Artificial intelligence, large industrial energy intensive users, and electrification are driving a new market dynamic for more power - and it must also be clean, dependable and affordable. Panellists at World Nuclear Symposium 2024 looked at new business models that can help nuclear to meet new types of end-user needs.

Chaired by Coralie Laurencin, senior director with the Gas, Power, and Energy Futures team at S&P Global Commodity Insights, the discussion titled Power Partners - Connecting end users with 24/7 energy brought together nuclear sector and end-user representatives to explore how the decarbonisation goals of energy users, as well as government policy, will drive the implementation of new nuclear, and the role of partnerships between businesses and industry in transitioning to a low-carbon economy.

Industrial end-users were represented on the panel by Todd Noe, director of nuclear and energy innovation at Microsoft, and Claude Lorea, cement, innovation and ESG director at the Global Concrete and Cement Association.

Decarbonisation of the electricity used directly in the cement-making process accounts for 5% of emissions reductions under the Global Concrete and Cement Association’s roadmap to reach net-zero by 2050, Lorea said. Carbon capture and storage (CCS) during the process will play a much bigger role, accounting for over a third of the roadmap’s emission reductions, but introducing CCS will massively increase the electricity used by the industry.

Lorea explained that the industry currently uses around 100 kWh per tonne of cement, but incorporating CCS will double the industry’s energy needs, leading to a “huge need” for additional green electricity. Many players in the sector, globally, are moving towards “having their own power production” - including solar, wind, biomass and utilising waste heat, she said, but these sources alone will not meet the increasing needs of energy-intensive industries. “Let’s face it: there is no other way than nuclear to reach that demand.”

Data centres too are energy-intensive, and while Microsoft does not disclose its actual consumption figures, it is one of the largest consumers of renewable electricity in the world, Noe said, but nuclear can bring the “firm power” that they will need. Microsoft views nuclear “in the same vein” as renewables.

Business models

Juliann Edwards, chief development officer at start-up The Nuclear Company, and Lou Martinez Sancho, chief technology officer and executive vice president, R&D and Innovation at Westinghouse, explored new business models and how the industry can adapt to work with end-users.

In the USA, Edwards said, the precedent has been that nuclear plants have been built and are operated by single entities and it is important that model which fosters “solid” links between the licensee and the regulator is not disrupted for the sake of safety and operational efficiency. But policy and legislative support is also needed to provide certainty for new projects.

“But if you look at the front end, pre-FID, pre-financial investment date to COD (commercial operation date), you’ve got to have government to assist with financing, give some confidence and alignment that this is a bipartisan topic, so it will survive elections,” she said.

“You’ve got to have the federal support and financial mechanisms there and certainty. But then you also have to have the state community support. So making sure that there’s legislation at that level that is helping with the development costs. We’re seeing a lot of companies help drive forward that momentum. But really, it’s just starting with a framework that’s getting a bankable contract, but bringing as much certainty as possible.”

Also focusing on the USA, Sanchez said the ownership, licensing and operating model is not going to change, she said, but off-takers such as Microsoft can bring certainty which will help to support projects.

“But when you see the pieces of the puzzle, there are many other pieces that actually you can modify, that change in a different way,” she said. "As a nation, I think for large lightweight reactors, we will follow, probably, the traditional way, but the fact that we have off-takers securing a cost and securing a contract for over 20 years, that helps tremendously on pulling those pieces together with the financial side.

“So what I’m seeing right now, at least in the United States, is that there is an alignment between the utility, the vendor, the off-taker, and we need to bring with us the financial community and the project managers, and the risk people.”

The role of government is also a factor, she said. European governments have provided “huge” support for developing and deploying new nuclear. In the US, over the last 15 years or so, most of the federal support mechanisms for nuclear have been focused on technology development but that now needs to change, she said.

"Now we need to move from development to deployment and we need to finalise that equation and those new business models. I think there is also a role in support of the earlier stages … where the government needs to put in place tax credits and different mechanisms that can help to move from research and development into deployment.

“We see similar mechanisms in in Europe, we have seen that as well in the renewables industry. When the right incentives have been put in place, the financial sector feels more secure on the risks that they are taking, and the builds are happening.”

Coming together

Asked about her hopes for progress over the next 12 months, Edwards said the main roadblock was access to capital, and she would like to see banks coming together to understand the long-term nature of nuclear projects.

“These are long duration projects. Again, long term strategy. When you look at integrated resource plans, even forecasted demand, you don’t plan for 20 years … And so if banks can come together and understand the long term value proposition of nuclear of a 60, 80, maybe even 100 year asset and they’re constantly investing in the operational side … we’re going to see such positive momentum. So I think within a year we’re going to see more contracts being actually solidified, at least a pathway to get to a financial investment date with both co-location and large distributed power; we’re going to see more technologies approved by our regulator in our country. Hopefully in other countries as well.”

Sanchez said she thought the next year would probably see the first innovative contracts with offtakers and other measures that will help the financial community to “feel more comfortable, so the utilities can start building and actually we’re going to start seeing some of those contracts happening in the next year, I think we’re going to start building new nuclear”.

We are also likely to see a “huge optimisation of power upgrades” of the current fleet over the next year, especially with improvements in outage management and new fuels, she said, adding: “We cannot forget that [optimising the operation of the current fleet] is one of the actions as well to be able to triple the production of nuclear.”