% in 2022 to reach a valuation of $38.1 billion. Furthermore, the U.S. nuclear energy market has been projected to grow at a compounded annual growth rate (CAGR) value of 4.8% from 2022 to 2027, driven largely by the increasing pressure on the American government to reduce its carbon emissions and the increasing amount of electricity being generated from clean energy sources.
An analysis by the Nuclear Energy Agency (NEA) found that meeting the average of the International Panel on Climate Change pathways consistent with limiting global warming by 1.5 degrees Celsius by 2050 will require tripling global installed nuclear capacity to reach 1,160 GW by 2050. This can be achieved through a combination of long-term operation of existing nuclear reactors, large-scale so-called “Generation III” nuclear new builds, and SMRs for both power and non-power applications.
SMRs, such as our proposed microreactors, will have an essential and increasingly important role to play in addressing the nuclear capacity gap and supporting decarbonization targets. The NEA estimates that by 2050 SMRs could reach 375 GW of installed capacity, contributing to more than 50% of this capacity gap. One of the key features of SMRs is that they target applications of nuclear energy to support the decarbonization of sectors that are difficult to address, particularly in the cement, chemicals, and iron and steel industries that do not require (or cannot support) gigawatt-scale nuclear power generation and/or where variable renewables face limitations.
Nuclear energy is already the largest source of non-carbon emitting electricity generation in the 37 Organization for Economic Co-operation and Development (OECD) countries and is responsible for displacing over 1.6 gigatonnes of carbon dioxide emissions annually. NEI has estimated that since 1971, nuclear energy has displaced over 66 gigatonnes of carbon dioxide.
The resurgence of nuclear power as a means of achieving net-zero emissions by 2050 entails a dramatic increase in investment over the coming decades into new nuclear power plants and the extension of the lifetime of old plants to increase this displacement. Annual global investment in nuclear in this scenario surges to over $100 billion in the first half of the 2030s—over three times the current average investment in the industry of $30 billion per year throughout the 2010s.
POWER: Should the U.S. be concerned that China is likely to overtake it as the leading nuclear power producing nation within the next five to 10 years?
James Walker: The U.S. should be concerned about China becoming the leading nuclear energy-producing nation, but these concerns encompass many various factors, including its energy and economic interests, environmental considerations, and the broader geopolitical landscape.
Energy Security. A robust nuclear energy program can contribute to a nation’s energy security and help diversify its energy sources. If China becomes the leading nuclear energy producer, it could enhance its energy security, which may have economic and geopolitical implications for the U.S. and the rest of the world.
Environmental Benefits. Nuclear energy is often considered a low-carbon energy source that can help mitigate climate change. If China’s expansion of nuclear energy helps reduce its reliance on fossil fuels, it could have positive environmental consequences globally.
Technological Advancements. A competitive global market for nuclear energy technology can lead to technological advancements and innovation in the nuclear industry. If China’s growth in this sector drives innovation, it could benefit the broader nuclear energy community.
Economic Implications. The U.S. should consider the potential economic implications of China’s nuclear energy growth. It might affect global competition in the nuclear energy market and have repercussions for U.S. companies in the sector.
Safety and Regulatory Concerns. Ensuring the safe operation of nuclear power plants is crucial. The U.S. should monitor and engage with China on nuclear safety and regulatory standards to ensure that any expansion of its nuclear energy program is carried out safely.
International Cooperation. The U.S. and China could explore opportunities for international cooperation on nuclear energy. Collaboration on research, development, and safety standards can be mutually beneficial.
Geopolitical Considerations. China’s increasing prominence in the nuclear energy sector may also be viewed in the context of broader geopolitical competition. The U.S. should carefully assess how China’s nuclear energy advancements fit into its overall geopolitical strategy.
POWER: What are the biggest challenges to a thriving U.S. nuclear power industry?
Yu: The U.S. nuclear power industry faces several significant challenges that affect its ability to thrive.
One of the primary challenges for the U.S. nuclear power industry is economic competitiveness. Nuclear power plants require substantial upfront capital investment, and the costs of construction, operation, and maintenance can be high. Cheap and abundant natural gas, along with the growth of renewable energy sources, has created tough competition for nuclear power.
Many of the existing nuclear power plants in the U.S. are aging, and maintaining their safety and reliability can be expensive. Decisions about whether to invest in costly upgrades or decommission older plants can be challenging.
The regulatory environment for nuclear power is stringent, and the licensing process for new nuclear facilities or the relicensing of existing ones can be protracted and costly. Delays in regulatory approvals can add significant financial burdens.
The issue of nuclear waste disposal remains unresolved in the U.S. Finding a long-term solution for the storage and disposal of nuclear waste is a critical challenge. The lack of progress on this front has hindered the development of new nuclear projects.
Nuclear accidents like Chernobyl and Fukushima have heightened public concerns about nuclear safety. Overcoming negative public perceptions and ensuring safety are ongoing challenges for the industry.
The rapid growth of renewable energy sources like wind and solar power has shifted the energy landscape. These sources often receive government incentives and are seen as more environmentally friendly, making it harder for nuclear power to compete.
The U.S. has not seen the construction of new nuclear power plants in many years. The lack of new projects can hinder technological advancements and workforce development in the industry.
Changes in government policy, subsidies, and regulations can significantly impact the nuclear industry. The industry often requires long-term policy support and stability to thrive.
Securing financing for nuclear power projects can be challenging due to the high upfront costs and uncertainties associated with project completion and regulatory approvals.
Developing and implementing advanced reactor technologies that are safer and more cost-effective is a challenge for the industry. It requires substantial research, development, and testing.
The nuclear industry faces a potential shortage of skilled workers, including operators, engineers, and technicians. Ensuring a well-trained workforce for the future is crucial.
POWER: What should the government be doing to encourage growth in the nuclear industry?
Walker: Several actions could be taken by the government to encourage growth in the nuclear power sector.
Streamline Regulatory Processes. Simplify and expedite the regulatory approval and licensing processes for both new and existing nuclear facilities. Reducing unnecessary delays and uncertainties can make nuclear projects more attractive to investors.
Provide Long-Term Policy Support. Establish clear and consistent long-term policies that provide incentives for nuclear energy development. This could include financial incentives, such as production tax credits or loan guarantees, to help reduce the financial risks associated with nuclear projects.
Nuclear Waste Management. Accelerate efforts to find a permanent solution for nuclear waste storage and disposal. Addressing this issue can improve public confidence in nuclear energy and clear a major obstacle for the industry’s growth.
Research and Development Funding. Invest in research and development (R&D) for advanced nuclear technologies, such as SMRs and next-generation reactors. R&D can help make nuclear power more cost-effective, efficient, and safe.
Workforce Development. Support programs and initiatives to train and educate the nuclear workforce. Ensuring a skilled and qualified workforce is critical for the industry’s growth.
Public Outreach and Education. Implement public outreach and educational campaigns to improve public perception of nuclear energy. Highlight the industry’s safety record, environmental benefits, and its role in reducing greenhouse gas emissions.
International Collaboration. Engage in international collaborations to share knowledge, best practices, and technological advancements in the nuclear field. International partnerships can help drive innovation and reduce costs.
Market Reforms. Consider market reforms that value the attributes of nuclear power, such as its reliability and low greenhouse gas emissions. Implementing carbon pricing mechanisms or clean energy standards can create a more level playing field for nuclear energy.
Support for Existing Plants. Provide financial incentives or subsidies to help existing nuclear power plants remain operational. These plants are often essential for grid stability and maintaining a diverse energy mix.
Infrastructure Investment. Invest in the modernization and refurbishment of aging nuclear facilities to extend their operational lifetimes and enhance their safety.
Collaboration with Industry. Work closely with the nuclear industry to understand its needs and challenges, and develop policies that align with industry goals and objectives.
Grid Integration. Support efforts to integrate nuclear power into the electrical grid efficiently, including grid modernization and smart grid technologies.
Public-Private Partnerships. Foster partnerships between the government and the private sector to promote innovation, share risks, and jointly invest in nuclear projects
POWER: How is NANO Nuclear Energy’s work poised to help?
Yu: We are an emerging, early-stage nuclear energy company developing smaller, cheaper, and safer advanced portable carbon free energy solutions utilizing proprietary reactor designs, intellectual property, and research methods. Led by a world-class scientific and management team, our business plan is to participate in all stages of the nuclear power industry, from sourcing raw nuclear material and fuel fabrication, to providing energy through our cutting-edge, advanced SMRs, also known as microreactors, to providing commercial nuclear transportation and consulting services. We are aiming to be part of the solution to rebuilding the nuclear infrastructure in the country while we seek to build new technology to deploy nuclear in areas it has not been previously deployed.
Our goal is to create a commercially focused, diversified and vertically integrated technology-driven nuclear energy company that will capture market share in the very large and growing nuclear energy sector. NANO is focusing its energies on deployable energy systems that could service remote locations more quickly. The market is potentially endless, with tens of thousands of mining operations running on diesel, which could financially benefit from a steady source of energy over a 20-year period. Additionally, tens of thousands of mine sites, which are not currently economic, could suddenly be made economic, and free up huge deposits of mineral wealth. This idea can be applied most notably to Africa where enormous mineral wealth exists but is often inaccessible due to the power demands of modern mining operations. This example can be extended to all remote industrial projects. Wherever diesel generators are deployed, the NANO reactor will provide a less-difficult logistical power source, requiring no daily shipments of fuel like diesel generators.
Other large markets include remote habitation, where over a hundred remote settlements in Canada, which run exclusively on diesel, were identified. It was then realized that countries with numerous islands, such as Thailand, Indonesia, Japan, South Korea, the U.S., Sweden, Philippines, etc., also have large numbers of inhabited islands sustained predominantly by diesel. Catering to this market would open up tens of thousands of deployment and sales opportunities to NANO.
If countries are also serious about electrifying their transportation infrastructure, only microreactors would be able to service charging stations for electric vehicles throughout a country. Wind and solar can only be sited where they can generate sufficient output energy, and batteries cannot be shipped to charging stations on a daily basis, especially outside of cities, or between urban developments. Microreactors could make it possible to actually eliminate the need for fossil-fueled vehicles, which no other energy form can currently claim.
The shipping industry is also a major area of growth for the business. The U.S. Navy has already demonstrated decades of successfully powering large ocean-going ships without incident, or any carbon emissions. Oil tankers, shipping container vessels, and other large ships all use bunker fuel, which is incredibly dirty and bad for the environment. Global focus will eventually shift to substituting this fuel as soon as a candidate is identified. NANO will have that candidate replacement.
Introducing nuclear to all these industries would drive down global carbon emissions and cement nuclear as the primary energy source for remote operations.
POWER: Is there anything else you’d like to share concerning steps needed to see meaningful growth in the U.S. nuclear power industry?
Walker: According to a published McKinsey report dated March 21, 2023, up to 800 GW of new nuclear power could be necessary to meet net-zero targets. In estimating the nuclear power needed to support the energy transition, we used techno-economic grid modeling to project the overall power mix by 2050. Our scenario—based on “Further Acceleration” estimates from McKinsey’s Global Energy Perspective 2022 for global energy mix, as well as anticipated supply and demand for power—accounts for potential constraints on scale-up in renewables, such as scarcity of land, raw materials, and transmission limitations.
Although our scenario does not rely on a full analysis of grid models and energy-transition scenarios, it does estimate roughly how much additional dispatchable, low-carbon generation will be needed to meet net-zero targets. Our modeling reveals that the energy transition could require an additional 400 GW to 800 GW of new nuclear energy—which could represent 10% to 20% of future global electricity demand—to meet the need for dispatchable power (that is, not wind and solar) by 2050. 800 gigawatts of net additional nuclear capacity would triple the current nuclear capacity of 413 GW and would require approximately 1,000 GW to be generated by new nuclear facilities, as between 100 GW and 250 GW of current capacity will need to also be replaced. This represents a very large market for our proposed microreactors to participate in, with even a small amount of market share capture leading to significant revenue generating opportunities for our company.
—Aaron Larson is POWER’s executive editor (@POWERmagazine).
[Ed. correction (Sept. 28, 2023): Originally, fuel costs for nuclear versus fossil steam in 2021 were reported as $0.631/kWh versus $2.464/kWh. The actual costs were $0.00631/kWh and $0.o2464/kWh, respectively.]