2021 ANS Virtual Annual Meeting: CEO roundtable

June 18, 2021, 9:37AMNuclear News

The 2021 ANS Annual Meeting brought together three leading chief executive officers from the nuclear industry on June 16 for a discussion centered on the future role of nuclear energy deployment and the challenges of portfolio management during a time of net-zero carbon goals.

Participants included Jeff Guldner, CEO of Pinnacle West Capital Corporation and its subsidiary Arizona Public Service Company; Jeff Lyash, CEO of the Tennessee Valley Authority; and Jay Wileman, CEO of GE Hitachi Nuclear Energy.

Zacharia

Moderating the session was Thomas Zacharia, director of Oak Ridge National Laboratory and general chair of the Annual Meeting, who noted in his introductory remarks that the Biden administration’s goal of net-zero carbon by 2050 presents a number of challenges, with many factors contributing to and influencing them, including regulated versus deregulated markets and regional variations in future carbon-free or carbon-neutral energy sources, as well as economic drivers. He also said that the expansion of nuclear energy has the potential to be a cornerstone of future energy strategies.

“Growth of nuclear is also likely in parallel with other carbon-free energy developments, such as the expansion of renewables, energy storage, and carbon sequestration,” Zacharia said. “The economics of clean energy deployment, the maturity of nuclear technologies, and the associated risks from technology and cost will all impact strategies for the pursuit of net-zero emissions.”

Zacharia also highlighted the “special role” that the national laboratories play in supporting nuclear energy and carbon-free energy deployment, pointing out that ORNL offers significant resources and expertise to industry for grid infrastructure and security, TRISO fuel development, test beds for early-stage nuclear designs, and demonstration studies for energy portfolio mixes. “Our research also holds great potential in shaping the cities of the future, including the important role nuclear can play in economic development and prosperity across our nation,” he said. “Nuclear energy deployment can make an enormous positive impact on regional communities, from delivering more carbon-free energy to supporting clean energy jobs.”

Guldner

Guldner: Guldner reminded the audience of Pinnacle West’s commitment, made in January of last year, to produce 100 percent carbon-free electricity by 2050. “We decided to go on an absolute basis,” he said. “We didn’t want to talk about net zero. We think it’s important to send a signal to the innovation community and investors that we need to have the R&D that will actually get us to zero on the system.”

The company also has interim targets of 65 percent clean energy by 2035 and a full exit from coal by 2031, according to Guldner. “Importantly, we’re 50 percent carbon-free today, and that’s largely because of the contribution that Palo Verde makes,” he said. “We would be nowhere near that if we did not have that significant of a nuclear presence on our system.”

Pathways to realizing Pinnacle West’s 2035 and 2050 goals, Guldner said, include optimizing the company’s existing power sources, which means, among other things, looking at the relicensing of Palo Verde in the 2040s; transportation electrification, which can help build load and help mitigate negative pricing; solving the problems of both short-term and long-term storage; and governmental assistance. “We need significant support for innovation and R&D, and I think that’s a key role for the federal government to play,” he said. “Another thing is the importance of flexibility in allowing us to get there. There’s so much diversity in our nation’s electric systems and the different challenges we’re all facing on this journey. It’s really going to be tough to set a command and control, centralized policy—here’s how we’re going to do it and then everyone move down that path—so keep as much flexibility as possible so that we have the ability to be nimble and to adapt to local systems.”

Lyash

Lyash: TVA has reduced its carbon emissions against the 2005 benchmark by 63 percent as of the end of 2020, Lyash stated, attributing the accomplishment to the retirement of approximately 60 percent of the utility’s coal generation; the completion of Watts Bar-2 (the only new nuclear unit commissioned so far this century); investment in the nuclear fleet with power uprates, including the nearly 500 MW uprate completed last year at Browns Ferry; and the construction of some high-efficiency gas-fired combined cycle plants.

According to Lyash, TVA has established a “strategic intent and set of guiding principles” to help it navigate the next several decades. It has committed to reducing carbon by 70 percent by 2030 and by 80 percent by 2035, he said, at which point the utility will have retired all of its remaining coal units. As for net zero by 2050, Lyash described that goal as “aspirational.” “We believe we can get to 80 percent by 2035 with existing technology,” he said, “by continuing to leverage our nuclear and hydro fleets, adding high-efficiency natural gas as a bridge, and adding 10,000 MW of utility-scale solar, with another 2,000 MW of solar at the distribution level.”

Reaching the goal of net zero, Lyash said, involves a five-point “tech agenda”: (1) the electrification of the economy, (2) low-carbon fuels, (3) carbon capture, (4) long-duration storage, at a price substantially lower than today’s, with characteristics that don’t yet exist, and (5) new nuclear, including small modular reactors and Generation IV reactors.

“We’re focused on deploying a small modular light water reactor at Clinch River,” Lyash said. “We have the country’s only early site permit for an SMR. We think that can have a material impact in the 2030s and help us reach that goal. And then, looking at Generation IV reactors, we’re in a partnership with Kairos for its molten fluoride salt reactor, along with Oak Ridge, to look beyond the 2030s into 2040 and beyond. We think that is the pathway to net zero. Extend the existing fleet and maximize its contribution, and build new nuclear if we have the right product, the right team, the right business model, and the right risk in the 2030s.”

Wileman

Wileman: GE Hitachi has set a goal of carbon neutrality by 2030 in all of its operations around the globe, according to Wileman. “I think that working on this energy transition is key, whether it’s carbon capture or hydrogen for gas turbines, or wind and solar, or nuclear,” he said. “And when I say nuclear, I mean the existing fleet, where GE Hitachi is working very hard to bring new innovations to the fleet to keep them competitive and operating through their 60- and perhaps even 80-year lives.”

It is also critical, Wileman added, to look toward advanced nuclear. “At GE Hitachi, we’re working on our design, the BWRX-300,” he said. “To me, nuclear is a requirement to close that 80 percent to 100 percent gap to completely decarbonize electricity generation. And you have to have new nuclear in that case as well. And to be at the table, competitive, you have to have a solution that actually provides the cost targets that are workable in the industry. They’ve got to be able to be supported by utilities’ balance sheets to move forward. So we’re enthusiastic about the BWRX-300. We’re targeting less than $3,000 per kilowatt hour, about a billion-dollar project for those 300 MW, and we’re continuing to work on the breakthroughs in this new nuclear space. They may be called ‘small modular reactors,’ but actually I see the ‘S’ as standing for “simple.” It’s really designing things so that you can get that cost out of there and truly be cost-competitive.”

GE Hitachi is also working in the Generation IV space, Wileman noted, partnering with TerraPower to develop the Natrium sodium fast reactor, with support from the Department of Energy’s Advanced Reactor Demonstration Program (ARDP). “I believe that Gen IV is the next parallel path that gets you [to net zero] in the longer term,” he said.

From the roundtable: The CEOs’ opening remarks were followed by a roundtable discussion, with questions supplied by Zacharia, whose initial query was, “What do you see as the obstacles to new nuclear builds in the U.S.?”

Guldner: “I think one of the important things is looking at the impact on the balance sheet, particularly for a company like mine,” Guldner said. “We’re a midcap electric utility, so our balance sheet is certainly more challenging than one of the big utilities to deploy new nuclear, and even at a billion dollars, you’re in a little bit of a bet-the-balance-sheet on a technology. That’s just a practical reality. And so I do appreciate, as we think about small modular, thinking about how to keep that cost down, how to continue to keep it effective.”

Also important, Guldner noted, is stakeholder engagement. “When I started, I don’t think there was much interest from a lot of the technology companies in new nuclear,” he said. “Their focus was on solar, wind, and battery storage. I’m really encouraged by some of the change, as people are getting more focused on the urgency of decarbonization, and so they become more agnostic on the technology. If nuclear gets you there quicker, then we should be talking about nuclear. When you have spokespeople like Bill Gates, I think that’s huge in terms of trying to buy that stakeholder perception, but it’s still an issue that we have to think through—how do we build stakeholder engagement so that they’re supportive of it.”

Lyash: “For Gen IV reactors, I think it’s a technology and an engineering issue to solve, so I’m going to focus my remarks on the light water small modular reactor. We need to get visibility to an nth-of-a-kind competitive cost for SMRs in order to commit to a program that will produce that. And that nth-of-a-kind cost has to be competitive with other energy forms in a carbon-constrained environment. We need to think about either the direct price of carbon or the social cost of carbon and have a view to a competitive nth-of-a-kind product. That’s important.

“The second point I would make is, we need to be very clear and transparent about the first-of-a-kind cost of developing and deploying that reactor—that there will be, there always has been, a premium for the first-of-a-kind cost. And for TVA, we cannot ask our customers to bear the first-of-a-kind premium when that’s really a price to be paid to develop the product that can be used nationally for the country to drive down carbon. And that will create a product for the United States to export around the world.

“The second element for me is addressing that first-of-a-kind cost burden. I think this is a place where partnerships can play an important role, like the one we have with Oak Ridge National Lab. But there’s also a very clear role here for the federal government, in order to encourage, develop, and support this first of a kind. We see that in the ARDP pointed at Gen IV reactors that are on the horizon. I think we need a similar or companion approach to deploy light water small modular reactors that can have a material impact in the 2030s, because if we don’t have that line of sight, we’ll have to go in another direction because we need that impact 10 years out.

“The last thing I’d mention here that I think we have to focus on is light water SMRs. I don’t see the challenge as technology, licensing, fuel design—that’s all based on 50 to 60 years’ worth of operation. The challenge for us is deployment risk. We as an industry have not done the job we need to do at modernizing our project management, construction, supply chain, advanced manufacturing, and risk mitigation technique, to take a design and actually deploy it on schedule and on budget. And getting support and clarity around that, I think, is critical.”


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