What About Nuclear Energy?

Supporters of nuclear energy often claim that while solar and wind may have their place in the decarbonizing of our energy systems, nuclear is still a valuable -- and even "irreplaceable" -- part of our energy future.

I have found, however, that the benefits of nuclear are often presented without an acknowledgement of the drawbacks (here's a good example of that, from the Department of Energy). When, in fact, the drawbacks far outweigh the benefits.

The benefits of nuclear energy

Nuclear energy is often touted as a "clean" energy source. Supporters claim it has zero-emissions and is therefore climate friendly; it doesn't release harmful pollutants that contribute to acid rain, smog, lung cancer, and cardiovascular disease; it has a small land footprint, and produces very little waste; and it isn't intermittent like solar and wind, so it can reliably produce baseload power (nuclear power plants have an average capacity factor of 92.3 percent, meaning they reliably operate at full power on 336 out of 365 days per year).

Supporters of nuclear energy claim that if our goal is to move toward clean, reliable, sustainable, and emission-free energy, it only makes sense that nuclear should remain on the table.

The drawbacks of nuclear energy

1. Construction delays

The time it takes to build nuclear power plants is increasing: construction took 5 years in 1970, 15 years in 1980, and as many as 20 years today.

2. Underestimated costs

Because power plants do not earn income during construction, longer construction times translate directly into higher finance charges. No nuclear plant built in the last 50 years in the United States has been at or under budget. According to Congressional Budget Office, the 75 nuclear plants built between 1966 and 1986 were on average three times more expensive than their builders had originally estimated.

In Canada, the Darlington Nuclear Generating Station started construction in 1981 at an estimated cost of $7.4 billion, and finished in 1993 at a cost of $14.5 billion. And, in Augusta, Georgia, as of 2020, the Vogtle Plant is still only half complete after nine years of construction. It is more than five years delayed and has doubled from the original $14 billon cost projection to nearly $30 billion. [1]

3. Nuclear energy is not emissions-free

A 20 year construction schedule means that consumers must rely on dirty coal or natural gas in the mean time. Moreover, fossil fuels are used for mining and refining uranium ore. So, while nuclear may not directly produce greenhouse gasses and harmful pollution, it does so indirectly, by relying on dirty energy sources like fossil fuels and coal. From the view of climate change, it makes no difference. The construction and extraction processes needed for nuclear energy should be included in the assessment of the environmental impact of the energy source.

The Intergovernmental Panel on Climate Change (IPCC) says that we have 12 years to prevent global temperatures exceeding 1.5 °C of warming. Thus, building more nuclear plants now or any time in the near future almost guarantees the crisis that we're trying to avoid.

4. Water use

Nuclear reactors boil water to make steam and use water to keep the reactor cores cool. To avoid potentially catastrophic failure, these systems need to be kept running at all times, and require water at all times. As a consequence, 320 billion gallons of water were consumed by nuclear power plants in the US in 2015. The Palo Verde plant in Arizona uses 20 billion gallons of treated water every year. This water represents about 25 percent of the treated water in the greater Phoenix area.

Is this a sustainable use of treated water? It seems to me the answer is obviously no. Climate change could soon force Arizona into a water crisis, and with 25 percent of treated water diverted for electricity production, they could end up in a real pickle. While on the other hand, solar PV doesn't require any water on a marginal basis, and Arizona has more than enough free solar energy. If we're really worried about sustainability, it's a no-brainer that we should invest in solar, wind, and storage instead.

To make matters even worse for nuclear, some plants draw water from natural water sources, and when they do, fish and other wildlife get caught in the water intake structures. While this is an issue for all power plants with water-cooled systems, the problem is more acute for nuclear facilities. One study investigated impacts from 11 US coastal power plants and estimated that in 2003, a single nuclear plant killed close to 3.5 million fish.

5. Decommissioning costs

Decommissioning power plants is the process of cleaning up after the facilities are retired. The reactors can stay radioactive for thousands of years, so proper disposal is necessary. For US reactors, the expected total decommissioning costs range from $544 to $821 million.

Therefore, investing in just one new nuclear facility means committing to spending more then half a billion dollars somewhere down the line. If we assume that a 1 MW solar farm costs roughly $1 million to install, a 500 MW solar farm could be built for the cost to tear down a single nuclear plant.

And these figures assume no meltdowns or natural disasters. The cost of the Fukushima disaster cleanup is not yet known, but cost estimates are around $100 billion. This is why no private insurance companies are willing to fully insure nuclear power plants.

6. Nuclear can't compete with renewables plus storage

Excluding the cost of meltdown damage and radioactive waste storage, the levelized cost of energy (LCOE) for a new nuclear plant in 2018 is $151/MWh. [2] This compares with $43/MWh for onshore wind and $41/MWh for utility-scale solar PV from the same source. Meaning, as of 2018, a new nuclear power plant costs 2.3 to 7.4 times that of an onshore wind farm or utility solar PV farm, take 5 to 17 years longer between planning and operation, and produces 9 to 37 times the emissions per unit electricity generated. [3]

Additionally, operations and maintenance and fuel costs together are adding 5 percent per year to the cost of nuclear, and will do so for the foreseeable future. [4] This, in addition to the rising construction costs, means that nuclear energy is on a "negative learning curve" -- it's getting more expensive and resource intensive as more plants are built. Typically, the more a good or service is produced, the less it costs. Not with nuclear energy.

A 2017 analysis by Bloomberg showed that over half of US nuclear plants were running at a loss. With the cost of solar, wind, and storage falling every year, nuclear energy is economically unsustainable. The only thing propping up the industry is the massive subsidies and federal support. Take those away and industry will collapse.

References

1. Jennifer Rennicks. "Overbudget, Delayed Plant Vogtle Nuclear Expansion Continues", September 26, 2018 https://cleanenergy.org/news-and-resources/overbudget-delayed-plant-vogtle-nuclear-expansion-continues-2/
2. Lazard’s levelized cost of energy analysis—version 12. https://www.lazard.com/media/450784/lazards-levelized-cost-of-energy-version-120-vfinal.pdf
3. Mark Z. Jacobson. "100% Clean, Renewable Energy and Storage for Everything", Cambridge University Press, December 22, 2019.  https://web.stanford.edu/group/efmh/jacobson/WWSBook/WWSBook.html
4. Seba, Tony. Clean Disruption of Energy and Transportation: How Silicon Valley Will Make Oil, Nuclear, Natural Gas, Coal, Electric Utilities and Conventional Cars Obsolete by 2030. First Edition (2014). Page 167.

References

1. https://e360.yale.edu/features/why-nuclear-power-must-be-part-of-the-energy-solution-environmentalists-climate

Unlocking Renewables with Storage

Adding storage to renewable energy resources changes everything in the energy game. It creates a whole new animal.

The falling cost of solar PV and battery storage

The intermittence of solar photovoltaics (PV) and wind has caused many to question whether we can rely solely on renewables for our energy needs. After all, the sun only shines during the day and the wind is sporadic. But because of the falling cost of renewable generation and batteries, it makes increasingly more economic sense to use batteries to store renewable energy when generation is high and deliver it when it's needed.

In 1970, solar PV cost $100/watt. By 1977, the cost had dropped to $76/watt following several innovations in manufacturing. By 2013, it was 0.65¢/watt, and by 2015, only 0.30¢/watt.

The same is is true for lithium-ion batteries. The cost has gone from $1,160/kWh in 2010 to $176/kWh in 2018.

The increasing demand for these technologies attracts even more investment, which spurs further innovation and even lower costs. This virtuous cycle exponentially improves the efficiency and quality benefits of distributed energy. Soon all buildings -- homes, offices, schools, and businesses -- will be able to produce, consume, and share their own energy.

Walmart, Target, and other "Big Box" Rooftop Solar

Consider Walmart: as of 2018, America's largest brick-and-mortar retailer had 5,358 stores nation wide and 785 million square feet of rooftop space. That's equal to 18,012 square acres, or 28.1 square miles of rooftop. To put that in perspective, Manhattan Island is 22.82 square miles. If Walmart were to cover all of its rooftops with solar PV panels, it would generate about 3.6 GW of electricity during the day. [1]

There is an estimated 16.22 billion square feet of commercial rooftop space in the United States. Collectively that could generate 74.4 GW of solar energy [2]. And that doesn't include parking lot space -- it's feasible that solar PV-covered canopies could double these figures. We could produce as much as 150 GW of solar energy without using any additional land.

The future of the electricity grid

This is how I envision the future of distributed energy: homes, schools, and small businesses can reach net zero energy -- that is, produce as much energy as they consume on an annual basis. And the "Big Box" stores can reach net positive energy and sell what they don't use. Imagine Walmart, Target, and IKEA having charging stations for electric vehicles, battery swapping programs for homes and businesses, and offer retail electricity for the surrounding community. As of 2017, Target had a total of 203.5 MW of solar installed and Walmart plans to install solar in 1,000 of its stores by 2020. By adding batteries to the mix, and with 100% of new cars sold after 2025 being electric, these new markets will take off.

When batteries are used behind-the-meter and paired with solar PV, several value-streams emerge. Batteries provide a fast and high power capacity, which is ideal for peak shaving and peak load minimization; batteries support smart grids and allow networks of homes and businesses to control their own energy use; batteries improve system resiliency by protecting users from blackouts and brownouts; and batteries provide additional value-streams by performing ancillary services for the grid, such as frequency and voltage regulation. All of this adds up to big savings on electricity bills for rate payers.

Below is a 400 kW solar PV installation at the Marcus Garvey Village social housing complex in Brooklyn, New York.

Combined with a lithium-ion battery, shown below, the community is able to reduce its power bill by up to 20%. [3]

Batteries are also being paired with solar and wind farms and used in front-of-the-meter as grid-level energy storage. In 2018, Tesla installed a 100 MW/129 MWh Powerpack system at the Hornsdale Wind Farm near Jamestown, South Australia. [4] The batteries are charged from wind energy and deliver electricity during peak hours, powering more than 30,000 homes. The battery system has allowed the gird to become more reliable and more efficient, which has saved rate payers $50 million its first year of operation. [5]

The project was so successful that Tesla has been contracted to install an additional 50 MW/64.5MWh at Hornsdale, with expansion set to be complete in the first half of 2020.

Warren Buffett is also getting in on the action. He has funded the Gemini project in Nevada, 25 miles from Las Vegas. The project will create 1.19 GW of new power, enough to provide electricity to 230,000 homes. The projects includes 590 MW of battery storage, allowing solar energy to be stored and shifted to peak hours and at night. [6]

The large-scale front-of-the-meter battery storage systems will work in unison with the behind-the-meter systems through energy management controls. Together they will revolutionize the digital, distributed electricity grid.

Alternative energy storage technologies

Some critics argue that lithium-ion batteries are not a safe investment because they rely on rare earth minerals extracted from unregulated countries like the Congo. They say batteries cannot be relied upon as a central component of a new renewable energy infrastructure.

Those critics will be surprised to learn that there are several non-lithium-ion batteries in the works. IBM recently announced a new battery that doesn't use cobalt or nickel – two metals needed for lithium-ion. IBM's new battery is made from seawater, and has a faster charging time than lithium-ion, with 80% charge in less than five minutes when configured for high power. And it has a higher power density and a lifecycle of more than 90%. [7] Additionally, a group of private investors, including Bill Gates, Jeff Bezos, Michael Bloomberg, and Richard Branson, have invested billions into iron-flow batteries, the so-called "next-gen" lithium-ion. [8] And also, the US Energy Department is developing four new energy storage technologies: iron or manganese chemical batteries, non-flammable solid state batteries, multi-valent batteries, and sodium-ion batteries. [9] By 2030, there will no doubt be cheaper, safer, and more efficient batteries made from more abundant and more biodegradable materials. 

There are also a number of alternative storage technologies: compressed air, gravity energy storage, liquified air or cryogenic energy storage, thermal energy storage, and hydroelectric energy storage. Below are two examples of gravity storage that are powered by solar PV:

The death of conventional utilities

Consider the impact of widespread renewables plus storage on the fossil fuel and nuclear utilities. Demand for utility power will continue to drop. Their highest margin product -- peak pricing -- will soon be eliminated. Competition in the retail and wholesale electricity markets will increase as solar plus storage is commoditized and electric vehicles become dominant. The utility's margins will be squeezed, both on the retail side and wholesale side, and a vicious cycle of lower revenue, lower margins, and lower returns will set in. In turn, utility energy costs will go up, making their energy even more expensive, and this, in turn, will feed into the vicious cycle. [10]

Before long, renewables plus storage will also disrupt baseload power, that is, the minimum amount of power needed to be supplied to the electrical grid at any given time. When that happens, the utilities' infrastructure and business model will become obsolete. A new electricity grid will have emerged, one that can provide cheap and clean de-carbonized energy.

References

1. Fessler, David. The Energy Disruption Triangle: Three Sectors That Will Change How We Generate, Use, and Store Energy. 2018.
2. Ibid., Fessler
3. "Brooklyn's social housing microgrid rewrites relationships with utility companies", https://www.theguardian.com/sustainable-business/2017/aug/17/energy-brooklyn-social-housing-microgrid-rewrites-relationships-with-utility-companies
4. See: https://www.tesla.com/blog/tesla-powerpack-enable-large-scale-sustainable-energy-south-australia?redirect=no
5. See: https://www.neoen.com/var/fichiers/20191119-neoen-mr-australia-hprx.pdf
6. "Warren Buffett Is Making a Big Bet on Solar Power", By Avi Salzman. https://www.barrons.com/articles/warren-buffett-berkshire-hathaway-solar-power-nv-energy-690-megawatt-51577995149
7. https://cleantechnica.com/2019/12/18/ibm-changes-the-energy-storage-game-with-cobalt-free-battery/
8. "Gates, Bezos bet on flow battery technology, a potential rival to big bets on lithium-ion", by Tom Connor for CNBC, https://www.vanadiumcorp.com/news/sustainability-news/gates-bezos-bet-on-flow-battery-technology-a-potential-rival-to-big-bets-on-lithium-ion/
9. "Four New Energy Storage Technologies to Power the EV Revolution", https://cleantechnica.com/2019/12/14/four-new-energy-storage-technologies-to-power-the-ev-revolution/
10. Seba, Tony. Clean Disruption of Energy and Transportation: How Silicon Valley Will Make Oil, Nuclear, Natural Gas, Coal, Electric Utilities and Conventional Cars Obsolete by 2030. First Edition (2014). Page 77.

Disruptive Innovation and the Future of Energy

A "disruptive innovation" is one that uproots and replaces an existing technology. The term was coined by Clayton Christensen at Harvard Business School in 1995. [1] His goal was to explain why successful companies ran by intelligent people still end up going bankrupt or get displaced. He describes a process whereby new products or services initially take root in simple applications at the bottom of a market and then relentlessly move up market, eventually displacing established competitors.

While CEOs are intelligent people, they tend to operate within the same paradigm that allowed their company to become successful in the first place. Their infrastructure, mode of thinking, and commitment to the most reliable path to positive return on investment leads to what Christensen calls "sustainable innovations", which are slight improvements on already existing products or services. These innovations allow companies to maintain their corner of the market and to grow in the short term. However, this process of pushing the higher tier of the market through minor improvements unwittingly opens the door for "disruptive innovations" to enter at the bottom of the market. As established companies continue to push their "sustainable innovations", "disruptive innovations" are able to take root and grow. They eventually displace the old technologies and create entirely new markets and business models.

A classic example of a "disruptive innovation" is Henry Ford's Model T displacing the horse and carriage industry. Below is a picture of New York's Fifth Avenue Easter Parade in 1900, with perhaps one car on the road:

And here is the same parade in 1913. Cars had nearly completely taken over:

In just over a decade, the percentage of American households owning a car went from 8 to roughly 80 percent. Several new markets were born: the automobile industry, auto mechanic industry, auto oil and gas industry, and the auto loan industry. General Motors and Dupont invented a financial innovation for auto loans that financed three-fourths of the cost of the car, and consequently, the horse and carriage industry was reduced to a fraction of what it was before the disruption. Even 100 years ago, the disruption of a well-established industry took less than 15 years.

PCs displaced mainframe computers, cell phones displaced landline telephones, digital cameras displaced Kodak, Netflix displaced Blockbuster, digital media displaced newspapers, magazines and books, iTunes displaced CD-music stores, GPS displaced paper maps, etc.

Zero marginal cost

There are many reasons for the success of these new products and services -- they are less expensive, more accessible, more useful, or more appealing. Consider digital photography: No longer did photographers have to pay for film, film processing, or printing. They could simply upload images to their computer and erase the camera's memory. This process could be repeated 10 times or 10,000 times at no additional cost to the photographer. This is the concept of zero marginal cost.

Marginal cost is the cost to produce an additional unit after the fixed cost is paid for. [2] After the camera, memory card, and computer is paid for, each additional photograph is free. Since Kodak and the film photography industry made their money every time a picture was taken, the zero marginal cost of digital photography destroyed their business model. The "disruptive innovation" was due to the convergence of digital imaging and lithium-ion batteries that enabled zero marginal cost photography.

The future of energy and transportation

The fossil fuel energy and transportation industries have a business model similar to Kodak's. [3] The utility companies get paid every time a light is turned on, and the suppliers of coal, oil, natural gas, and uranium get paid for their services. When you drive your car, the oil industry gets a cut.

Tony Seba argues in his book Clean Disruption that distributed solar and wind plus battery storage changes the equation the same way that digital cameras changed the film camera equation. After you install solar panels and a battery, the marginal cost of each additional unit of energy drops to near zero. The ongoing need to pay fossil fuel companies and electric utilities for their products and services is significantly reduced.

With the cost of solar panels and batteries falling every year, renewable energy will eventually disrupt the competitive wholesale electricity markets. The day will come when personal solar and batteries are just as plentiful as cell phones are today. "Prosumers" will both produce and consume energy, and Internet-enabled energy networks will allow trading between homes, business, and electric vehicles.

Building out this new distributed energy infrastructure represents one of the largest wealth creation opportunities on the planet. Dozens of new markets will emerge, with the design, development, distribution, finance, installation, and maintenance of renewable energy systems. And consequently, the largest industries in the world -- the oil, gas, utility, nuclear, and automotive industries -- will be disrupted.

References

1. "What Is Disruptive Innovation?" Clayton M. Christensen, Michael E. Raynor, Rory McDonald. December 2015. https://hbr.org/2015/12/what-is-disruptive-innovation
2. Rifkin, Jeremy. The Zero Marginal Cost Society: The Internet of Things, The Collaborative Commons, and the Eclipse of Capitalism. Palgrave Macmillian, 2013.
3. Seba, Tony. Clean Disruption of Energy and Transportation: How Silicon Valley Will Make Oil, Nuclear, Natural Gas, Coal, Electric Utilities and Conventional Cars Obsolete by 2030. First Edition (2014). Page 5.

Our Energy Future

I'm convinced that technology will disrupt the energy and transportation sectors by 2030. A new energy paradigm is emerging with clean and distributed renewable energy and electric vehicles.

The fossil fuel industry will soon be disrupted by the energy innovations of Silicon Valley. The success of renewable energy is made possible by several converging technologies: the cloud, data analytics, smart sensors, machine learning, artificial intelligence, photovoltaics, wind turbines, and batteries. These technologies will make up the "smart grid", which will be comprised of a network of interconnected "smart buildings", each acting as their own mini power plants. The distributed grid will be scaled laterally, and will elbow out the fossil fuel and nuclear industries. Energy will become decentralized, democratized, decarbonized, and digitized. The day will come when all new energy investments will be with renewable energy generation and storage, and any remaining capital in coal, oil, natural gas, and nuclear energy will become stranded assets.

Electric vehicles (EVs) will soon be less expensive to own and operate than internal combustion engine vehicles. Ride-sharing and self-driving EVs like robotaxies will further the decline of the fossil fuel industry. The EV disruption will decimate the gasoline car industry, taxi industry, parking industry, auto insurance industry, and rental car industry. This is the invisible hand of the market at work. This is creative destruction.

I think the clean energy disruption will have taken shape by 2030 and will be fully mature by 2040. The free market will largely drive the disruption, although I'm hopeful that a Green New Deal will organize the transition. The way we power and move economic life will be revolutionized.

I want to create this blog as a place to collect my thoughts. I will post what I think are the most relevant facts and arguments related to the energy and transportation disruption. It can serve both as a tool for my own educational journey and as a resource for those interested in keeping up with our energy future.