Changes are taking place in the industrial world that will shape the future of the nuclear industry. The nuclear industry must respond to the Fourth Industrial Revolution which is taking place in Europe and Asia and will soon influence the U.S.
While some innovations that are taking place outside the industry will present challenges to the process of designing a new generation of nuclear reactors, others will present opportunities. Success will more likely come to those developers of advanced nuclear technologies who can grasp the important factors that are shaping it.
This article has two important parts – first, a review of an analysis by MIT’s Richard Lester about the future of conventional light water reactors, and second, a prospective analysis by this blog about factors that will lead to new development paths for advanced reactors and the factors which may help them achieve success.
On December 20, 2015, MIT Nuclear Scientist Richard Lester sent a note to correspondents about a new article he published in the Winter 2016 edition of Issues in Science & Technology. Titled, “A Roadmap for U.S. Nuclear Innovation,” it covers an ambitious agenda.
Lester writes, “a greatly expanded role for nuclear energy will be needed if the world is to have any chance of avoiding the worst consequences of climate change. Some of us have also concluded that without significant advances in nuclear reactor and fuel cycle technologies — advances yielding cost reductions, shorter cycle times, a greater focus on passive safety, and other improvements — nuclear is unlikely to play that role.”
Lester then proceeds to layout a broad, three phase plan for innovation of nuclear technologies.
- First – extend the operational lifetime of the existing fleet. Innovation focuses on cost control and efficient operation. It covers the current era to the end of the 2030s.
- Second – build a new, expanded fleet, primarily of large and small LWR reactors, and bring to commercial deployment advanced nuclear technologies for use in power generation, but also desalinization, process heat, and production of fuels for the transportation sector. It begins in the 2030s and extends to the end of this century.
- Third – develop a second generation of advanced nuclear technologies in the post 2050 timeframe to broaden their use globally.
Lester’s paper is an easy read, but it takes some time to absorb all of his ideas which generally are on the mark in terms of laying out the equivalent of a nearly century long vision of how to achieve deep cuts in carbon emissions with the substitution of nuclear energy for fossil fuel power.
A review of the paper by Rod Adams, publisher of the Atomic Insights blog, is a good starting point for examining Lester’s ideas in detail.
Adams writes, “Dr. Lester’s piece is both hopeful and challenging; he foresees the possibility of large contributions to our future energy supply from emission free nuclear energy, but he also notes the very real possibility that the United States will be a laggard instead of a leader in the field.”
Adams has taken the time to pose significant questions about Lester’s more or less linear view of innovation over a 50-75 year time frame. It is worth your time to read it. Read Prof Lester’s paper in its entire length as it is an excellent organization of information and analysis of the barriers to innovation and how to take advantage of the opportunities ahead.
Innovation does not take place in a vacuum
My view is that while Lester’s expert voice needs to be heeded by policy makers in Congress, and in federal agencies like DOE and NRC, the innovation he seeks does not take place isolated from other economic and technological factors. A good place to start in understanding these change factors is with the founder of the World Economic Forum, Klaus Schwab. In December 2015 he published an important article, accessible to generalists, about what has come to be called the “Fourth Industrial Revolution.” It follows three revolutions which came before it.
- The First Industrial Revolution used water and steam power to mechanize production.
- The Second used electric power to create mass production.
- The Third used electronics and information technology to automate production.
- A Fourth Industrial Revolution is building on the Third. The digital revolution that has been occurring since the middle of the last century. It is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.
These are the factors that the nuclear industry needs to take into account. Schwab asserts:
“The speed of current breakthroughs has no historical precedent. When compared with previous industrial revolutions, the Fourth is evolving at an exponential rather than a linear pace. Moreover, it is disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance.”
Why the nuclear industry needs to pay attention and act
In my view the global nuclear industry, with few exceptions, is firmly rooted in the second industrial revolution, and only within the past decade has it begun to move into the third with the successful implementation of digital controls for nuclear power plants. It’s facing new challenges that may strand it permanently in that position.
One of the key reasons is that most of the US fleet is at least 40 years old and most of the units are on their first 20-year license extension. These plants were built in an era when regulated markets and a more robust economy offered returns on capital to utilities that justified multi-billion dollar bets. The economic foundation for their existence has shifted beneath them. The boom and bust of the brief so-called “nuclear renaissance” of 2006-2009 was caused by what turned out to be a temporary spike in natural gas prices.
Deregulation of electricity markets has put these nuclear power stations at a competitive disadvantage. Older plants acquired from their original owners for their values as cash cows are being closed due to the record low prices of natural gas.
Also, as maintenance costs rise with age, they eat into profits causing utilities to shut down plants that are in otherwise serviceable mechanical order and able to comply with NRC safety regulations. These include upgrades to safety measures resulting from lessons learned about the Fukushima disaster in Japan.
Technological innovation to bring to market small modular reactors (SMRs) that don’t bet the company financially, and projects to design new, fast reactors, are taking place. Despite over three dozen developers of advanced nuclear technologies having been made visible by reports published by the Third Way think tank, the industry is unprepared for the disruptive changes to industrial production and management, and government oversight and regulation that will be associated with the Fourth Industrial Revolution. It’s not alone.
Schwab, in his role as the organizer of the World Economic Forum, is in a unique position to take the pulse of the global business climate. He writes:
“In my conversations with global CEOs and senior business executives it is that the acceleration of innovation and the velocity of disruption that are hard to comprehend or anticipate and that these drivers constitute a source of constant surprise, even for the best connected and most well informed.”
Major suppliers to the nuclear industry, like Siemens and Fujitstu, are taking notice and have begun to try to understand how these factors will affect its business in global markets. They play in global markets and are bringing to bear advanced manufacturing visions (Siemens slides PDF download) that are significant for the major vendors of nuclear technologies.
It’s not just about design and production of consumer durable goods like cars and refrigerators, nor it is just about home applications of the “Internet of Things.” Devices like smart thermostats, or refrigerators, in home, and machines in factories, will have impacts all the way back to how a reactor supplies electricity to the grid when faced with the aggregate demand of millions of smart devices constantly adjusting their demand for power. Utilities can no longer meet these demands with a “one size fits all” business plan.
How the nuclear industry can respond to the Fourth Industrial Revolution
There are four main sets of impacts that the Fourth Industrial Revolution will have on the nuclear industry.
- Customer expectations – when a utility wants to add a nuclear reactor to its fleet, it will have to take into account radical changes in the way electricity is bought and delivered to customers using digital platforms that reshape traditional markets.Sharing the grid with highly variable renewable energy sources will be an important requirement. It’s possible that a utility might seek economies of scale by co-locating small modular reactors (SMRs) with wind and solar installations to be serviced by common switch gear and other grid infrastructure to save money and to lessen surface environmental impacts.
- Suppliers of turbines, generators, and switchgear will be among the first to see the possibilities of these market opportunities. Developers of I&C control technologies for reactors need to be working now if they are to also reap the benefits of these opportunities. Industry organizations that convene technical groups on reactor management and control methods and procedures cannot allow their work to stagnate in the face of these rapidly developing changes caused by technology innovation.
- Product enhancement – using prof. Lester’s timelines, the next generation of nuclear technologies could reach commercial markets early as the 2030s. SMRs could be having impacts on global markets even earlier by the latter part of the 2020s.
- Digital technologies will be basic elements of these products and designing for security upfront, for generating facilities and the grid, will be a necessity and not a regulatory afterthought. Development of resilient grids composed of base-load sources, including SMRs, as well as full scale reactors, and renewable technologies, will become a mainstay of the utility world supported by controls using digital technologies. The NRC and the industry will need to find methods for using a single control room to manage multiple SMRs and in some cases, remotely, to assure the stability of resilient grids.
- Collaborative innovation – utilities, as customers of innovative developers, will not be content to wait 20 years for DOE national laboratories to kick R&D projects out of their sandboxes. The business paradigm of time to market for useful innovations will produce a demand factor that will drive utilities to try to get early, hands-on, looks at innovative reactor designs.
- The Chinese government is already doing this with TerraPower’s Traveling Wave project. It will jointly fund development of a half scale (500 MW) prototype with plans for a first-of-a-kind commercial unit within 15 years. The Russian government recently put its BN-800 fast reactor on the grid with plans to build a 1200 MW design learning from the experience of this one. The US, as Prof. Lester notes, is lagging behind. What will it do to catch up?
- Organizational forms – the current regulatory model used by the US Nuclear Regulatory Commission of developing regulatory paradigms in “top down” policy making models will need to be revamped through much greater and earlier consultation with nuclear technology innovators.The current model of not paying attention to new ideas until a customer signs a contract will push developers overseas to the detriment of the US economy through lost high value manufacturing jobs.
- The NRC can and should begin a process of reinvention that supports early and broad-based organizational learning. It can do this by creating a unit within the agency that provides it with a “foresight” capability focused on technological innovation that is in constant communication with innovative developers of new nuclear reactor and fuel technologies. It should do this not because every developer is likely to succeed, but so that it can be ready for the ones that do achieve technological progress toward bringing new designs to market.
Prof Lester’s linear view of nuclear innovation could be enhanced if it takes the factors that make up the Fourth Industrial Revolution into account. In Europe and Asia a number of leading firms are already doing this.
“Overall, the inexorable shift from simple digitization (the Third Industrial Revolution) to innovation based on combinations of technologies (the Fourth Industrial Revolution) is forcing companies to reexamine the way they do business. The bottom line, however, is the same: business leaders and senior executives need to understand their changing environment, challenge the assumptions of their operating teams, and relentlessly and continuously innovate.”
The question for the nuclear industry, is whether its suppliers and customers can step up to these challenges.
Readers are invited to submit their own visions via comments of how the nuclear industry should respond to these challenges.
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