What’s NEXT? Coal to Nuclear transition

John Kerry, working on the sidelines of US Climate Action, announced the winners of Project Phoenix and a new US initiative called NEXT, short for Nuclear Expediting the Energy Transition Porgram, as part of the State Department's FIRST Program. Czechia, Slovakia and Poland were selected to participate in Project Phoenix and receive support for coal-to-SMR feasibility studies.

In a September 7, 2023 announcement issued by the State Department we learn about progress that has been made in a State Department program called Foundational Infrastructure for the Responsible Use of Small Modular Reactor Technology (FIRST).

Building on his announcement of Project Phoenix at the United Nations Climate Change Conference in Sharm El Sheikh (COP27), Secretary Kerry announced that project proposals from Czechia, Slovakia, and Poland were competitively selected to participate in Project Phoenix and will receive support for coal-to-SMR feasibility studies.

So, while at the Three Seas Iniative Summit in Bucharest, Special Presidential Envoy for Climate John Kerry announced the Project Phoenix winners and a new initiative for the U.S. to accelerate the transition to clean energy which furthers the role of "new, secure, and safe nuclear technologies."

This is the NEXT program, short for Nuclear Expediting the Energy Transition, with One Stop Shop for SMR Support. The NEXT effort will provide countries in Europe and Eurasia that are approaching SMR deployment decisions at the NEXT virtual center where they can apply for a suite of advanced project preparation tools and services. These services may include in-person technical, financial, and regulatory consultancies and advisory services; expert study tours to visit U.S. nuclear facilities, national laboratories, and universities; competitively selected provision of an SMR simulator to support workforce development.

Project Phoenix and NEXT One Stop Shop are subprograms of the U.S. Department of State’s Foundational Infrastructure for the Responsible Use of Small Modular Reactor Technology (FIRST) Program. The United States is committed to supporting the use of innovative, safe, and secure clean energy technologies to power global decarbonization efforts, advance energy security worldwide, and provide options to achieve net zero transition in hard-to-abate energy sectors.

Read The State Department's Announcement at: Special Presidential Envoy for Climate Kerry Announces Project Phoenix Participants and the Nuclear Expediting the Energy Transition (NEXT) Program, September 7, 2023.

For extra color on the benefits of the Coal-to-Nuclear transition, see Level Up your coal plant by giving it a nuclear reactor!, publishd to Youtube by Thies Becker.

Published by Nucleation Capital in Advanced Nuclear, Capital reallocation, Central bank support, Construction costs, Corporate decarbonization, Future of Energy, Government support, International support for nuclear, Land Use by Energy, LINKS, Nuclear competitiveness, Nuclear financing, Nuclear innovation, Private companies, Public companies, Solving climate, US technological leadership

May 30, 2023

Bank of America: “The Nuclear Necessity”

Bank of America's Research Investment Committee issued a landmark report on May 9th to its securities clients entitled "The Nuclear Necessity," finding evidence of increasing demand and giving a bold "BUY" recommendation for nuclear and uranium. (Note: Initially, only a summary image of the top-line take-aways was shared on Twitter. More recently, BofA has chosen to share the report online.)

This report gave a bullish assessment of the nuclear power industry and its new growth prospects. (Note: Initially, a summary image of the top-line take-aways was shared on Twitter. More recently, BofA has chosen to share the report online.) The entire report is worth reviewing but there were two bullish catalysts not priced into the market in the analysts' opinion: 1) a potential G7 sanction on Russian uranium and 2) policy shifts towards nuclear "as the best climate solution."
We are very excited to see this analysis by a big bank and expect that many others will follow, as it has become clear that nuclear has hit an inflection point. We also believe there are several other very important catalysts not included in the BofA analysis. Reach out to us if you'd like to learn more about what we are seeing happening in the public markets and especially if you are intrigued to participate in the growing private markets. Nucleation provides investors with several unique vehicles which enable affordable access to the nascent but growing areas of deep tech innovation, expansion and improvement of collateral support, supply and integration services through our venture fund offerings.

References

Bank of America Securities/BofA Global Research: The RIC Report, The Nuclear Necessity, published May 8,2023.

Updated: October 2023

Published by Nucleation Capital in Asset manager support, Capital reallocation, Carbon emissions, Climate policy, Corporate decarbonization, Energy abundance, International support for nuclear, Investor activity, LINKS, Nuclear competitiveness, Nuclear financing, Nuclear innovation, Private companies, Public companies, Solving climate, Zero emission energy

May 9, 2023

Support for nuclear power soars

Grist writes: "US support for nuclear power soars to highest level in a decade: As the country looks to decarbonize, nuclear’s popularity continues to climb." This is what Akielly Hu, Grist's News and Politics Fellow, reports following the release by Gallup of a survey that found that 55 percent of US adults support the use of nuclear power. This total is up four percentage points in a year, and "reflects the highest level of public support for nuclear energy use in electricity since 2012."

Among other findings, the survey found that Republicans are more likely to favor nuclear energy than Democrats, which partisan divide is particularly visible at the state level, with more pro-nuclear policies adopted in Republican-controlled states than left-leaning ones. Nevertheless, support for nuclear energy by Democratic is also on the rise, in part due to advances in nuclear technologies and new federal climate laws that clarify the fact that nuclear power is carbon-free energy and can help in efforts to solve climate change.

The Biden administration has identified nuclear energy as a key climate solution to achieve grid stability in a net-zero future. The administration is pushing for the deployment of advanced nuclear reactor models that improve on the safety and efficiency of traditional reactor designs. These designs will all be far more consistent and reliable than wind and solar energy, which vary depending on the weather. The broader shift in public opinion and, in particular, Democratic opinion toward nuclear energy, is at least partially a function of strong pronuclear leadership coming from the Biden Administration and the DOE under Secretary Jennifer Granholm.

Read more at Grist, US support for nuclear power soars to highest level in a decade, by Akielly Hu, May 9, 2023.

March 1, 2023

Industry decarbonization moves ahead with Dow Chemical / X-energy partnership

Dow Chemical has signed a development agreement with X-energy Reactor Company to build its DOE-funded demonstration 4-pack Xe-100 advanced nuclear plant at a Dow Chemical Gulf Coast site. Dow's very strategic move makes it one of the first industrials to acknowledge that decarbonization will not be possible without advanced nuclear energy.

This is a key watershed moment, marking the imminent arrival of an entirely new category of clean energy power plants that are entering the market with an ability to provide both carbon-free electricity and clean, high-temperature steam for industrial purposes. Dow's interest reflects the likely appetite among large industrials for clean energy alternatives in their very hard-to-decarbonize sector and the appeal of having the DOE as a funding partner in the development of a first-of-a-kind plant.

Nuclear power has been serving the electricity needs of grid-scale utilities for six and a half decades. But until now, it has not been able to compete in the industrial process heat market. Now, X-energy and a number of other advanced nuclear ventures are designing more functional and flexible power plants that generate extra high-temperature stream. This steam can be piped directly to an industrial processing area which needs high-temperature heat for chemical processing or it can be converted into electrons with a turbine and generator to provide electricity.

Accordingly, for a company like Dow Chemical and hundreds of other industrial companies producing steel, ammonia, hydrogen, hydrocarbons or doing desalination, the Xe-100 provides a very compelling energy choice, as it can provide a lot of reliable, flexible power with stable pricing that can also feed electrons into the grid, when grid prices are high.

X-energy was one of two awardees of the DOE's Advanced Reactor Demonstration Program (the other awardee being TerraPower), entitling it to an initial grant of $80 million towards the demonstration of its Xe-100 power plant, consisting of four 80 MWe/200 Mwth reactors and a fuel fabrication facility within seven years (by 2028). The ARDP received an additional $2.5 billion from the Bipartisan Infrastructure Law for the demonstrations of two advanced reactor technologies, which will build on the initial $160 million received from the Office of Nuclear Energy prior to OCED’s creation.

X-energy initially planned to build is X-100 up in Washington state, in a partnership with and at a site hosted by Energy Northwest. Since receiving the award, X-energy has completed the engineering and basic design of its reactor and its fuel fabrication facility and is preparing to submit an application with the NRC, which has not yet happened. Meanwhile, the company has also agreed to go public via a merger with the Ares SPAC later this spring and these have likely helped give Dow Chemical the confidence to make an offer to partner with X-energy. If that isn't enough, the company just announced plans to open its first support center, to service its initial deployments of its Xe-100 plants.

Learn more at Power, X-energy and Dow Will Deploy a 320-MWe Xe-100 Nuclear Facility at Gulf Coast Site, by Sonal Patel, Mar 1, 2023. See Bloomberg for "Ares SPAC is Merging with Nuclear Energy Firm X-Energy, Dec. 6, 2022. Read more about the X-Energy Plant Support Center at X-energy: X-energy to Open First Plant Support Center for Xe-100 Advanced Small Modular Reactor Fleet, March 7, 2023. More about the DOE's ARDP Awards.

Published by Nucleation Capital in Advanced Nuclear, Capital reallocation, Carbon emissions, Climate policy, Future of Energy, History Timeline, History-making, LINKS, Nuclear competitiveness, Nuclear financing, Nuclear-inclusive energy policy, Politicians supporting nuclear, Solving climate, Zero emission energy

February 15, 2023

Energy Insiders Plan for More Nuclear

RTO Insider has reported on the discussion at the NARUC meeting in mid-February, in which the Tennessee Valley Authority CEO, Jeff Lyash, made the case for his need for nuclear energy to achieve his goals of 80% carbon-free generation by 2035 and net-zero by 2050.

The TVA already has an early has an early site permit from the Nuclear Regulatory Commission to build its first SMR at Clinch River. But Lyash is not interested in building one reactor. “In order for us to be successful, TVA needs something on the order of 20 reactors over that period of time," Lyash remarked to those gathered at the National Associate of Regulatory Utility Commissioners Winter Policy summit in Washington, D.C.

TVA, a federally-owned utility, will still need a construction permit for the 300 MW GE Hitachi MWRX-300 SMR that it is planning to build but what Lyash really needs is for the construction to reach "nth-of-a-kind costs, supply chain, workforce, project execution" to make constructing a portfolio of 20 or more reactors and slam dunk.

The rising need for nuclear power as a critical technology to enable full decarbonization was a major theme of the NARUC conference. As such, the formation of a new initiative, the Advanced Nuclear State Collaborative, to bring together members of NARUC and the National Association of State Energy Officials was announced by David Wright, an NRC commissioner, and Tricia Pridemore, chair of the Georgia Public Service Commission. The initiative, sponsored by the Department of Energy, will provide technical assistance and expertise for states deploying or considering new nuclear projects, Commissioner Pridemore said.

The new collaborative is the response to growing interest in nuclear by energy insiders. In at least 20 states, “public service commissions and state energy offices are engaged in feasibility studies for advanced nuclear reactor site selection, strategies to reduce regulatory and policy barriers to new nuclear, and other activities to pave the way for advanced reactors,” Commissioner Pridemore said.

With the two new AP1000 reactors at Vogtle just starting to come online, one might think that the troubled Southern Co. experience of building them at more than double the original cost and six years delayed might put a damper on interest in building more nuclear. In fact, Lyash and LPO Director, Jigar Shah, agreed that Vogtle showed that "America is deciding to do big things."

As a result of completing these AP1000s, there are now 13,000 trained men and women with experience in building new power plants. They will next be deployed in building the next AP1000s in Poland, which selected the Westinghouse AP1000 in part because the Vogtle plant got done, produced valuable lessons, and there is current knowhow for building it.

Now, this experience is available to benefit all new buyers, de-risk new builds and improve the financial and public trust in the technology. If more customers step up, whether for the AP1000 or other new designs, the valuable lessons learned can actually benefit the U.S., other nations and our decarbonization efforts and help keep nuclear power competitive in general.

In fact, according to Lyash, nuclear power plants are "highly competitive." And he should know because nuclear generates 42% of TVA's power supply. So while nuclear plants require large up-front capital expenditure, "they have a tremendously long and beneficial life," per Lyash. "They also deliver all the attributes to a power system that you need—voltage, frequency and maneuverability." The key need going forward: Buidling them on time and on budget.

Read more at RTO Insider, Making the Case for Nuclear at NARUC, by K. Kaufman, Feb 15, 2023.

February 11, 2023

Nuclear wins inclusion as “green” source for hydrogen

French energy minister Agnès Pannier-Runacher

France appears to wins another round against Germany in the fight to have nuclear included as a clean energy source within EU Commission rules. The EU has agreed that nuclear energy powered hydrogen will be classified as "green," so long as the carbon-intensity of the country's electricity is below 65 grammes of CO2 equivalent per kilowatt hour.

Early reporting on the EU Commission's decision regarding classification of hydrogen as "green" indicates that, once again, the EU will be recognizing low-carbon nuclear power as "green."

For more than a year, the EU has been assessing and evaluating the best way to ensure that hydrogen producers can't easily claim "green" production by using existing renewable energy, in a form of greenwashing, that simply takes credit fo renewable power that was being used elsewhere. This has forced the EU to look closely at both "additionality" and "carbon intensity."

The new rules, a draft version of which leaked out but which have not been formally published, seek to ensure that that green hydrogen is made only from “additional” renewable power, by forcing the producer to correlate its production in time and space to prevent cannibalisation of existing sources of clean energy. The Commission has finally arrived at a decision and set out two important additionality criteria:

By 2030, hydrogen production must be matched to renewable energy production on an hourly basis. Until then, the correlation is set on a monthly basis.
By 2028, hydrogen producers must prove that their electrolysers are connected to renewable energy installations no older than 36 months.

This decision enables investments in new hydrogen production to move forward with a clear understanding of how that production can benefit from the benefits available to clean energy until 90% of electricity production in a given country is produced from low-carbon sources.

While Germany has sought to exclude nuclear energy as a clean power source, France has been lobbying Brussels on the opposite side, arguing that hydrogen produced by nuclear power is also be considered "green." It appears that France has won its case in the draft rules.

In recognition of nuclear's low-carbon production, the EU has agreed that hydrogen produced in a country like France with the intensity of electricity is lower than 18 gCO2eq/MJs (or approximately 65 grammes of CO2 equivalent per kilowatt hour), then the hydrogen can qualify as green.

Among all 27 EU countries, only France and Sweden meet this criteria. In 2021, when its nuclear fleet was almost fully operational, French power was 70% of its energy, 85% low-carbon and emissions stood at 56g CO2e per kWh. Sweden, for its part, powered predominantly with hydropower, stands at an average of 28gCO2e/Kwh.

Not only is this EU rule a win for pronuclear countries, it is laying an important precedent in setting out a base level of carbon-intensity that recognizes that what matters is the carbon-intensity of the total grid, not the amount of renewable energy. We believe this will be of increasing importance over time.

Read more at EURACTIV LEAK: France wins recognition for nuclear in EU's green hydrogen rules, by Nikolaus J. Kurmayer, Feb. 11, 2023.

January 30, 2023

Menu of Nuclear Options Begins to Grow

Ontario Power Generation and partners signed a commercial contract to build a GE Hitachi-designed BWRX-300 small modular reactor (SMR). Several other groups are also looking at the BWRX-300, which at 300 MWs, is about 1/3rd the size of a traditional 1GW reactor. This further expands the menu options for those looking at nuclear.

Ontario Power Generation, GE Hitachi Nuclear Energy, SNC-Lavalin, and Aecon Group signed a contract to deploy a BWRX-300 small modular reactor at OPG’s Darlington New Nuclear Project site in Clarington, Ontario. According to their announcement, this may represent the first grid-scale SMR to be built in North America, which represents an important expansion in the menu of options available to those seeking low-carbon power generation.

There are many other interested potential buyers not far behind OPG. The Tennessee Valley Authority began planning and preliminary licensing for possible deployment of a BWRX-300 at the Clinch River Site near Oak Ridge, Tennessee. TVA is collaborating with OPG to advance SMR technology and the U.S. Nuclear Regulatory Commission and Canadian Nuclear Safety Commission are working together to license the two projects, according to GEH.

The OPG agreement, however, is a firm contract with a utility, an architecture engineer and a construction company to actually build the plant, rather than an LOI or MOU, and in this respect it is a milestone for the industry. In addition, Saskatchewan Power Corp. said in June it selected the BWRX-300 for possible deployment in Saskatchewan in the mid-2030s.

In addition to the GEH BWRX-300, the NuScale Voygr plant was recently added to the menu of available advanced plant options. NuScale has already received federal approval for its 50MW, maximum 12-pack reactor design and it's working to get approval for an uprated model with base units of 77MW. Together these two new designs represent a 200% increase in the number of available nuclear designs and sizes available to prospective buyers, in addition to the AP1000, with 1117 MWe, the first two of which are nearing completion at the Vogtle plant in Georgia.

Learn more at UtilityDive, GE Hitachi and 3 partners announce first commercial contract for grid-scale SMR in North America, by Stephen Singer, Jan. 30, 2023.

Published by Nucleation Capital in Advanced Nuclear, Capital reallocation, Carbon emissions, Climate policy, Future of Energy, History Timeline, History-making, LINKS, Nuclear competitiveness, Nuclear financing, Nuclear-inclusive energy policy, Politicians supporting nuclear, Solving climate, Zero emission energy

December 8, 2022

X-energy pursuing public listing with $2B value

X-energy Reactor Co., a developer of small modular reactors, signed a definitive agreement to merge with Ares Acquisition Corporation (NYSE: AAC), a publicly-traded SPAC, to create a New York Stock Exchange company valued at $2 billion, funded with $120 million in additional committed capital.

X-energy, an advanced nuclear developer founded by Kam Ghaffarian in 2009 and based in Rockville, Maryland, is designing next-generation nuclear reactors and fuel. Their high-temperature gas-cooled small modular reactor (SMR), the Xe-100, and its fuel, TRISO-X are engineered to operate as a single 80-MW unit or can be deployed as a four-unit plant for a combined 320 MW of capacity.

In 2020, the company was selected by the US Department of Energy to receive up to $1.2 billion in non-dilutive federal funding as part of the DOE's Advanced Reactor Demonstration Program. WIth its merger with Ares, anticipated to close in the second quarter of 2023, X-energy will have access to about $1 billion in cash that is in the trust account of Ares Acquisition Corp., assuming no or low redemptions by shareholders. Ontario Power Generation, Segra Capital Management Ares Management are collectively adding another $120 million to the final deal.

This is the second of two advanced nuclear ventures that are going public via a SPAC and gaining access to the public market as a result. There is a very big race among ventures seeking to develop advanced reactors and X-energy's entry into public markets is expected to accelerate its growth both with the additional financing received and the flexibility provided it by being a public entity.

Read more at UtilityDive: Nuclear SMR developer X-energy to merge with Ares Management-backed SPAC, creating $2B company, by Stephen Singer, published December 7, 2022 and see the press announcement at X-energy's website, posted December 6, 2022.

Published by Nucleation Capital in Advanced Nuclear, Asset manager support, Capital reallocation, Carbon emissions, Carbon markets, Future of Energy, History Timeline, History-making, Investor activity, LINKS, Nuclear competitiveness, Nuclear financing, Nuclear innovation, Private companies, Public companies, Solving climate, US competitiveness, US technological leadership, Zero emission energy

November 21, 2022

Diablo Canyon in line for $1.1B in DOE’s CNC funding

$1.1 billion in funding from the bipartisan Infrastructure Investment & Jobs Act's $6 billion Civil Nuclear Credit program has been conditionally awarded by the DOE to PG&E for use in relicensing and extending the life of Diablo Canyon, whose two reactors had been slated for retirement in 2024 and 2025.

As such, these funds will be used exactly as intended by the Federal Government's Civil Nuclear Credit program, to support “safe and reliable” carbon-free nuclear energy facilities, preserve some 1,500 high-paying jobs and reduce carbon emissions, the DOE said.

Diablo Canyon, a 2,240 MW nuclear power plant applied for the funding soon after the California Legislature voted to allow the plant to continue operating as the best way to prevent worsening grid instability, blackouts and increasing carbon emissions from expanded use of natural gas. PG&E's application, which won the support of California's governor, Gavin Newsom and his staff, passed through the first round of vetting done by the DOE on applications received. Unfortunately, Michigan's already closed Palisades plant, despite support from Governor Gretchen Whitmer, did not receive conditional approval for funding.

“This is a critical step toward ensuring that our domestic nuclear fleet will continue providing reliable and affordable power to Americans as the nation’s largest source of clean electricity,” said U.S. Secretary of Energy Jennifer M. Granholm.

Patti Poppe, CEO of PG&E, said in a news release that the federal decision is “another very positive step forward to extend the operating life of Diablo Canyon Power Plant to ensure electrical reliability for all Californians.”

Nuclear power provides 50% of the carbon-free electricity in the U.S., but shifting energy markets and other economic factors have resulted in the early closures of 13 commercial reactors, DOE said. The plant shutdowns have led to an increase in carbon emissions, poorer air quality and the loss of thousands of high-paying jobs, the agency said.

The first Civil Nuclear Credit award cycle set as its priority reactors facing the “most imminent threat of closure,” DOE said. Applications are limited to reactors that announced intentions to shut due to economic factors. The second cycle will include reactors projected to close in the next four years.

Read more at UtilityDive: DOE conditionally awards PG&E’s Diablo Canyon nuclear plant $1.1B to forestall shutdown, by Stephen Singer, published November 21, 2022.

Published by Nucleation Capital in Capital reallocation, Carbon emissions, Carbon markets, Climate change, Energy abundance, History Timeline, History-making, LINKS, Nuclear competitiveness, Nuclear financing, Nuclear-inclusive energy policy, Public companies, Solving climate, Zero emission energy

October 4, 2022

Is nuclear energy poised for an ESG-fueled comeback?

In a world of rising energy insecurity, climate change and skyrocketing energy prices, nuclear energy might be one of the only sectors feeling more bullish than ever.

"Once seen as an energy option on its last legs, the nuclear industry has had several victories lately. California Gov. Gavin Newsom (D) signed a bill intended to keep the Diablo Canyon plant running past its expected retirement date, and Germany plans to keep two aging nuclear plants available until at least April.

The energy security arguments for those plants in some ways mirror those of the 1970s, which led to a huge nuclear build-out. Then, it was skyrocketing gasoline prices and anti-market actions from Middle Eastern oil exporters creating energy insecurity. Today, similar factors are at play, with Russia now causing supply concerns and natural gas prices spiking. There’s also the ticking tock of climate change making zero-carbon nuclear particularly attractive in a world racing to cut emissions.

Supporters say there’s enough momentum for a nuclear renaissance that would catapult the industry into a greater role in the world’s clean energy future. Newsom backed an effort to keep the Diablo Canyon plant open until 2030, for example, as climate-linked wildfires and heat waves showed it would be tough for California to lose a big zero-carbon power source in the coming years as it strives to slash emissions.

But the nuclear industry has long voiced concerns over what it sees as hesitancy and unfair treatment in the world of climate finance and ESG, the movement to include environmental, social and governance issues in investing principles.

“Nuclear should be getting credit for ESG, and I’d like to tell you that it’s that simple, but it’s not,” said Maria Korsnick, CEO of the Nuclear Energy Institute industry group, during an NEI event in June. “There’s some financial institutions that look at nuclear and look at ESG, and they struggle to say that nuclear actually supports it.”

Read more at EnergyWire: Is nuclear energy poised for an ESG-fueled comeback?, by Nico Portuondo, published October 4, 2022.

Published by Nucleation Capital in Capital reallocation, Carbon emissions, Carbon markets, Climate change, Energy abundance, History-making, LINKS, Nuclear competitiveness, Nuclear financing, Nuclear-inclusive energy policy, Public companies, Solving climate, Zero emission energy