Cleaning Up Episode 125 Edited Highlights - Kirsty Gogan

Michael LiebreichSo, Kirsty, the big news story that has affected all branches of the energy sector is the Russian invasion of Ukraine. How do you interpret what its implications are for nuclear?

Kirsty GoganThe Russian invasion of Ukraine really put the spotlight on energy security and price volatility around dependence on gas. That led to many countries around the world - Japan, Belgium, and others - reversing their phase-out plans for nuclear energy, but it also led to countries becoming much more proactive about their commitment to new nuclear builds. So, in Europe now, since then, we've seen Finland and Sweden and the Czech Republic and Romania, and the UK as well, and the Netherlands, committing to nuclear new builds.

MLHowever, today, the day that we are recording, is the day that Germany shuts its last three nuclear power stations. Why do you think they are shutting them?

KG They're amongst the highest performing nuclear plants in the world, they're green giants. It's an absolute tragedy, and it’s meant 1.5 billion tonnes of additional carbon emissions. They’ve restarted 14 coal plants during the last couple of years partly in response to the fact that they are taking massive amounts of clean energy off their own grid. So, there's no way that Germany can claim that they're moving away from fossil fuels anytime soon. There's enough evidence now that when you prematurely close perfectly good nuclear plants, that energy generation is replaced with fossil fuels, it's just as simple as that. For the size of its economy, Germany produces more emissions than any other country; It's the dirty man of Europe.

MLOne of the other things that's been going on in the last year and a half is the collapse of the output of the French nuclear fleet. What’s the lesson there for the nuclear industry?

KG Firstly, strength in diversity. One of the key lessons here has to be that more and more diversity in our energy mix is a good way to insulate ourselves from these kinds of risks. And secondly, the importance of maintenance, and of having more of a strategic view in the way that we're investing in our energy infrastructure. It's something that governments are typically terrible at because it does require long term planning and investments in future performance and reliability. One of the things that's really lacking in nuclear is more competitive supply chains, more suppliers, bringing to market a range of different technologies.

MLLet's talk about these big projects. I want to talk about the work of Bent Flybvjerg, who's the leading academic in the world on project management, who’s found that the worst project overruns are in nuclear waste storage and nuclear power. How do you come back from that?

KG One of the key features of all of these projects that run over budget and are very delayed is that they start construction without a completed design. That's the fundamental mistake that has been made repeatedly, particularly in the recent experience in Europe and in the United States. They all did it, and that meant that the supply chain hadn't fully got their specifications, the regulator was getting involved, the actual workforce on the site weren't choreographing the build: they were building the plane while they're flying it. If you have a very intentional, programmatic approach where you are moving your very experienced teams from one project to the next, and the supply chain is in a drumbeat of delivery, as we've seen in France, in Sweden, in Korea, in Japan, even in the United States, we've seen the majority of plants around the world being delivered in a program for $3,000 a kilowatt or less; really competitive, even with renewables and gas plants today. The question is, can we achieve that in the UK?

MLDo I detect less commitment to the gigawatt-scale builds than when we spoke two and a half years ago?

KG I can't help but make the case that the cost outcomes for the big gigawatt scale nuclear plants really are a choice, that you can achieve good outcomes. And I do think we need to replace our gigawatt-scale fleet. But I think that the really big game is absolutely in Small Modular Reactors and micro-reactors. But I would make a caveat that I want to see much more of a manufactured product based approach for the Small Modular Reactors, not just mini construction projects, which I think is a big risk.

MLLet's talk about SMRs: Rolls Royce SMR have a 470-megawatt reactor design.

KG Rolls Royce, obviously, they're a manufacturing company, so that's a good start; they're good at making things in factories, and there's many really good features about the Rolls Royce SMR that suggest that a lot of the plant will be prefabricated, made in a factory, delivered to site. It still sounds like a lot of pieces that you have to assemble on site, but it's certainly not as scrappy as a full on-site construction project where you're literally pouring the concrete. NuScale is the first SMR to actually get a license, and now they're marketing to many countries around the world that are super interested, and that's 77 megawatts.

MLBut to catch up with where wind and solar are today, if you wanted to do that with a 100-megawatt SMR, for example, you would need to build 5400 of them… You really think you're gonna get there?

KG Let me zoom in a little bit here to make it a little bit more easy to imagine how we might deploy that kind of scale of nuclear. So, we have a design which is a 20-gigawatts electric facility, which is sized to be like a medium-sized refinery. One of these sites could accommodate 36 of these high-temperature reactors. If we were to do that, for the UK, you would be making very large amounts of hydrogen, but crucially, you could also be connecting it to the grid, so that during a dunkelflaute, you could potentially then be directing that to the grid. And then you've got really good economics throughout your hydrogen production, and then you don't have to invest huge amounts in energy storage to support your renewables.

MLSo, what you're postulating is that it's an SMR, but actually, it's a really big power plant, you're just going to put lots of them together? Because I can't see how you're going to build 5400 of these things in individual locations.

KG One of the ways that we're trying to insert nuclear more into that discourse is by targeting it at really tough-to-solve parts of the decarbonisation challenge, like coal, for example. There are energy services that are a little bit away from the public perception, which tends to focus on households' energy use, and electricity use in particular. There's the other 80% of our energy need out there that can be met through these kinds of plants. A lot of big, industrial energy users in the oil and gas sector and in the chemical, steel, cement, glass industries - those big industries that build all of the infrastructure that we need in the world - are massive energy consumers; they have 2030 emissions reduction targets, and they're looking around to see how they're going to meet their need for not just power, but also for 24/7 power, and also for high temperature heat. And I think they're getting interested in the role nuclear can play.

MLKirsty, looking at 2030, you’ve referred to putting nuclear on a “fast track” - it's not fast at all. There's nothing fast about it…

KGThis is exactly the kind of conversation that I think that we should be having, because this conversation is really about identifying the big challenges, and what kind of strategic intent might be necessary to solve them. If we were having this conversation outside of the context of the climate emergency, then I think you'd be very reasonable in saying, this is too difficult, it's going to take too long, it's going to require too much investment... Looking back at the COVID pandemic, to bring a vaccine to market you would have said, it'll take 10 years, and it took 10 months. I'm arguing that we should at least have a look at what the critical path could be to bring some of these technologies to market at the speed and scale that we need, and where we can actually speed things up. If we really think it's an emergency - 27 years to 2050, Michael….

MLI love that Olkiluoto is finally working; I love that Taishan is finally connected back to the grid. I do like the progress on SMRs. But when do you think that we will actually see nuclear doing the hockey stick curve that wind and solar have managed?

KG I would bet that in one year from now, we will see a very significant shift in the customer voice, the demand for heat and hydrogen and power from nuclear energy for industrial decarbonisation. I think that a lot of large energy users, oil and gas, and industry, are looking at their 2030 trajectory; here we are in Spring 2023, seven years away, to their milestone, and I think that in a year from now, we're going to have seen many more of those big players put their hands up and say, we want one of those, or we want a hundred of those.

MLWhat you're talking about is you're getting to the point where there's just one more roll of the roulette wheel before 2030…

KG I think if the industry, if the nuclear sector misses that next roulette wheel spin, which is going to be this time next year let's say, then we can forget about it for 2030. I don't think it’ll be a case of doing one or two. These industries have the answer to the big supply chain capability question, they have massive manufacturing capability, and the oil and gas industry, the chemicals industry, they're really good at organizing their supply chain to meet their needs, and they'll send a signal, which is large enough, significant enough that it will generate the investment in the supply chain that's needed. Right now we're laying the foundations, and what we want to see in 2030-2040 is the delivery.