On July 31st, the Vogtle 3 nuclear power plant in Georgia officially entered commercial operation, adding 1.1 GW of nuclear energy to the region’s grid. It will add more annual zero-carbon electricity to the Georgia grid than all utility-scale solar and wind energy production in the state currently, an amount that will double when Vogtle Unit 4 comes online, expected in early 2024. This is without a doubt a win for climate, providing more than three times the amount of carbon-free energy to the Southern Company system as all solar energy installed on that system to date.
At the same time, the Vogtle experience illustrates the serious changes we need to make for nuclear energy to play a major role in a decarbonized energy future. The construction on Vogtle 3 and 4 has taken a decade to complete, at a cost that doubled from the estimated $14 billion. Several issues ranging from incomplete engineering design finalization, challenges ramping up supply chain capability and qualification, and inadequate project management and execution caused the delay and cost overrun. In addition, the projects ran into nuclear regulatory and licensing challenges, as well as construction delays and financing challenges, including supplier bankruptcy, a change in construction partner, and more. These challenges of the Vogtle project reflect broader issues of the nuclear energy industry, challenges that must be solved in order to meet energy demand in a zero-carbon, global economy.
What can we learn from the Vogtle experience?
The value of nuclear energy
There are two consistent themes that emerge from nearly every major study of how to decarbonize energy systems. First, we need to electrify as much of the economy as we can, which means doubling or tripling the amount of electricity we produce in the next few decades.1 Second, while resources like wind and solar can carry much of the burden, renewable generation output varies substantially by season, and we will need firm, dispatchable, always-available zero-carbon sources to complete the power portfolio.2
Nuclear energy is one clear option to provide zero-carbon electricity as well as clean thermal energy.
Nuclear energy has two other major advantages in a land- and materials-constrained world: It is relatively compact in spatial requirements for generation due to its high energy density characteristics (see figure 1 below) and requires considerably less concrete, steel, and other critical materials per unit output than other zero-carbon energy sources (see figure 2 below). Both factors are key considerations for developing large, critical energy infrastructure in the United States and around the world.
Studies by the International Energy Agency and others conclude that nuclear energy production might need to double or quadruple by midcentury to minimize costs and manage reliability of a fully decarbonized electric system. In the U.S. alone, the Department of Energy (DOE) estimates 550-770 GW of new clean, firm capacity will be needed to meet 2050 net-zero emissions targets.
But that won’t happen unless new nuclear energy can be delivered at predictable and reasonable cost and within an acceptable time frame. And the Vogtle experience shows how much has to change for that to be achieved.
Figure 1: Nuclear needs small amounts of land to deliver big amounts of electricity
Figure 2: Energy return on investment
But that won’t happen unless new nuclear energy can be delivered at predictable and reasonable cost and within an acceptable time frame. And the Vogtle experience shows how much must change for that to be achieved.
What we’ve learned and what needs to change
Some of these shortcomings can be laid at the feet of what are sometimes called “first-of-a-kind” (FOAK) problems. But much of it can also be attributed to overall poor project management. Analysis of successful nuclear energy projects that have been delivered within a reasonable time and budget identifies the following characteristics:
- Full engineering design before construction
- Unified overall project responsibility
- Explicit attention to cost management as a goal, including performance targets
- Multiple units of a demonstrated reactor design
- Efficient regulation that supports learning as projects develop
Most recent nuclear energy projects deployed in the Western Hemisphere have been challenged by some or all these factors, and the Vogtle project was no different — lacking all of these attributes.
But there is an even deeper problem at play. Vogtle represents the baroque culmination of a nuclear energy industry characterized by large one-off construction “projects” that rely heavily on customization, specialty components and materials, and unique manufacturing capabilities and requirements. This increases project costs and limits potential suppliers from participating and adding value. The challenges faced by the Vogtle project, such as delays, cost overruns, and regulatory issues, are emblematic of the broader challenges faced by the nuclear energy industry as well as other large, complex infrastructure projects.
All of this must change. And quickly.
Unlocking deployment requires significant cost reductions, which occur when we have multiple deployments of the same design. While initially, capital costs for these projects may be higher than desirable (~$6200/KWe as compared with $3,000-$4000/KWe to make nuclear energy fully competitive), costs will come down with repeated experiences with the same design.
Among other needs identified in a recent DOE analysis, cost reductions can be driven by increased standardization across various project expense categories. “Codified construction processes or process management” should “create a ‘playbook’ for project construction,” reducing labor costs. Similarly, component standardization should expedite manufacturing, resulting in further cost savings and potentially further benefiting process standardization.
More fundamentally, the nuclear industry needs to move from a “project” model to a “product” model. Production of nuclear plants needs to proceed as if they are Boeing 737s, not customized, grandiose cathedrals.
Similar insights were reflected in a report conducted by McKinsey & Company early this year, which found a clear need to “standardize designs, use replicable construction models, repeat builds, and increase modular construction to drive down costs and improve efficiency.”
A potential policy path forward
In short, to enable nuclear energy to make a meaningful contribution to global decarbonization, we need a radical rethink of how we conceive, finance, build, regulate, and license nuclear technology. Incremental adjustments to current institutional arrangements will not do the job, falling short of a sustainable scaling up of new nuclear.
We need an overhauled industrial, regulatory, and licensing ecosystem that produces and delivers standardized, commoditized, cost-competitive products rather than costly and risky multi-decade projects. These products must be cost-competitive ($3,000/kw or less), with low-risk delivery times of 3-5 years or less, easy to license globally, financeable on near-normal commercial terms, suitable for deployment in the developing world where most emissions and energy demand will come from, and capable of decarbonizing sectors such as alternative fuels, like clean hydrogen and ammonia, and industrial heat as well as electricity.
The U.S. can help drive this transformative effort. But more ambitious action is needed at home, and on the global stage, to create a global nuclear ecosystem that can deliver hundreds of gigawatts per year, roughly ten times the current global build rate.
Elements of a transformative strategy include:
- Public-private collaboration to enable a commoditized product ecosystem, with maximum standardization and recategorization of nuclear and non-nuclear grade components;
- Public policies that drive large orders enabling repeat deployment of standardized designs;
- A strategic RD and D program, much like DOE’s “Earth shot” program for solar and hydrogen, to drive nuclear capex costs near or below $3,000/kw;
- An innovation program targeted at nuclear energy applications for zero carbon fuel production and industrial heat;
- New global initiatives to facilitate multi-national design certification, as well as providing the resources to enable the licensing nuclear reactors in newcomer countries, potentially to include establishment of an International Bank for Nuclear Infrastructure to catalyze global expansion;
- Provision of a “sandbox” environment to allow for live, time-bound demonstration and testing of new nuclear energy designs under regulatory oversight;
- Reform of U.S. Nuclear Regulatory Commission licensing practices for new advanced designs, to focus on performance in order to realize the promises of previous acts of Congress;
- Measures to establish a new model for low dose radiation standards in order to support appropriate safety regulation;
- Measures to ensure socially and environmentally responsible uranium sourcing;
- A whole-of-government program to facilitate re-use of retired fossil generation sites for new nuclear build;
- Measures to ensure availability of high assay low enriched uranium to support advanced technology deployment; and
- Establishment of a new national regime for managing nuclear waste.
Nuclear energy has the potential to play a powerful part in a comprehensive climate management strategy. But for that potential to be realized, we will need transformative change in the business, delivery, financing and regulatory model. The climate can’t afford more Vogtles.
1 The International Energy Agency (“IEA”) World Energy Outlook estimates electricity demand will increase by 150%, from 28,000 TWh in 2021 to 73,000 TWh in 2050 under the net zero scenario. This includes conservative estimates of population growth and continued limits to energy access in developing countries. IEA, World Energy Outlook 2022, at 44 (2022)
2 A review of 7 national studies found the average clean firm power share to be 35% of the projected net-zero generation mix. See The NorthBridge Group, Review and Assessment of Literature on Deep Decarbonization in the United States: Importance of System Scale and Technological Diversity, at 11 (2021)