Alliances or rivalries?

26 April 2023

In an industry like nuclear, which is so different to its competitors, it is an interesting thought experiment to ask ourselves what we really wish it would be like and whether it would really be like the reality?

What would be a dream version of the nuclear industry? We would surely want lower prices for our products, with healthy and open competition. We would want technology to take a back seat to its application and for innovation to be more incremental. We would certainly prefer to have lower barriers to entry so that the number of countries using nuclear energy would be in the 100s, rather than in the 30s, like today.

We were close to achieving this at one point in history with CANDU technology but missed our chance. We have to be careful not to miss out again in the transition to small reactors.

The CANDU version of a pressurised heavy water reactor was developed in Canada and went on to be used there as well as in Romania, Argentina, South Korea and China, while its derivatives are the mainstay of India’s nuclear sector. The UK was also interested in the design in the 1960s and demonstrated a version of the technology.

What if there had been, by design or by chance, a coalition of companies from these countries supplying CANDU technology according to some broadly standardised features? There could be vendors that compete with different variations, while each country’s contractors and supply chain would form a competitive ecosystem of goods and services around the base technology, and this would grow with every country that introduced CANDU to its energy mix.

CANDU has a lot going for it. It’s a workhorse that can run on almost any fuel: natural uranium or slightly enriched; it can consume recovered uranium and plutonium from used LWR fuel; it can even run on thorium. CANDU can also be fuelled by downblended HEU. The machine itself does not need the large heavy forgings of light water reactors and a lot of its parts can be made in the purchasing country. There are advantages for buyers too, from newcomers to the longest-established pioneers.

CANDUs can be refuelled while online, which is a neat feature that hasn’t lived up to its promise, but nevertheless operational runs of 962 days by India’s Kaiga 1 and 894 days by Canada’s Pickering 7 hint at what might have been routine with a larger community around the technology.

Even the CANDU lifecycle of extensive refurbishment after 30 years of operation is healthier than the equivalent in light water reactors, where licence extension is a smaller job that tends to come a decade later. With a large enough fleet, this kind of predictable work would be amply sufficient to keep vendors’ skills up to scratch. Indeed, new build of CANDUs has come onto the agenda in Canada now its industry has a few successful refurbishments under its belt (see NEI, April 2023, page 36).

This is a vision of a large, competitive global market in which big money could be made, even while the cost of the power plants would surely be lower and much more competitive than we see now for large LWRs. What I am describing is more like a ‘normal’ industry than the kinds of arrangements we have become used to in nuclear: segregated markets with lumpy orders for a few units at most, separated by years of building nothing. It would have lower to barriers to entry for new countries, little gatekeeping of technology and higher security of supply for users as a result.

But sadly, none of this happened. Instead, national interests prevailed and we stayed with a system dominated by national champions and heavy industry giants, each of which had its own unique product – not that those products were even very different.

Large LWRs, whatever the vendor, are essentially the same machine. The selection of reactor designs has been more down to preference than performance, or even price. In some ways the reactor market has been like a car showroom that only stocks BMW, Mercedes and Volvo: a buyer is faced with a range of options that are all good, that are all reliable, that are all safe. The choice between PWR or BWR has been akin to choosing a petrol or diesel engine – there are pros and cons but you won’t go wrong no matter which one you choose.

You might have noticed this omits one big factor: geopolitics. The buyer’s relationship with the salesman is usually more of a factor than anything else. When a user selects a technology they bind themselves the supplier for decades, and sometimes its home government too. Indeed, an uncomfortable number of reactor sales have been state-to-state deals, negotiated alongside sales of other prestigious national goods like fighter jets.

As the bulk of today’s real life industry scrambles to remove Russian products from the chain, we can muse on whether this kind of issue would be easier to handle for utilities in a global CANDU market. The war in Ukraine, among other things, should make clear that nuclear would have been much better off with both of its feet firmly in the commercial world.

Back in the real world, we are now on the verge of rolling out small modular and advanced reactors and this puts a range of divergent futures before us once again. There has been a resurgence of national teams pushing package deals based on flagship products.

Russia and China already took the lead and are operating demonstration units for their own markets. Elsewhere, the UK is pushing Rolls-Royce, France has directed EDF to develop its NUWARD design and India recently announced that it wanted to develop its own SMR to name just a few. But can any of these keep up with designs like GE-Hitachi’s BWRX-300 or NuScale which have now started racking up orders, or even the rest of the US scene with the array of advanced reactors being pushed along by the Department of Energy with more funding than other countries can even imagine?

On the other hand, all of the new small reactors have been designed to rely as much as possible on off-the-shelf components, which promises a more open entry to become a nuclear supplier. This applies especially to low-pressure designs like the molten salt reactors. This approach is giving them huge potential to realise ambitious scale when mounted on barges like Seaborg’s SMR offering.

It has always been unlikely that more than a handful of small reactor designs would succeed commercially, yet most of the vendors still subscribe to a winner-takes- all mindset. Perhaps it will soon be time for technology vendors to think about alliances and licensing, rather than rivalries, to create the biggest market for everyone when small reactors really take off.

Jeremy Gordon is an independent communication consultant with 18 years of experience in the international energy industry. His company Fluent in Energy supports partners of all kinds to communicate matters of clean energy and sustainable development.

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