Birth? Despite the desperate dreams of some for a tripling of worldwide nuclear energy capacity by 2050, a rebirth is drawing skepticism.
In the aftermath of last year’s COP28 22 of the world’s nuclear power countries declared that goal. Following up on that aspirational event, the International Atomic Energy Agency organized the first-ever “Nuclear Energy Summit” in Brussels last week (Mar. 21).
Predictably, the 34 national delegates to the Brussels summit pledged “to work to fully unlock the potential of nuclear energy by taking measures such as enabling conditions to support and competitively finance the lifetime extension of existing nuclear reactors, the construction of new nuclear power plants and the early deployment of advanced reactors.”
While optimism pervades the nuclear community, some experts are expressing concern about over-hyping the technology and overlooking the obstacles. Ian Edwards, CEO of Canadian engineering company AtkinsRéalis, told the Financial Times, “Clients, governments and ourselves as the industry players . . . we all become too optimistic. We have this optimism bias towards being able to deliver faster.”
AtkinsRealis is the trading company of giant Montreal-based SNC-Lavalin Group Inc, which provides engineering, procurement, and construction for a variety of industries, including the country’s Candu nuclear plants. AtkinsRealis was Canada’s largest construction company in 2021, according to Wikipedia.
“Really we should probably slow things down a little bit, spend more time on the planning phase and get the execution phase [done],” Edwards told the FT.
Overhanging the optimism is the bad experience with the latest expedition into new reactors in the Western world: Vogtle 3 and 4, V.C. Summer, Flamanville 3, Oilkiluoto 3, Hinkley Point C. Those troubled projects – all way over budget and long delayed – have pushed the concept of small modular reactors, a technology that doesn’t yet exist commercially.
Edwin Lyman, the nuclear power safety expert at the Union of Concerned Scientist, also highlighted some dark clouds hidden in Brussels. Critiquing the Brussels agenda, Lyman said, “It appears the Summit will be taking place in an alternate universe where there is no risk that a nuclear plant will melt down, be attacked by terrorists or military forces, or be misused for production of nuclear weapon materials.”
Covering the Brussels event, Bloomberg reported that bankers are reluctant to open their vaults to new nuclear, having been burned by old nuclear: “A group of mostly Western countries pledged to triple nuclear generation by 2050. But lenders balked at the eyewatering cost of doing so.”
Looking at a potential need for $5 trillion in order to finance the optimistic future, Thomas Ostros of the European Investment Bank said, “The project risks, as we have seen in reality, seem to be very high,” said European Investment Bank Vice President Thomas Ostros. He recommended that countries needing power quickly focus on renewables and energy efficiency.
“Nuclear comes last.” — Fernando Cubillios, Development Bank of Latin America
Ostros added, “We need state involvement, I don’t see any other model. Probably we need quite heavy state involvement to make projects bankable.” Fernando Cubillios of the Development Bank of Latin America said the bank looks at renewables and the grid as a lending priority. “Nuclear comes last.”
Death? Is the most mature small modular reactor developer headed for the exits? NuScale Corp. (SMR:NYSE) stock, already fallen dramatically from when it when it went public via a SPAC (special purpose acquisition company) in 2022 and hit $15/share, has tumbled further.
Facing continued dismal financial results revealed in NuScale’s 2023 year-end results, Wells Fargo last week (Mar. 19) downgraded the company’s share, after they had shot up the week before that on a glowing prediction from Canadian investment banking firm Canaccord Genuity. Canaccord said NuScale could benefit from soaring U.S. demand for power, driven by the rise of AI. NuScale shares quickly doubled to about $8/share.
But the bubble burst when Wells Fargo days later debunked the Canadians. Seeking Alpha reported, “Wells Fargo’s Neil Kalton notes NuScale (SMR) has no secured customers so far for its VOYGR product; is in poor financial condition, with cash on hand providing just a year of runway and posing challenges in securing new customers; VOYGR technology is currently not cost competitive with other sources of generation; and the company’s flagship CFPP project was terminated after more than 10 years of development.” NuScale stock closed Friday (Mar. 22) at $4.25.
NuScale insiders have been unloading their stock holdings, with CEO John Hopkins selling 59,768 shares at $4.20 last Friday (Mar. 22), according to an SEC filing. That’s a net of slightly over $251,000. According to GuruFocus, over the past year, “Hopkins has sold a total of 88,305 shares and has not made any purchases of the company’s stock.” The financial website adds, “The insider transaction history for NuScale Power Corp shows a pattern of insider activity. In the past year, there have been 2 insider buys and 33 insider sells.”
Burial? The U.S. Fifth Circuit Court of Appeals in New Orleans, which has jurisdiction in Louisana, Mississippi, and Texas, has denied a petition from the Biden administration’s U.S. Nuclear Regulatory Commission seeking rehearing of the August 2023 three-judge decision killing a Texas project to store high-level nuclear waste at an above-ground, away-from-reactor facility.
The court, the most conservative among the 13 federal appeals courts, denied the request for a full (en banc) review of the decision by a vote of seven in favor of rehearing, nine opposed, and one recusal for unstated reasons. The majority opinion said, “We continue to adhere to our position that the judiciary has not only the authority but the duty to review the NRC’s actions, which may threaten significant environmental damage in the Permian Basin, one of the largest fossil fuel deposits in the world.”
The dissenting judges wrote, “This exercise of jurisdiction has grave consequences for regulated entities’ settled expectations and careful investments in costly, time-consuming agency proceedings, inviting spoilers to sidestep the avenues for participation that Congress carefully created to prevent this uncertainty.”
Interim Storage Partners in 2021 won an NRC license for storing 5,000 tonnes of spent fuel at an existing low-level nuclear waste dump in Andrews County on the New Mexico border. The firm said it hoped to expand the project to 40,000 tonnes. Interim Storage Partners is a join venture of Orano USA, a subsidiary of French nuclear fuel cycle company Orano SA and Waste Control Specialists, the operator of the low-level waste facility.
When the planned waste site was announced, local citizens, the oil and gas industry, and Texas Republican Gov. Greg Abbott objected. The Texas legislature passed a measure aimed at stopping the project.
The Texas case has broad implications, including for a similar above-ground nuclear waste site in New Mexico, also located over the Permian Basin, where Holtec International won an NRC license in 2022 over opposition from locals and Democratic Gov. Michelle Lujan Grisham.
–Kennedy Maize