From Science-Fiction To Stagnation
Saying that nuclear energy is controversial is an understatement. Many see it as an extremely dangerous idea, bringing up the specter of Chernobyl and Fukushima as proof, and the problem of nuclear waste as something unsolvable. Others see it as a potential civilization-saving technology, thanks to its ability to generate baseload power with extremely low carbon emissions and land footprint.
This division existed early on before climate change was even a topic.
The world first became aware of the extraordinary power of nuclear with the atomic bombing of Hiroshima and Nagasaki, soon followed by the invention of the H-bomb and the Cold War. From these origins, the destructive potential of our newly acquired mastery of the atom was clear.
Soon, the idea of harnessing it for peaceful purposes also took hold. First was the “Atom For Peace” initiative, then a massive wave of construction of nuclear power plants worldwide. For a time, it seemed clear that the future was nuclear and that burning coal, oil, and gas would soon be as obsolete as the Netherlands’ picturesque windmills.
In practice, nuclear power production stopped growing in the late 1990s post-Chernobyl and has stagnated globally since, with China”s growing production compensating for the declining European nuclear industry.
Source: Nuclear Energy – Our World in Data
For many years, it was mostly China and Russia only that seemed willing to develop nuclear energy.
Especially China, which is, as The Economist put it, “building nuclear reactors faster than any other country”.
Source: The Economist
Today, nuclear energy is making a comeback globally, at a scale unimaginable a few years ago, with many news pointing at a change in policies throughout most of the world:
The Missing Decarbonization Link?
Safety concerns are still very much alive, and they are the justification behind Germany’s decision to shut down its nuclear power plants.
However, concerns about carbon emissions and climate change are becoming more pressing, and nuclear energy is actually the smallest emitter of all energy sources, even better than wind and solar, which require a lot more land and raw materials.
Source: Our World In Data
While spectacular and with lasting consequences, nuclear is also, in practice, as safe as renewables when measuring the deaths it has caused, even when including major disasters.
So, when looked at objectively, nuclear should probably be one of the tools used for decarbonizing the power grid and the economy at large. This is especially true as we need more and more power for the electrification of transport (EVs) and heating (heat pumps), as well as new needs like AI data centers.
The amount of coal, oil, and gas that needs to be replaced is staggering. Even considering the progress made in renewables and EV adoption, they still make up the immense majority of our energy consumption today.
Source: Our World In Data
What About Nuclear Waste?
The real safety profile of nuclear, however, leaves the question of nuclear waste.
The idea of leaving behind for future generations toxic waste that will be dangerous for a much longer time than the Great Pyramid has been standing is, to say the least, distressing.
Should we poison the future to save the climate? Luckily, at least two sets of solutions are emerging from technological progress to answer this dilemma.
The first option is to recycle nuclear waste, and the other is to produce almost no nuclear waste. Both are part of the so-called 4th generation of nuclear power plants.
For more details, see below fast reactors and thorium reactors.
Of course, later on, other solutions could be adopted, like taking off-world this waste thanks to ultra-reliable rockets. But for now, it is unlikely that risking to spray nuclear waste over half a continent in case of launch failure will be deemed acceptable.
Nuclear Power Plants Generations
The 1st generation of nuclear power plants were essentially prototypes with no commercial utilization.
The 2nd generation of nuclear power plants represents the bulk of the current fleet. They were built in the 1965-1996 period.
The 3rd generation of nuclear power plants was built following the lessons learned from the 2nd generation and tried to remedy the flaws that led to rare but catastrophic nuclear disasters. They were built in the 1996-2016 period. Sometimes, a 3+ generation is described as the generators built in the 2017-2021 period, with a focus on increased safety.
The 4th generation of nuclear power is only getting started and represents a departure from the previous ones, with a target for new design, concept, and even maybe changing the nuclear fuel instead of incremental improvements.
There is also a 5th-generation nuclear power plant in discussions. These designs are theoretically possible but have not been actively researched. This is usually due to economic viability issues, missing technologies, or concerns about safety.
4th Generation Nuclear Power Plants
What makes a nuclear power plant part of the 4th generation is hotly debated among experts in the industry.
In this article, we will mostly discuss plant design radically departing from the 3rd generation designs.
And we will try to keep the explanation as simple as possible, glossing over some details when needed.
Very-High-Temperature Reactor (VHTR)
This design is characterized by very high temperatures, in the range of 1,000°C. This is the only 4th generation nuclear power plant already operating, with the commercial launch in 2023 of Huaneng Shandong Shidao Bay Nuclear Power Plant in eastern China.
The design often relies on a “pebble bed”, where ceramic spheres small enough to be held in hand protect a core of uranium, with tens of thousands of these spheres in one reactor.
Source: CGTN
X-Energy is also developing a similar technology in the USA.
Because the reaction requires high temperature and is passively cooled, this is a design inherently safer than 3rd generation nuclear power plants.
The advantage of the pebble design is to allow for replacement without interrupting the reactor production, with the ceramic also avoiding any risk of leakage of radioactive material.
Molten-Salt Reactor (MSR)
In these reactors, the coolant is a molten salt mixture instead of water or gas. In some cases, the fuel is also contained in the molten salt.
Molten salt reactors tend to have higher output efficiency, burn fuel more efficiently, and create less nuclear waste. Because they are hotter, they are sometimes gathered together with VHTR into the “thermal reactor” category.
However, a problem with molten salts is that they are corrosive, a problem compounded by the potential weakening of structure by radioactivity. This implies a need for extremely cautious maintenance and checks of the system’s piping, pumps, etc.
Thorium
Since the 1950s, almost all reactors have used uranium as fuel. This leads people to assume that it is the only solution.
But this was actually a mostly political choice, as uranium plants create plutonium. It was seen as a good thing at the time, as it helped nuclear powers to create the material for nuclear bombs.
An alternative with its resource 3x more than uranium is the element thorium. The by-products of a thorium reactor are also very unlikely to be turned into material for atomic weapons.
Source: ACS
Another key advantage of thorium is the possibility of producing up to 100x less waste, at least when using a liquid fluoride thorium reactor design (a molten salt thorium reactor).
Here, China is also leading with a thorium reactor that can run waterless, making it a good fit for desert regions. And with container ships to be powered by a thorium reactor revealed by China State Shipbuilding Corporation (CSSC).
Fast / Breeder / Burner Reactors
Fast reactors rely on “fast neutrons” which are not slowed down by moderators like in classical nuclear reactors. This allows to design the reactor so it can use the fast neutrons to consume elements part of the actinides family (which include uranium and plutonium).
Source: Sciences Notes
Because classical reactor fuel turns into a complex mix of long-lived actinides, this class of elements is the main problem in nuclear waste.
Burner reactors transmute most of the problematic actinides in spent nuclear fuel, making the resulting processed waste less active, 90-98% less voluminous, and problematic for only decades or centuries instead of millennia.
This category of reactors is usually classified according to its cooling system, which can be using gas, sodium, or lead.
While classified as 4th generation, this is not really a new or untested technology. Notably, France’s Phénix and Superphénix burned nuclear waste throughout the 1970s-1990s, before ultimately being closed for reasons of operation costs and political pressure from the Green party.
Modern versions of fast breeder reactors include, for example, the designed but not built PRISM by GE-Hitachi.
Small Modular Reactors (SMRs) & Microreactors
Most nuclear reactors are conceived as the typical large power plants we think of as nuclear plants.
A new type of design is looking to downsize nuclear plants to a size that could be carried by a truck (SMR) or even in a standard container (microreactors).
Source: Nuscale
Overall, SMRs are expected to be used to power the grid or large industrial processes, while microreactors will more likely be used for remote areas, military facilities, and space exploration.
The smaller size and standardized design should also make the adoption of SMRs easier for smaller countries.
Another advantage of SMRs is that they can be produced in series, like trucks or ships, instead of the unique custom design usually favored by the industry. In theory, this should provide economies of scale and cost reduction.
In practice, costs might be higher than expected, at least for the prototypes. This led to a bit of a fall in enthusiasm about SMRs after having maybe become a little overhyped.
Still, SMRs are likely to expand quickly, with for example projects progressing in Finland, Norway, Poland, USA, Canada, and Argentina.
You can read more about the status of SMR technology in our article “Update on SMRs (Small Modular Reactor) – Still The Future of Nuclear Power”
Floating Nuclear Station
While maybe not technically 4th generation, floating power stations are a new concept that provides a radical departure from the usual nuclear power plant concept.
Mostly advocated by Russia’s Rosatom, this concept is different from nuclear-powered ships, like, for example, some aircraft carriers.
Here, the whole purpose of the ship is to be a power station, although a mobile floating one. Due to size constraints, this could also be described as an SMR, albeit a very large one.
Source: Power Technology
The application of these concepts was in the Russian Arctic, powering cities on the coast mostly focused on mining and oil & gas extraction. In this environment, the “waste heat” of the station is not wasted and can be used for district heating.
A broader application could be to bring nuclear power to developing countries without experience in operating nuclear technology. The station can be operated by its manufacturer, and the power is sold to the mainland simply by “plugging” it into the power grid.
The concept could also provide power to islands and remote regions, as well as a quickly mobilized disaster relief system.
For example, Guinea is already looking to work with Russia on such a project.
Westinghouse and Prodigy are also investigating the idea, as well as Korea’s KSOE & Kepco, or Danish’s Seaborg combining molten salt technology with seaborne power plants.
Costs
One last criticism leveraged against nuclear power is cost.
This is largely due to the latest nuclear projects in the USA and Europe having suffered from massive cost overruns. For example, the Vogtle power plant in Georgia ended up costing $37B, of which $20B are cost overruns. Or the €11B Olkiluoto-3 plant in Finland, instead of the initially expected €3B.
The fact that Vogtle took 14y to build and Olkiluoto went into service 12 years after the initial estimate is largely responsible for the ballooning costs.
But this is not a fatality. In the same period, Bloomberg revealed that China built 6 nuclear reactors for only $17B.
The growth in cost in the West is linked mostly to three factors:
- Growing regulatory burden.
- While part of this is due to increasing scrutiny over safety, some have been decrying it as bureaucratic red tape and politically motivated hindrances for the industry.
- Growing cost of capital.
- As nuclear power plant costs are mostly upfront from construction, low capital costs reduce the final price drastically. Typically, Chinese nuclear projects are given access to low-interest loans by the state.
- Too few projects.
- If more plants are built in a row, manufacturers can standardize production and produce equipment in batch or series, instead of one-of-a-kind custom design each time.
- A more steady stream of projects also helps train and retain skilled personnel.
Each of these problems can be solved.
Oversized regulatory burden can be scaled down, capital mobilizing by the government. And more projects and a stable energy policy will rebuild the supply chain.
Nuclear Energy Companies
1. Cameco Corporation
Nuclear power depends on the uranium supply. Uranium is not a very rare resource, although high-concentration deposits are not easily found.
The market is dominated by Kazatomprom in Kazakhstan and Cameco in Canada. Other uranium producers exist, but these 2 are by far the largest and the ones with some lower production costs. As a result, Cameco will be at the center of supplying the raw materials required by existing and future nuclear power plants.
Source: Cameco
However, Cameco’s mining side is just half of the story. This is because, in 2022, Cameco made the decision to acquire majority control in Westinghouse, the leading builder of nuclear power plants in the US, together with a giant investment firm, Brookfield.
This gives Cameco access to Westinghouse’s steady revenues from servicing existing plants and control of a large part of the nuclear supply chain. Due to tight regulations, such parts and equipment will be required for any new power plant, traditional or SMR alike.
A good demonstration of Westinghouse’s innovation potential is its recently revealed AP300 SMR design, which is likely to be deployed in Slovakia, Finland, and Sweden.
So Cameco is both a bet on uranium prices and Westinghouse keeping a solid control on the nuclear plant building market it used to dominate. It should be noted that the co-ownership with Brookfield might also help, as the company has a massive renewable/low carbon power generation division in the form of $19B Brookfield Renewable Partners (BEP).
2. Mirion Technologies, Inc.
Aside from the reactors and fuel technologies, nuclear power generation is highly dependent on many captors, parts, and other “minor” equipment that nevertheless needs to be trusted to work perfectly.
One such category is radiation detection, Mirion’s (USA) core business. Nuclear power regulation requires very tight checkups on radiation exposure of personnel, environment, and the early detection of any potential leak or contamination. The same applies to medical use of radioactive compounds, like cancer treatment and imagery.
Source: Mirion
The company is also active in physical measurements for scientific analyses and research, as well as decommissioning & decontamination devices for the defense industry, cybersecurity, and training services. The company was IPOed in 2020.
Mirion’s revenues have grown steadily, equally carried by its medical segment and its industrial clients.
Mirion is a less “glamorous” part of the nuclear supply chain, monitoring and measuring radiation instead of creating new reactor designs, high-density fuel, or military applications. This does not make it less interesting from a financial point of view.
So, Mirion is more of a “pick and shovel” type of stock that will benefit from renewed interest and investments in nuclear. It will also profit from a still high public skepticism about nuclear power, strengthening the requirements for omnipresent, efficient, and reliable radiation sensors and monitors provided by tried and tested suppliers.
