The new nuclear renaissance - real or rhetoric? | Special pre-ADIPEC preview episode

0:04Hello and welcome to The Energy Gang, a discussion show from Wood Mackenzie about the fast-changing world of energy. I'm Ed Crooks, and this is the second in a short series of special episodes looking ahead to the ADAPEC Energy Conference in November. And in this show, we're going to be talking about nuclear power. There is huge excitement over nuclear at the moment. Everyone is talking again about a nuclear renaissance. In fact, I saw someone the other day calling it the last nuclear renaissance. We might want to talk a bit later on about why that is. Of course, the reason for the excitement is very familiar, the turbocharged progress of AI.

0:36It's creating expectations of a surge in demand for electricity. And if we want to meet that demand with low emissions, there aren't all that many options available. And nuclear power surely has to be one of them. So to talk about the prospect for nuclear power and whether it can play a big role in meeting the challenge of rising demand growth, I'm joined by Dr. Samar Bilbao-Ileon, who's the Director General of the World Nuclear Association. Hello, Samar. Welcome back to the Energy Gang. Great to see you again. Hello, Ed. It's lovely to see you again. It's been a while, but I'm glad to be back here.

1:04Yes. ADAPEC 2025, the world's largest energy event, returns to Abu Dhabi this November under the theme Energy Intelligence Impact. More than 1 ,800 speakers and 205 ,000 attendees come together to address a dual imperative, strengthening today's energy systems and scaling intelligent solutions. Join us in Abu Dhabi from the 3rd to the 6th of November to explore how the convergence of energy, AI, investment, and emerging economies is advancing global progress. Register now at adipec.com. Yeah, exactly. It was a couple of years ago, wasn't it? I think we last spoke during COP28 in Dubai back in 2023.

1:43Feels like quite a bit has changed since then. Is the world very different? I mean, in particular, I think I don't know that we talked about AI at all during that last conversation we have. And now, of course, it's everything that everybody wants to talk about at the moment. But I mean, how do you see it? As I say, how is the world different now from when you were last on the energy gang? Well, you know, I think that COP28 in Dubai was really a turning point, if I may say, for nuclear energy. I mean, this was the first time ever we had 199 99 countries that are signatories of the Paris Agreement that included nuclear energy as one of the tools that are going to be essential to meet climate goals.

2:29This has never happened before. I mean, we discussed this briefly, but this change is like it's not only countries. So now we have 31 countries that are committed to tripling global nuclear capacity by 2050. But now we have been able to bring together also global banks and financial institutions that are willing to support this nuclear growth. And very importantly, and of course we will discuss about this, the energy users. AI, of course, but not only AI, they are very much aware and recognize the essential role of nuclear energy to provide abundant, affordable, 24-7 carbon-free generation. at a global level, really.

3:15We are seeing that, number one, the essential role of nuclear today and for the last five decades is recognized, and the need for additional nuclear is also recognized. Yeah, absolutely. And just, incidentally, for the benefit of listeners who might not be familiar with the World Nuclear Association, just to explain what it is you do. I mean, essentially, I think of it as the International Industry Group for Nuclear Power. Is that right? Exactly, yes. So we are the international body that represents the global nuclear industry. So our members are, as you said, companies, organizations throughout the entire value chain of nuclear, and I think that makes us quite unique.

3:55So we have members that are mining, uranium mining companies. Obviously, we have operators, we have vendors, we have designers. We also have companies that are looking at use nuclear fuel or nuclear waste or decommissioning or nuclear liability or nuclear transport, you know, the entire ecosystem of nuclear. And also, very importantly, as you said, we are the global nuclear industry, so we have members in 44 countries in all continents, so that makes us quite unique. I mean, so part of our job is really to bring the industry together and to share best practices and learn from each other, but also, noticeably, our job is to actually work with external stakeholders, with the energy community, with policymakers, with financiers, to create, you know, understanding and a really positive predisposition to the role that nuclear energy may have in future energy systems.

4:58Right. So, as you were saying, there is now a lot of focus on the role of nuclear as dispatchable or baseload 24-7 power that can be available at all times and also has very low emissions. And I think it's fair to say that some of the challenges and issues with other low-carbon technologies have kind of come into focus. Think about Spain being in blackout earlier this year, and obviously still a lot of uncertainty, a lot of arguments over what exactly caused that. But definitely one of the things people are talking about is the significant role of variable renewables on the Iberian grid as possibly a contributor to that.

5:43So you have, as I say, I think that that focus on 24-7 generation very much back in the spotlight. Also, as you say, talking about the customers, tech companies and data center operators in particular. Again, there's a lot of debate over this issue, but on the whole, it seems to be the case that data center operators want those facilities to be running around the clock. And to an extent, they can be flexible, and it's probably very good for the grid if they can be flexible, but they can't always be flexible. And when they can be flexible, it's only to a limited degree. So as you say, all of that then puts a real focus on nuclear power right now.

6:25I suppose one of the things that I think about though with this whole debate is how much of it is just a debate and how much is kind of something that people are talking about and discussion of the theoretical advantages of nuclear power and how much we really seeing in terms of investment decisions being made capital being deployed steel and concrete being put in the ground and so on because it still feels like there are some very big challenges to actually getting, as you say, that significant increase in nuclear generation capacity that a lot of people think is needed? Well, no, I definitely think that there is much more action than wars in nuclear right now.

7:10So let me just break this in maybe two sides, but they are very important. So number one is making the most of the existing fleet. So right now, we have over about 400 gigawatts of nuclear energy deployed throughout the world in 33 countries. And actually, the perhaps good news is 2024, nuclear generation was the highest generation ever for nuclear. So we continue to raise our bar, our own bar, if you wish. So there is a lot of emphasis on that, a lot of investment that is taking place there. So number one, we are seeing that most countries, if not all, I mean, I have maybe one exception, that it would be my native Spain for now.

8:00But other than Spain, what we are seeing is that every country that has nuclear power plants today is doing what they can to extend the life of these units for as much as feasible. In the U.S., we are seeing units that are already licensed for 80 years. And we are also looking at, I mean, they are already starting to look at licensing these units for 100 years. But same is happening in other countries, in Japan, in Europe, and in Asia. So this is not a U.S.-only trend. Another thing that is happening everywhere is lots of investments for up rates. Abrex means extracting more energy from the existing fleet.

8:43And these are real, real investments. And last but certainly not least, we are seeing enormous investment in repowering units that have been prematurely shut down. And in these cases, this is intimately tied to AI. So you know the very momentous agreements between Constellation Energy and Microsoft in the U.S. to repower Three Mile Island, what is now called the Chris Crane Clean Energy Center. So this is a unit that has been prematurely shut down and is going to be brought back up into line, mostly not exclusively, but mostly to power Microsoft. And we are seeing this in Palisades. We are seeing this in other different units in the U.S.

9:30To me, that is the first thing. And this is actual real investments. Look at the billions of dollars that Canada has invested to refurbish all their nuclear fleet. Essentially, the entire Canadian nuclear fleet is going to be available for 60 more years. So that's the first thing. Now, there is the new power plants. So to me, there is a little bit of a difference between the OECD countries where unfortunately we are a little bit running catch up, if you wish, versus other parts of the world that have been deploying nuclear power plants at speed, on time, on budget for a few decades now. So as you know, in Asia, we have double nuclear capacity in the last 10 years.

10:16So this is China, this is Korea, this is India, this is Bangladesh, real reactors that are currently operating. And then we have successful stories, as I said. So Bangladesh is going to go from 0 to 10 percent of their power in less than 10 years. The United Arab Emirates just did it. They went from 0 % to 25 % of their power, of their electricity, in less than 15 years. And then we are seeing similar success stories that will be visible to everybody in Turkey, in Egypt, in other parts of the world. We are seeing real projects in the Czech Republic, in the UK, in Sweden. Netherlands is moving very quickly.

11:02Some real projects in the US, certainly in Canada. So some of them are large reactors, some of them are small modular reactors. I mean, I think that perhaps we really need to accelerate, but things are really starting to happen, and they are real things, real financial investment decisions. Right, and you mentioned small modular reactors, and I want to come back to those in a moment. Before I do, though, do you have an explanation? Does the global industry have an explanation for why it is that it is apparently so hard to build new nuclear power plants on time and on budget in the developed world, essentially.

11:42When, as you say, many other parts of the world, nuclear programs have been proceeding rapidly. But in the United States and in Europe, the few projects that have been embarked on have fallen well behind schedule and have gone way over budget and really jeopardize the economics of those investments. and then when people say, well, there are alternatives available, whether it's renewables and storage or natural gas or whatever it might be, those seem like more compelling options than nuclear. Do you have a sense of what the underlying problems are? So, no, this is a TR problem. And this is a problem that we have in oil city countries, North America, Europe, primarily, perhaps not only, but primarily.

12:27I mean, the reality is that in many occasions, we have eroded our capabilities to deliver large energy infrastructure projects. I mean, this is incredibly visible when we are talking to nuclear, because, I mean, frankly, if you look at this in the Western world, we do one nuclear project every 10 years. So clearly we almost have to reinvent the wheel almost from scratch every time. But this is not only true for nuclear. I mean, you know that there are many other large energy infrastructure projects in OECD countries that are not being delivered on time or on budget. So I think that what we are trying to do and from where we stand as a convener of the industry, we are trying to support the industry to actually reveal those capabilities.

13:17There are many pieces to that puzzle. Certainly, supply chain industrial capabilities is something we are working with the industry. to not only rebuild them, but to make sure that we move from individual projects to programs. So once that we have these capabilities revealed, we actually continue to deploy them over and over and over again. I mean, you know, if you have one project every 20 years, clearly those workers, those companies that provide the supply chain, they move on and they do something else, right? So it is important, and this is part of the world that we are trying to do, to make sure that we are talking about programs, about ends of a kind.

14:01So not one nuclear power plant every 10 years, but 10, 20 per year. So that would be a different thing. And then, of course, there are things like workforce. So once again, I mean, when there haven't been opportunities in the nuclear industry as a whole, well, there hasn't been people that move forward with nuclear careers. So we are working on that area. And then there are other things that are also very important. So licensing. You know that there is very robust, very, well, very programmatic programs to license and deploy and regulate nuclear power plants. We really are working with regulators at a global level, and regulators are working among themselves to streamline and to optimize the way we license and regulate these units.

14:54So it's not one of a kind every time, but do this much more continuous manner. So these things are happening. We are not there yet, okay? So, you know, we've had some projects that have successfully deployed in OECD countries, but clearly we are not in the end-of-a-kind delivery mode yet. Yeah, so let's talk about SMRs then, which are proposed by quite a lot of people as a solution to some of those problems you've just been talking about. And as the name suggests, so the individual reactors are small, smaller than the reactors you might get in commercial kind of nuclear power plants in use today.

15:36They're modular in the sense that you'll have individual units that you can put together and you can build up. So the actual, the total plant overall could be pretty large, but it's composed of number of modular units. So people say, well, what this means is you can get a lot of the work done on the reactor in a factory before you deploy to the site. So things can be kind of pre-built in more controlled conditions. And again, you can get to that repeatability, get to multiple reactors being built to the same design, which means you can get all that learning by doing, and you can get down the cost curve as you benefit from economies of scale, and so on.

16:16Those are then, as I see it, the advantages that people talk about. The disadvantages then are that there's a large number of different technologies still out there, a lot of different ideas for SMRs. The ones that people are talking about, some of them haven't even been licensed. A lot of the designs have not yet even been licensed for operation yet. Some have been, but it's still quite early days in general in the industry. And even the ones that have been licensed are still going to be new technologies, and you're still going to encounter a lot of those first-of-a-kind type issues when you're trying to put together the first of these plants using SMRs.

16:54What's your sense of it when you think about the potential for the SMR industry and how significant a contributor it's going to be to the growth of nuclear power globally, how big a role can it play? You brought up many very interesting... I am, sorry. No, no, you did touch exactly on the right points that I think is important to explore. So the first thing that you said that I think is incredibly important that your listeners understand is SMRs, what is different about SMRs is not necessarily the technology. is the delivery mechanism. So what is important about the CMARS is not necessarily the size, it's the fact that, as you said, they are going to be standard design, they are going to be manufactured, not built, manufactured for the most part in a factory.

17:46And basically the idea here is to do this in an economy of series. We benefit from that economic principle. and essentially, literally put this reactor in the back of a truck and send it to wherever it is that is going to be deployed with minimum civil infrastructure work. I mean, it's clearly not zero, but minimum, almost if you wish, plug it in and start operating. I mean, I am exaggerating a little bit, but you realize the paradigm is significantly different. That difference is what is going to make SMRs an important piece of the offering of nuclear energy. And there are many applications in which that particular offering is going to be essential.

18:35We've talked about AI and technology providers and hyperscalers and all those where this alignment of these small modular reactors and a data center may be very good. But there are many other applications. I mean, there are distributed grids or smaller grids or remote locations without an overall grid where this could be very special. Or there could be unique applications, for example, industrial centers. You can use not just the electricity, but the steam, the heat that these reactors are producing to power, you know, the metallurgical industry, the petrochemical industry, ceramics, many other things.

19:21That is a little bit what makes these reactors potentially a game changer. So you did say, and this is very true, right now there is, I don't know what is the latest number, 70 perhaps more different reactor designs out there. I know many of these reactors or all these reactors are incredibly exciting and they provide many potential advantages. But being realistic, I do not personally believe that we are going to see 70 SMRs deployed. I think that we will see a handful, perhaps 10 different reactor designs that are going to be the first deployed. And if they do this deployment, as we said, on time, on budget, successfully, we are going to truly see this handful or 10 reactor designs to actually hit the end of a kind very, very quickly.

20:16And then among those, I see different levels of speed. So many of these reactors are really watercooled reactor designs that frankly are no different than the current reactors that we are talking about. So these are the reactors that are already operating in Russia, in Pebek. We have the reactors that are about to start operating in China in a couple of months. I mean, we expect before the end of this year. This is the reactor that has started to be built in Ontario, in Canada. and this is some of the reactors, I mean, the UK, Rolls-Royce, or I mean, in Poland or UK. So these reactors, yes, the delivery mechanism is different, but the technology really is no different.

21:02The fuel that they use is no different. The pumps, the pipes, the bulbs, everything in these reactors exists. But then we have a second wave, if you wish, of other reactors that are a little bit more innovative. So there are perhaps gas-cooled reactors or molten-sold reactors. Again, not new technology. We have operated these reactors at least in a prototype stage earlier in the nuclear history, but we've never deployed or not often were deployed on a commercial basis. So this is where I think that we are going to see these reactors deployed perhaps in the early 2030s on a more end-of-a-kind basis.

21:48So we will see prototypes before the end of this decade. But then the true, you know, where the rubber hits the road will be in the early 2030s. So that's what I really think that we are going to see. This episode of The Energy Gang is brought to you by ADAPEC 2025, the world's largest energy event returning to Abu Dhabi from the 3rd to the 6th of November. Under the theme Energy Intelligence Impact, ADAPEC brings together the entire energy ecosystem to address a dual imperative, strengthening today's energy systems and scaling intelligent solutions that advance global progress. More than 205 ,000 attendees and 2 ,250 exhibiting companies will gather to exchange ideas, forge partnerships and mobilize investment, showcasing solutions that deliver energy to more people, more affordably and with lower carbon intensity.

22:36Across 380 sessions, over 1 ,800 expert speakers will explore how the convergence of energy, AI, investment and emerging economies is reshaping markets and driving opportunity worldwide. Join us this November in Abu Dhabi. Discover more and register now at adipec.com. Right, so just to be absolutely clear then, so as you say, the sort of, if you like, the first generation SMRs that use the more conventional technology, you think they could be deployed at scale when before the end of the decade, before the 2030s? We are going to see several. I mean, it depends on what you're talking about. I mean, so if you look at the Russian reactors, they are being deployed as we speak.

23:19I mean, so they have operating reactors and they are building them in Russia and in Uzbekistan and in other parts of the world. So in some cases, those are, you know, I mean, if you think about that, those small modular reactors are the same ones that are used in icebreakers. So this is a technology that exists and is done on a daily basis, if you wish, and is being adapted. And in China, I think that we are going to see the same very soon. I mean, the first of these water-based, water-cooled, I say Mars is about to start operating. And once this first one is up and running, I think that we are going to see the same that happened with the other ones.

24:02And then in Western countries, I do think that as Ontario proves how they are going to do this and they are already starting, we will see that same reactor build in Poland or in other parts of the world. So I do think that those reactors will be deployed at some scale this decade, certainly early next decade. Right, that's interesting. And certainly in this country where I'm in the United States, it's clear that the big tech companies are very interested in SMRs and there have been various announcements of partnerships and investments that these companies are making in some of the SMR technologies.

24:43As I was saying earlier, nuclear seems like a very good fit for the demands that these companies have. Their electricity consumption is growing very rapidly. They're expected to keep growing rapidly. And they also have emissions goals. They want to reduce their carbon footprints. And there aren't that many technologies that can do that. And definitely, they see nuclear as part of the toolkit. Do you think that's going to be a significant factor then in accelerating the deployment of SMRs? The fact that we do now have these big tech companies, the hyperscalers, data center operators companies involved in ai that all see nuclear as a really important technology in a way perhaps that kind of your typical electricity customers didn't five years ago no i mean you're completely right i think that this is a unique moment in history where the energy users have a very strong voice in this energy conversation and obviously the ai companies the technology companies, these are well-known companies, very large companies.

25:53I mean, the Googles, the Microsofts, the Amazons, the Metas, obviously, they have a very large megaphone, if you know what I mean. Their opinion, it does quite matter. So from the nuclear point of view, it is definitely exciting to have seen how the technology companies, the AI companies, the hyperscalers have very, very quickly recognized that nuclear energy can have or will have an essential role to provide them with, as we said, this 24 -7 affordable carbon-free electricity that they need. So, but let me just say, certainly SMRs is a piece of that puzzle. And you mentioned that, I mean, clearly Google has partnerships with Kairos and Amazon with X-Energy.

26:45So small modular reactors will, in many occasions, be a key piece of that puzzle. But let's be clear, large reactors are also going to be a huge piece of that puzzle. So as we mentioned before, I mean, Microsoft agreement with Constellation is for a 1 ,200 megawatts reactor. And they do plan to use all that energy or most of that energy, right? So it's not just SMRs. So, I mean, for us, it's very important. We work quite closely with the technology companies. I don't know if you know, but Microsoft actually just joined World Nuclear Association in September. So again, we are very much learning and understanding what are the needs that all these large energy users have.

27:34As I said before, it's not just SMRs. And if you think about this, you know, think about tripling global nuclear capacity by 2050. Let's assume that that is a goal that we believe. It's really not such an ambitious goal, OK? Even though it looks like, oh my gosh, three times is a lot. In reality, three times nuclear is nothing more than maintaining 10 % of the global electricity to come from nuclear energy in 2050. So if we believe the projections for electricity demand growth that we are hearing from the International Energy Agency and others, so taking 10 % of that electricity with nuclear, that's three times nuclear, nothing more.

28:19So if you think about this, we are not going to want to add 1 ,000 gigawatts of new capacity to the grid in 100 megawatt chunks. We probably are going to want to do it in 1 ,000 megawatt chunks. And again, as I said before, there will be so many occasions in which an SMR or a small, you know, a mini fleet of them may do the trick better than a large reactor for many reasons. But again, it won't be SMRs, the only thing that will support that. And then the other thing that I do want to mention, I mean, AI, as you said, brings, I mean, it's a shiny object. We all get excited when we think about AI.

29:05But if you think about it, there is many other sectors of the economy that also need to be decarbonized. And this is what we were talking about before, the metallurgical industry, the pharmaceutical industry, the chemical industry, ceramics, sustainable aviation fuel, the shipping industry, you name it. I mean, there is a long list. And many of those industries are not going to be easily electrified. I mean, part of them, perhaps, but not 100%, which, again, brings an enormous, well, golden opportunity for nuclear energy and the steam, the carbon-free steam that nuclear energy does produce. Yeah, that's also very interesting.

29:51And then the other thing I wanted to raise, which is clearly a big deal from my perspective being based in the US, is the question of policy support. and so obviously we have a change of administration here in the united states we have an administration that's taken the u.s out of the paris climate agreement it is very skeptical of renewable energy much opposed to the idea of pressing towards net zero emissions and so on but actually very supportive of nuclear power and encouraging new nuclear development there's been various presidential executive orders intended to expedite and accelerate nuclear development in this country.