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End User Timelines and Decision Making

From traditional light water reactors (LWRs) to advanced small modular reactors (SMRs), each type of nuclear technology has different benefits and risks. Selecting the most suitable technology will depend on the end user and how they value different technology attributes. To explore the market for the range of nuclear reactor technologies and end user expectations of nuclear energy deployment, Laura Hermann, Potentiary, moderated a panel discussion featuring representatives of utilities, early movers, and potential end users for nuclear energy.

Setting the stage for the discussion, Hermann stressed that today’s energy needs and timelines are very different from those in the nuclear industry’s 20th-century beginnings. Successfully sorting through the crowded ecosystem of development pathways and reactor types to drive growth requires a decision-making process that attends to the range of nuclear reactor technologies and end user expectations, which pose new challenges that different stakeholders, such as early adopters, elected officials, local municipalities, and new investors, must confront. Attending to these considerations requires understanding the potential market adoption, profitability, scalability, and cross-sector risks of different models.

The session’s panelists were Chris Nolan, Duke Energy; Wayne Blaylock, Dow Chemical Company; Chad Eaton, Nucor Corporation; Lucia Tian, Google; and Faraz Ahmad, Amazon.

OPENING REMARKS

Nolan described how nuclear power fits into the energy mix and future vision for Duke Energy, which is the largest regulated utility in the United States and also the operator of the country’s largest regulated nuclear energy fleet. He said that providing safe, efficient, and reliable nuclear energy is the cornerstone of the utility’s goal to provide reliable power with net-zero emissions by 2050. To meet its targets, Nolan said Duke Energy aims to extend the operating life of its existing nuclear assets in addition to building new plants to meet the rapidly growing energy demand from residential and commercial customers, especially data centers. He noted that the company recently applied for an early site permit for a coal-to-nuclear conversion that will leverage existing infrastructure and employees.

Blaylock said that Dow Chemical Company also sees nuclear energy as essential to meeting ambitious decarbonization goals. While the company began focusing on nuclear energy decades ago through the Next Generation Nuclear Project, this effort stalled when natural gas prices that had been climbing through the 2000s fell to much lower prices following the expansion of shale gas drilling. Today, amid the renewed interest in nuclear energy, he said that Dow is pursuing several partnerships to spur development and increase the role of nuclear power in providing both the electricity and steam needed to fuel the company’s operations.

Nucor Corporation is the largest steel and steel products producer in North America, and also the largest steel recycler. Eaton described how the company’s use of electric arc furnaces makes it unique in the steel and recycling industry and also makes it well positioned for meeting customer demands for low-carbon products. The company supplies components for a broad range of customers, including automotive manufacturers, HVAC (heating, ventilation, and air conditioning) companies, and data centers; given that steel is a key building block for many types of power plants as well as electricity transmission infrastructure, he added that Nucor can also help to fill supply chain gaps as electrification trends continue and the nuclear industry expands. Because Nucor facilities do not produce much electricity behind the meter, he said the company is interested in partnering with utilities and suppliers to facilitate the adoption of low-carbon energy sources.

Tian leads Google’s Advanced Clean Energy Technologies unit, which is tasked with examining a wide range of options for meeting the company’s ambitious decarbonization goals. She said that Google has long been active in procuring clean energy for its domestic and global operations and sees nuclear energy as a necessary component of an “all-of-the-above” portfolio approach to clean, reliable energy production. In

partnership with Kairos Power, the company plans to bring on 500 MW of new nuclear power by 2035. Tian added that Google sees investing in building first-of-a-kind designs and identifying opportunities to reduce costs—both construction and consumer energy costs—as a way to advance its own goals and have a positive impact on the entire grid.

Amazon aims to achieve net-zero emissions by 2040, not only for the company’s operations directly but also for the emissions of its suppliers and customers (the target includes Scope 3), Ahmad said. The company has been the largest corporate buyer of renewable energy globally for the past 5 years and places a high priority on electrifying its operations. As part of this effort, Ahmad said that the company has a vision to establish a nuclear reactor fleet, built from a short list of designs, through investments and partnerships that will ultimately collectively generate a target of 5 GW of power. He stressed that achieving this, not only for Amazon but for the grid more broadly, will require significant advances in speed and scale for nuclear energy deployments, a goal that is well aligned with the fleet-based approach that other presenters highlighted throughout the workshop.

PANEL DISCUSSION

Perspectives on the Market for New Nuclear Projects

Because different people may have different views of what characterizes the future of nuclear energy, Shirley Rodriguez, Advanced Research Projects Agency–Energy, asked panelists to define how they conceptualize “new nuclear.” Is it standardizing light water SMRs or developing next-generation advanced reactors? Nolan replied that new nuclear in his view encompasses both Generation III+ and Generation IV reactors. Generation IV reactors are particularly attractive because they include integrated thermal storage. He said that there is a place for both SMRs for which the design challenges are known and advanced reactors, for which the design challenges are yet to be seen, and added that Duke Energy incorporates plans to pivot on technologies as capabilities are demonstrated. Blaylock added that Dow Chemical Company is focused on reactor designs that can integrate steam and power production, which leads to a focus on advanced SMRs. He added that the fuel requirements are also important in determining safety and the feasibility of incorporating nuclear generation into existing facilities.

Laura Hermann, Potentiary, asked panelists to comment on the current market for new nuclear projects. Blaylock replied that while Dow is interested in how nuclear energy can meet its reliability and affordability needs, the many different reactor and fuel types have created a crowded

and confusing landscape. To decide which projects to pursue, Dow would prefer a consolidated and simplified market, driven by end user needs, to lower the many costs and risks. For example, SMRs may have more potential end users because they can be more easily integrated into physical sites, whereas larger reactors are more suitable for utilities seeking to expand grid-scale power. As interest in nuclear energy grows, a community of reactors is needed to support energy demand, secure the supply chain ecosystem, and create a diverse pool of end users.

Nolan shared that Duke Energy pursued and obtained a combined operating license from the U.S. Nuclear Regulatory Commission for two Advanced Passive 1000 (AP1000) units in South Carolina but did not develop the site further due to concerns with increasing design and construction costs. He added that microreactors do not suit Duke Energy’s current needs, and although the company would pursue them if there were interested customers, SMRs, advanced reactors, and large LWRs (e.g., AP1000) seem to be a more promising investment. He also noted that the location and population restrictions are more of a constraint when siting large LWRs.

Ahmad emphasized that for the nuclear market to be successful, it has to deliver on its promise of reliable, affordable, and scalable energy. These nuclear project developments can be assisted through monetization of tax credits and an environmental attribute certificate market. Tian agreed, noting that customers like Google will come fully on board when certain signals, such as reliability, are demonstrated. In the meantime, Google is open to investing and partnering with stakeholders to create those signals under the right conditions, such as forming a consortium, sharing risks, agreeing on a fleet approach, learning from past construction experience, and setting strict cost and scheduling milestones.

Nolan added that clean energy tariffs are one option for allowing large companies to benefit more from participating in clean energy generation, but emphasized that all customers must be treated fairly and equitably. He also emphasized that utilities, which take on the majority of the risks associated with nuclear energy builds, need financial incentives to move forward. As noted by other speakers, these could, for example, take the form of federal loan guarantees, construction-cost overrun insurance, or a state-based process to award a Certificate of Public Convenience and Necessity (CPCNs) for new generation assets based on best value versus least cost. Best value considerations could include reliability, resilience, environmental sustainability, affordability, and energy security. Since about half of the costs of building a new nuclear facility are incurred before a utility can get a CPCN, he stressed that utilities need a reasonable expectation that they will be able to recover the costs they incur. One option for this is to allow utilities to charge customers some of these costs

while the plant is being constructed, but this is controversial because it runs the risk that customers may be charged for new infrastructure that is never deployed.

Ahmad added that experience has proven that large nuclear projects can be delivered on time and on budget, as demonstrated by the Barakah Nuclear Energy Plant in the United Arab Emirates and the refurbished nuclear fleet at Ontario Power Generation, but these are international projects outside of the United States. In addition, he recommended using digital tools such as digital twins, high-performance computing, and artificial intelligence (AI) to improve project delivery and performance. For example, digital twins can be used to facilitate project planning by simulating requirements, with cloud computing being used to manage assembly plans, scheduling, and constraints; integrate multiple elements and operational aspects; and provide visibility across the supply ecosystem. Digital twins have proven to be extremely helpful in industries such as aviation and oil and gas, and he posited that similar benefits would likely be seen in the nuclear realm.

Informing Generational Investments

Eaton reiterated that Nucor supports nuclear projects because of the company’s need for firm, reliable, and affordable power to optimize its operations and maintain profitability. Electricity is one of the company’s largest expenses, despite honing its processes to be as energy-efficient and cost-effective as possible. He added that Nucor can support utilities’ long-term, multi-generational decarbonization and electrification projects by being an “anchor” customer, building confidence in other long-term advanced energy investment projects.

Nolan and Eaton underscored that nuclear energy is a generational investment with a lifespan of many decades, which requires a different set of decision-making criteria than may apply to asset investments with a shorter lifespan. “If you look at our coal and gas assets, most of the cost is in the fuel, which leaves the community and goes somewhere else; if you look at nuclear, most of the cost is in the facility, which translates into property tax and the jobs, the people, which translates to a vibrant community,” Nolan said. Beyond the short-term employment boost during construction, plants that run for decades bring long-term benefits for local communities.

Karl Hausker, World Resources Institute, asked how accurate the cost projections are for nuclear energy generation, and Nolan replied that estimates of levelized costs of energy (LCOE) do not fully capture the value of nuclear generation. Instead, he suggested that calculating an asset’s “best value,” which includes factors such as reliability, resiliency,

energy security, environmental sustainability, and affordability over the life of the asset, provides a more accurate indicator for generational assets like nuclear plants. Blaylock agreed that calculating LCOE is challenging and suggested that stakeholders could instead discuss the attributes nuclear energy can capture to enable fairer comparisons between different technologies. Ahmad noted that, for example, integrating clean, firm resources, such as nuclear energy, into the grid can lower overall system costs by 30 percent.¹

Hermann asked the panelists to expand on how companies approach decarbonization goals for Scope 1 (reducing direct emissions from sources a company owns or controls) versus Scope 2 (reducing indirect emissions from buying energy). Eaton replied that Nucor is working to meet its Scope 1 goals, and while they have very little control over how the electricity they purchase is made, they would like to help providers lower their emissions to meet their Scope 2 goals.

Given that data centers are seen as an important driver of rising energy demands, Abdalla Abou-Jaoude, Idaho National Laboratory, asked whether it is possible that future projections of demand from the AI industry have been overstated. Tian replied that the uncertain future of AI indeed makes its associated energy needs challenging to predict. AI demand could grow even as technological innovations drive new efficiencies. In any case, it is clear that the grid will have to expand, and nuclear energy is a clean, firm option to do that. Ahmad added that Amazon sees data center and AI infrastructure as a key national imperative and has made investments on the order of tens of billions of dollars in multiple states to support national competitiveness and national security. He agreed that the grid will need to both expand and decarbonize in future to deliver Amazon’s vision of reliable, affordable power to everyone. Blaylock added that regardless of how their energy is used, nuclear power plants are built to leverage integration, last for generations, and serve diversified end users.

Leveraging Partnerships

Eaton suggested that, while companies are accustomed to negotiating to form mutually beneficial partnerships, a different level of stakeholder collaboration may be required to accelerate nuclear energy deployment. He highlighted the crucial role of access to electricity in influencing companies’ decisions around whether and where to expand, where to site facilities, and how to ensure continual operations. Given the interplay between such decisions on the part of electricity customers on the one

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¹ Department of Energy, 2024, Pathways to Commercial Liftoff: Advanced Nuclear, September.

hand and utilities’ decision making around where and how to ramp up generation capacity on the other, he said that both sides can benefit from a more integrated approach to resource planning. Partnerships can be instrumental in sharing construction costs and risks; leveraging financial opportunities and investments; lobbying communities, states, and regulators for development incentives; explaining the value of generational assets for long-term economic development; and investing in the local workforce. Eaton added that identifying the right group of stakeholders is key, asking. “Who all do we bring to the table as a united voice saying the same thing at the same time, all pulling the rope in the same direction—not just at the same time, but on the same day and at the same panel and at the same regulatory body, so that they understand why these projects are so important to get to market sooner rather than later?”

Hermann agreed that partnerships are important, adding that, while utilities have traditionally borne the risks of building new energy infrastructure, companies and other end users are increasingly finding additional value in nuclear generation beyond electrons, such as heat, expanding the opportunity space nuclear builds represent for a broader array of industry stakeholders. Ahmad added that in his experience, delivering large projects on time and within budget requires relationships with a tightly structured and tiered supply ecosystem in which responsibility for overall project outcomes is shared to ensure every player is aligned and incentivized to meet expectations. This “integrated project delivery” must be handled openly and sensitively to avoid friction between suppliers and ensure they are fully engaged, he said. In turn, suppliers are given freedom to innovate (within the necessary scope), improving efficiency and lowering costs.

Hermann and Tian agreed that cross-sector collaboration can spur inspiration and innovation, and Tian noted that Google is building partnerships to increase the demand signal for nuclear energy, especially for larger reactors.

Challenges to Building First-of-a-Kind Designs

Hermann prompted panelists to comment on how first-of-a-kind technologies might compete against more tested designs in the commodity-based energy market. Nolan explained that there are two facets of being first-of-a-kind: the reactor design itself and the construction project to build it. While progress is being made on both fronts, both areas can struggle with complexity and change control. Having a strong project management team to ensure that changes ripple through all facets of a project and implement experiential learning will be essential to enabling successful first-of-a-kind units to eventually reach economies of scale, he said.

Blaylock agreed, sharing that Dow has found success with an integrated project management approach that facilitates cross-pollination between the company and its vendors. There are important innovations and gains to be realized from rethinking construction with preassembly and fabrication, and he described how experiences in the oil and gas industry—for example, the successful construction of a massive, on-ship ethylene plant—show the benefits of a strategic approach to modularization. Leveraging lessons from other massive, complex projects can help to advance SMR deployment with new delivery models.

Workforce Needs

Tian stated that efforts to increase the nuclear labor pool at the local, state, and federal levels will be critical to successful large-scale nuclear energy deployment. Nolan agreed, noting that there are workforce needs at every career level. Duke Energy is targeting middle school, high school, community college, and university students with science, technology, engineering, and mathematics programs to develop the skilled workforce needed to staff these plants—jobs that he said can be both financially and personally rewarding. To ensure that the workforce is ready when the jobs are available requires dedicated curricula and strong relationships with educators, he added.

Considerations for Resiliency

Robert Ichord, Atlantic Council, asked panelists to comment on the role of nuclear energy in enhancing resiliency, which is different from reliability and very important given various sources of vulnerability across the electric power grid overall. Nolan answered that nuclear power is Duke Energy’s most resilient resource—it works during extreme weather conditions, including hurricanes, and is relatively easy to put online and offline.

Resiliency in operations is also important for energy users. Ahmad stated that Amazon continually considers and evaluates resiliency and incorporates multiple layers of redundancy to ensure continued service in the face of potential disruptions. Eaton stated that resiliency is also important to Nucor, which carefully sites facilities, partners with utilities’ integrated resource plans, and helps them maintain equipment or bring new resources online. Blaylock added that Dow ensures resiliency for its assets by having diversified supply chains.