How can the United States advance nuclear innovation in a safe, cost-effective way? During today's OnPoint, Ted Nordhaus, chairman and co-founder of the Breakthrough Institute, discusses a new report, "How to Make Nuclear Cheap," and makes the case for policy and technical tools that can help advance the U.S. nuclear industry. He explains why many safety concerns are fading from the discussion and talks about the role government should play in cost sharing for the development of new facilities and technologies.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Ted Nordhaus, chairman and co-founder of the Breakthrough Institute. Ted, thanks for coming on the show.
Ted Nordhaus: Thanks for having me, Monica.
Monica Trauzzi: Ted, Breakthrough has just released a report, How to Make Nuclear Cheap, where you lay out some policy recommendations for advancing nuclear innovation in a safe, cost-effective way. We recently saw the introduction of spent fuel legislation in the Senate by Senators Wyden and Murkowski, Alexander and Feinstein. From a policy standpoint, is the conversation in Congress going in the right direction or do we need to start to sort of shift the conversation in Washington?
Ted Nordhaus: Well, I think that the Spent Fuel legislation is encouraging in that the spent fuel issue has just sort of blocked everything else on the nuclear front for probably close to a decade. So I think the hope is that if we can make some progress on the political side on that issue we then have an opportunity to sort of really move the conversation back to how do we advance better nuclear technologies that can do more of the things that we want them to do.
Monica Trauzzi: So what have you identified as the key factors to making nuclear cheap?
Ted Nordhaus: Four things. Safety. We really want to move towards reactors that have what we call inherent safety characteristics, meaning that they are safer in the nature of the fuels, the coolants, and the design of the reactor, as opposed to having safety systems having to be engineered in sort of post facto around the core technology. So safety is the first thing. Efficiency, higher thermal efficiency, so you convert heat to electricity more efficiently. The third thing is modularity. Smaller manufactured components. And the fourth thing is readiness, reactor designs that rely as much as possible on the existing supply chains while bringing us those other benefits are likely to be cheaper and to get to market faster.
Monica Trauzzi: How much of an issue is the nuclear industry itself in terms of its willingness to actually change?
Ted Nordhaus: Well, I think we have a sector, putting the industry aside for the moment, that has really been an anti-innovation sector as opposed to an innovation sector. And I think the industry shoulders some of the blame for that. I think we've got a regulatory system that shoulders a lot of the blame for that as well. And that's not to say that we should have less regulation but I think we need a lot smarter regulation, especially when it comes to licensing new designs. It costs upwards of two to five hundred million dollars just to license a new light water design, and that doesn't include the development costs, that just includes the regulatory costs. So right there you have a licensing system that only very well financed incumbents could conceivably negotiate. And the result of that is that we haven't had a lot of innovation in the sector because we really have shut out entrepreneurialism, we've shut out new players.
Monica Trauzzi: This conversation and the report itself really assumes that nuclear should play a role in the US' future energy policy, but there's still a lot of convincing that needs to happen both among consumers and policymakers. But do you think that the arguments against nuclear are fading? Is that how confident you are in putting this out?
Ted Nordhaus: I think we've seen a really interesting shift. So for decades it was unsafe, we didn't know what to do with the waste, it was a proliferation problem. Most of those issues were really, really overstated. And I think what we've seen in this last year or so, and especially we've been involved with a movie called "Pandora's Promise," which was just released last month, which really tells a story of environmentalists who've changed their minds about nuclear energy. "Pandora's Promise," what's interesting is there's been a bunch of pushback from folks who oppose nuclear energy against "Pandora's Promise," but almost all of it has been around the economics of nuclear. The issues around safety, around waste, around proliferation have really sort of not been issues. People have actually accepted that nuclear is actually,compared to the other alternatives, pretty darn safe.
Monica Trauzzi: So what are the key cultural cues that you really look towards to indicate to you that nuclear is very much a player?
Ted Nordhaus: Interestingly we are building new plants for the first time in a couple of decades now, two in Georgia, two in South Carolina. We just released our report yesterday in the Senate and had a packed room, standing room only, bipartisan interest, and I don't think that would have happened a couple of years ago. And I think the other thing is that there's an important conversation happening right now about advanced nuclear, that we're not just talking about light water reactors any more but we're talking about these new designs that really have the potential to get much cheaper, to be even safer than the designs that we have today, and many of them even also deal with their own waste.
Monica Trauzzi: Recently Southern California Edison announced it would not reopen it's San Onofre facility. How does the industry successfully move beyond incidents like that one and maintain its relevance again with consumers and policymakers?
Ted Nordhaus: Well, I think there's a couple of things. The first that we have to recognize is that we have an aging fleet of light water reactors, and either we're going to replace those reactors with better designs, or we're going to replace them with coal and gas. Now, if you care about the environment, you don't want those reactors replaced with coal and gas. So we have a choice to make. Over the last couple of decades the choice that we've made, all talk about the forthcoming renewables revolution aside, has been to build more coal and gas instead of nuclear. And our question going forward is, are we going to continue that or are we going to invest in a new generation of nuclear plants that can produce large amounts of really clean energy cheaply.
Monica Trauzzi: So just how cost effective does nuclear have to be in order to compete against what is now cheap natural gas?
Ted Nordhaus: Well, it's got to get cheaper. How much cheaper? It depends. A lot of the problem is not the long term, and if you look at the 60-year lifetime of a plant the issue is not so much what does a kilowatt-hour of electricity cost over those 60 years. The problem really is that these are huge plants that you have to swallow in one, two-gigawatts chunks with a huge amount of capital up front. So I think one of the things is going to be plants with lower up front capital costs. Some of that can be solved technologically in terms of safer plants that need fewer redundant safety systems and less substantial containment systems, because they're much less prone to melting down. And then the second is building smaller plants modularly where you're buying in 100-megawatt or 300-megawatt chunks, which in an economy where energy demand growth is slowing and may even be flat over the coming decades, may make a lot more sense for utilities in the United States than these huge plants that we built in the past.
Monica Trauzzi: What's the cost-sharing role the government should be establishing as part of its role in sort of innovation in this sector?
Ted Nordhaus: Well, there's a couple of things that we're proposing in the report. The first is, as I mentioned before, the cost of getting a new reactor design license fall entirely on the licensee today. Now, our view, and I think there's a strong argument for it, is that better, safer, cheaper nuclear technologies are a public good, and that there should be a significant public cost share in the licensing process so that the burden doesn't fall entirely on the developers. We think that developers still need to have some skin in that game, but I think if we want to see innovation flourish in this sector, then we need to support developers through the licensing process much more. I think the other key thing, new advanced designs. There are technical challenges around materials and fuel, they're quite solvable, but they do require continuing R&D in a lot of cases, and I think there's an important public role in helping to solve those problems, and doing so in a way that they benefit multiple designs. So we're not picking one design that's going to be the future, but that we're targeting our research and development through the national laboratories and other programs in ways that we are opening up multiple paths to a safer, cleaner, cheaper nuclear future.
Monica Trauzzi: All right, Ted, interesting conversation, we're going to end it right there. Thank you for coming on the show.
Ted Nordhaus: Thanks, Monica.
Monica Trauzzi: And thanks for watching, we'll see you back here tomorrow.
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