By Roland Houghton*
Nuclear power is arguably one of the more divisive topics, however, given the global energy crisis, there’s been a shift in sentiment towards nuclear power, particularly as countries look to diversify away from Russian energy dependence.
But if you ask the average Aussie or Kiwi about their view on nuclear, the initial reaction is often one of fear and uncertainty. But if it is so bad, why are people like Warren Buffet investing so heavily into next generation nuclear technology?
Uranium cycle
Uranium is a relatively common material, which is enriched, fabricated into fuel rods that are then used in nuclear power plants.
Source: World-nuclear.org.
Source: Wikipedia.
In terms of energy generation, nuclear accounts for 10% of the world’s electricity and the USA is by far the largest generator. However France is the most reliant, as ~70% of its electricity is generated by nuclear energy.
Now where this all gets very interesting is the supply/demand dynamic we are seeing playing out in the uranium sector. Roughly speaking, nuclear reactors consume 180m pounds of yellow cake p.a. but only ~130m/lb p.a. is mined.
So how does this work?
Well the industry has been in a state of oversupply for years for a myriad of reasons but the key driver really was Fukushima. In an instant, 13% of the world's demand went down overnight and hence, the market went from being slightly oversupplied to very oversupplied. A lot of mines have been put into care and maintenance and after many years of a highly imbalanced market, we are slowly moving to a net supply deficit.
This, below, shows the supply (bars) relative to the expected demand (line chart).
Source: Paladin (PDN.ASX) presentation.
The spot price of uranium is only just recovering (U308 USD/lb).
So what are the key benefits of nuclear power?
It has one of the lowest carbon footprints of all energy generation.
- The use of nuclear energy today avoids emissions roughly equivalent to removing one-third of all cars from the world’s roads. Also, despite only accounting for 20% of the USA’s energy, it accounts for 55% of their carbon free power.
From a generation perspective it’s incredibly efficient and reliable.
- It has a capacity factor of 92.5% which basically means nuclear power plants are producing max power for more than 93% of the time during the year. This is a lot more stable than wind and solar that are subject to weather conditions meaning you can adjust supply in real time.
- Another great stat is that one uranium fuel pallet, about the size of a 50c coin, creates as much energy as 17,000 cubic feet of natural gas, 564 litres of oil and one ton of coal. Put another way, one kg of natural uranium will yield approx. 20,000 times more energy than one kg of coal.
They can also last for decades once built with some plants in the US having had their life extended to 80 years!
What are the key negatives?
Nuclear waste.
- Although undoubtedly a risk, it has been disproportionately amplified over the years. 97% of the waste produced is low or intermediate in terms of its riskiness. Recycling efforts are increasing and in France, given they reprocess a lot of their fuel, only 0.2% of total waste is considered high level waste.
- Now there is no getting away from the fact that high level waste takes 1,000 to 10,000 years to get back to the same level of radiation as when it was mined, however after 40 years of storage most waste declines in radioactivity to one-thousandth of the level of when it was enriched. In addition, newer technologies are significantly reducing waste produced.
The risk of a nuclear meltdown.
- The Chernobyl meltdown will forever highlight the risk of a complete, uncontainable nuclear meltdown. This led to thousands of deaths and radiation risks still to this day. The 2011 Fukushima meltdown, triggered by the tsunami, has not caused any deaths nor adverse side effects, but the clean-up is estimated to take up to 40 years and radiation was released into the ocean.
- Newer technologies have materially increased the safety of global nuclear reactors and each negative event has seen significant steps forward in the safety of these reactors. Nonetheless there will always be a risk, however large or small, of a meltdown when dealing with nuclear power.
The risk of nuclear waste being weaponised.
- Nuclear waste has never fallen into the wrong hands however as we are seeing in Ukraine, nuclear facilities can become military targets. Its important to note these facilities are designed to withstand bombing and terrorist attacks.
The cost.
- Nuclear is very expensive to build, costing billions up front and taking years to complete construction. The actual operating costs post construction are very low and a lot of research around reducing construction costs is occurring.
Source: OECD Nuclear Energy Agency.
There are plenty of fascinating recent developments in nuclear, from Bill Gates and Warren Buffet spending billions on a nuclear reactor in Wyoming, to an Exchange Traded Fund called Sprott that’s hoovering up uranium on the spot market, to the European Union considering including nuclear in its taxonomy – essentially labelling it as green energy.
Whatever one’s stance on Nuclear; 2021 delivered a new record for the amount of coal burnt globally, highlighting the desperate need for new energy solutions. Hence, alternative energy sources will continue to gather momentum globally.
*Roland Houghton is an investment analyst at Milford Asset Management. This article first appeared here and is used with permission.
78 Comments
" Nonetheless there will always be a risk, however large or small, of a meltdown when dealing with nuclear power." Pebble bed tech, by design, does not melt down.
"Each pebble has an outer layer of graphite and contains some 12,000 four-layer ceramic-coated fuel particles dispersed in a matrix of graphite powder. The fuel has high inherent safety characteristics, and has been shown to remain intact and to continue to contain radioactivity at temperatures up to 1620°C - far higher than the temperatures that would be encountered even in extreme accident situations, according to the China Nuclear Energy Association (CNEA)."
https://world-nuclear-news.org/Articles/Demonstration-HTR-PM-connected-…
The general populace have an uninformed and frankly immature opinion on nuclear energy in its current form, and of its potential. The number of deaths directly attributable to the coal industry is orders of magnitude higher than nuclear. I don't think it'll ever take off in NZ because: high initial costs, earthquakes (shaping opinion), and culture.
.. for some reason , the ban on US warships carrying nuclear weapons ... weapons of mass destruction ... morphed into a hatred of all things nuclear ...
If we want a de-carbonised future , we need nuclear power plants ... one small reactor based near Orc Land would free up much of the south island's hydro electricity for better purposes , such as producing green hydrogen to power our nations vehicles ....
No need to thank me , NZ for solving your " emissions " problem ... I know I'm a fricking genius !
GBH,
Now let's see. Years taken to convince the public, say 10. Years taken to pick an appropriate site, say another 10. Years taken to obtain resource consent, at least 10. Years to have the Chinese build it, say 10. So with luck, it could start to produce power around 2060. If the initial cost was put at say $10bn, then with the usual cost overruns and design changes, it might end up at say $30/40bn. I think I am being too conservative here. I have seen a figure for the light rail project of $29bn, so a nuclear power plant might cost us a $100bn. No problem.
Northland is the best place to build in NZ. It is tectonically stable being furtherest away from the Pacific-Australian plate, the Northeren Wairoa River is a great source of cooling, and it is proximal to Auckland our largest power user, as well as not too far from Whangarei and Hamilton. You could even float the building materials straight up the river.
Who will pay for this mini reactor? Is anyone selling mini reactors?
Is it cheaper then hydro, geothermal solar or wind?
Who ships spent material and pays for reprocessing and the security. The shipping would need an armed escort.
They won't build one in Auckland so where will they build it.
Just the cost alone of actual power plants producing electricity should be enough to know they are incredibly expensive compared to renewables.
You can design a closed cycle system so you don't have to store waste products. All of the products then would decay to safe levels within 300-500 years.
To me though I think the future is likely Thorium will be the future because you get the advantage of a closed cycle without having to deal with Plutonium (and you never, ever, want to deal with Plutonium!) Almost every country with reactors is looking at Thorium reactors.
How many years will your unicorn reactor be productive? Do you have an example? Not Germany they are going renewables as they are a proven technology. The only thing for sure with a nuclear is only Governments can afford to back them. Too expensive and too many unknowns. Just build solar panels, batteries and recycling centers here in sunny NZ before the climate changes.
Nuclear power plants in outback Australia is one thing. Nuclear power plants on the tectonic plate boundary that is New Zealand is another thing entirely. Remember no one saw the Canterbury earthquakes coming. Can you imagine if a nuclear plant had been in the Red Zone? We'd be dealing with our own Fukushima. For this reason I'm not opposed to nuclear where the risk is low, but I am opposed to nuclear power generation in NZ.
The Fukushima nuclear power plant was not built correctly to withstand an earthquake ... the engineers stuffed up ... same with 3 Mile Island & Chernobyl ... human error ... poor design , cost cutting on safety .... not so in France , Belgium , Germany ... 100 % safe when it's done right ...
It is a wonderful idea. Can you imagine universities cutting teaching positions and knocking student accommodation down, AT reducing it number of PR spinners, Albany being converted back to strawberry fields, the Bee Hive with only 50 MPs, wide empty motorways, reducing the number of Super Rugby teams (drop the Blues first), schools with spare classroom to be used for private study, ships taking our spare cars to Asia.
There is a huge difference in safety between past and future designs. There should be a prize created where countries around the world pledge to purchase reactors based on certain metrics of performance, safety and cost. If every country pledged then the size of the prize could be trillions. This would incentivise massive invest at zero risk for those countries because they would only have to pay if the technology could meet those cost/performance milestones.
No mention of all the uninhabitable area around it or the pollution into the ocean . The risk would be acceptable if contained within the country that owned the plant however neighbouring countries carry equal risk eg a plant in Victoria Australia fails nz wiped out .
Chernobyl affected a huge area with fallout affecting agricultural production in the uk and Scandinavian countries , how do you think our pasture grazing system would cope with radioactive fallout from oz the smoke from ozzie fires shows how it would drift to nz .
having some radiation affected areas would obviously have a negative effect (some lamb in Wales and Scotland is still not allowed to go to market after Windscle/Chernobyl) but it wouldn't "wipe us out" and would be very unlikely to cover the whole country. There'll probably be more radiation coming from Huntly coal waste than a potentail accident in Aus https://www.scientificamerican.com/article/coal-ash-is-more-radioactive-than-nuclear-waste/
... the problem is that the best solution to fossil fuel usage is being ruled out as " unsafe " ... when that's patently not true ... nuclear power stations are incredibly safe .... France has proven that for 50 years .....
Which leaves us with second rate options : wind , tidal , more hydro , solar ...
The only groups stupid enough to invest in nuclear are government backed. Because of the costs. Taxpayers pay for security clean up accidents.
If you want to make money your investing in offshore wind, solar hydro storage dam's and geothermal. And battery manufacturing and recycling.
I am sure the people having lost there homes as a result of Fukushima and Chernobyl will be comforted by the realization that coal ash can be just as radioactive. Nz relies on milk powder as a mainstay of it's export economy as well as other ag products, I doubt radioactive milk powder and kiwifruit etc would be a good marketing ploy , nz economy wiped out as I said .
... why remain so pessimistic , when the article clearly shows that nuclear reactors are very safe , the byproduct is quite small ... and the energy return is astronomical compared to fossil fuels ... clean green nuclear power will prevent millions more tonnes of CO2 from being emitted into the atmosphere ... and that is the goal , right ?
Blind optimism is not the answer either all motor car manufacturers would also say their product is safe , but then you put human drivers in them and accidents happen. Agreed decarbonisation should be the aim but not at the expense of safety in replacement technologies.
... the statistics of deaths annually in Chinese coal mines is astronomical ... not to mention , the millions of tonnes of CO2 belched into our precious atmosphere when that coal is burnt ...
Forgive me for being emotional , but I prefer that the air I breathe & live in be 100 % safe ...
... nuclear power helps us remain 100 % pure ...
Gummy Bear - it takes about 300 mg of Cs137 evenly distributed over one square km to make the land uninhabitable for all of time as far as humans are concerned. 300 mg is the weight of asprin in an asprin tablet. Most spent nuclear fuel pools have about 900 kg of Cs137. Accidents happen and entropy always wins. We've had about 1 reactor meltdown every ten years since the inception of nuclear power. It's still unsafe to eat some mushrooms in Bavaria because of the Chernobyl disaster.
Consider the inverse square law in relation to radiation dosage, and consider that in the context of an inhaled hot particle lodged in the epithelial lung tissue. The mechanism of DNA damage is obvious. The outcome of increased cancer from radiation exposure is obvious.
Fukushima was the worst industrial catastrophe in the history of mankind. It will sow the seeds of cancer induced misery and death for millennia. I feel sorry for the people of Japan. They're living a nightmare which they'll never wake up from.
according to my back of a fag packet calculation...
300mg Cs137 is about 1 terabecquerels worth of radiation.
but in dose terms about 56millisieverts/hr but that's as a point source and close by, not distributed over 1km2 and attenuated by soil factors...and not spread out over time, so it would be more like in the micro sieverts/hr range at most.
given that a flight can be as much as 50micro sieverts I can't see how 300mg of Cs137 would render land "uninhabitable", but maybe my numbers are wrong...?
http://3.bp.blogspot.com/-7_AR_x2KsVc/TYZxG20r2oI/AAAAAAAAHF8/fdKmlXTeLx0/s1600/radiation.png
https://www.pnas.org/doi/10.1073/pnas.1112058108
100,000 and 10,000 MBq km-2 is considered "extensively contaminated". So 1 TBq km-2 would therefore be 10 to 100 times worse than "extensively contaminated". I think that fairly equates to uninhabitable.
The Swiss had the right idea, build the reactor underground so if there is an accident you can contain it:
Nuclear in my view is not a good option in NZ due to high risk of natural disaster as well as better green options (mainly because we are blessed with more hydro energy than we need or want to develop but also geothermal and wind, solar etc).
Certainly it would be good in a place with a dirty grid like Aus, free from earthquakes and volcanoes, with lots of empty space. Would provide good base load generation.
If the technology gets to the stage where a new reactor can be built quickly and cheaply then they will be put on ships. The ships will be moored at whichever city bids highest. It might be a return to collier vessels - the first recorded one being Newcastle to London in 1306. Auckland might need a mobile nuclear power station someday.
Geothermal seems to be a good option to explore. Especially when talking of zillions capital for nuclear.
What has not been accomplished is the ulra deep drill. 20K down - further than humankind has been before. Which means you could put it most places, not needing to find a surface field.
Plenty has thought of it, I guess our lack of capital and short term thinking means nobody has done it.
What do you mean you cant shut them down? You just lower the boron rods right down and poof, power station no longer generates electricity...
But the whole point is they are reliable base load that can be powered up or down in a relatively short amount of time with no additional costs.
Alternatively you build a Bitcoin mining opperation right next to it to use the additional power (and start using it before the line infrastructure has been completely built out), and if the grid needs more power instantly, you just turn off the mining machines.
Just like is being done all over texas currently.
I love Nuclear but NZ doesn't need it. The smallest plants are too big for us as a base load, and our preponderance of other renewal options skews the equation. There's also the well known natural disaster risk.
Australia on the other hand should be building them hand over fist.
Why is nuclear fission always a miracle cure to help decarbonise and yet it has failed utterly to dominate the energy sector since the 1960s?
Ultimately nuclear is a fancy, expensive and dangerous way of boiling water. The waste disposal issue has never been solved and high build costs and delays mean it will never be a major part of solving the climate crisis. Other forms of renewable generation are already far cheaper and more proven.
Capacity factor seems to be a selling point of nuclear, which is completely backwards. You have an inflexible generation asset that can’t throttle and is critically dependent on a source of cool water. Several years ago during a European heatwave I recall that many nuke plants had to turn off because the river water increased in temperature a few degrees and the reactor couldn’t cope.
Fusion is even more amusing - always being “20 years away”. We already have a fusion reactor in the sky called the Sun and it already powers the entire planet.
Germany will be 100% renewables by 2035. UK latest reactor over budget and set to produce expensive electricity because of costs. The government needs to invest in power production, let's invest in our own creat jobs and cleaner power. Hydro, geothermal, solar and wind. Let's build theses systems not import them.
As for the waste the article doesn't explain the back log of spent reactors waiting decades for decommissioning.
Everything has disadvantages or cons though. The main problem of this would be the earthquake.
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