IAEA’s Grossi Calls on World Bank to Fund Nuclear Energy

• IAEA’s Grossi Calls for World Bank Funding for Nuclear Energy
• European Investment Bank Calls SMRs “Bankable”
• NRC Sets Path Forward for Part 53 Proposed Rule on Advanced Reactor Licensing
• Amazon Acquires Talen’s Nuclear Powered Data Center
• Fuel loading Begins at Indian Fast Breeder Reactor
• Great British Nuclear Buys Wylfa and Oldbury sites

IAEA’s Grossi Calls on World Bank to Fund Nuclear Energy

• The multi-lateral funding agency hasn’t invested in nuclear energy since 1959.

In a wide ranging interview in the Financial Times on March 4th IAEA Director-General Raphael Grossi called on the World Bank, and other development banks, to fund new nuclear energy projects.

He warned that failure to do so would be a major setback for energy transition. In a pointed criticism, Grossi told the FT that the refusal of the World Bank and the Asian Development Bank to fund new reactors puts them “out of step” with the wishes of their shareholders. (Image: Microsoft Bing AI via DALL-E 3)

The IAEA estimates that in order to meet the goals of the Paris Agreement on climate by 2050 that annual investments in nuclear energy would need to double to $100 billion globally by 2030.

Grossi added that there has been a “sea-change” in attitudes towards nuclear energy and climate change. He said Russia’s invasion of Ukraine has pushed energy security to the top of priorities for policy makers globally. At the COP28 global climate meeting in the UAE last December the heads of 22 countries called for a triple scale expansion of nuclear energy by 2050.

Grossi isn’t alone in his advocacy for change at by development banks. The FT reported that William Magwood, the head of the OECD Nuclear Energy Agency, said he is also adding his voice to Grossi’s lobbying effort.

Magwood told the FT that he’s aware of efforts to create a separate nuclear development bank to fund new reactors. However, he also said he thinks that creating new nuclear development program offices in existing banks is a more likely outcome.

Not everyone with ideas about global funding of nuclear energy thinks the multi-lateral banks are up to the task. In a post on Linked in, Daniel Dean, Chairman of International Bank for Nuclear Infrastructure (IBNI), wrote;

“It may be difficult for European Investment Bank and other multilaterals to be effective in supporting nuclear given shareholder/governance issues, capitalization, expertise, standards, competition, etc. that are all unique to nuclear finance.”

He said a stand along effort, like the IBNI, “offers a novel, innovative and comprehensive solution that is specifically designed to overcome all of these issues in the very near term.”

Some of Dean’s views may be related to the policies of the Asian Development Bank. The FT reported that it does not finance nuclear energy projects due to “low public acceptance, risks of nuclear proliferation, safety issues, and high investment costs.”

US Pressure on World Bank with Legislation in the House and Senate

In the US the FT reported that Rep. Patrick McHenry (R-NC), who chairs the House Financial Services Committee, told the FT that US funding of nuclear energy is “critical” to meet the competitive threat of exports of reactors from Russia and China especially to developing nations.

In February, McHenry and the Chairman of the Digital Assets, Financial Technology and Inclusion Subcommittee, French Hill (R-AR), reintroduced the International Nuclear Energy Financing Act. This legislation, first introduced in 2021, would bring back financing for nuclear power at the World Bank and other international financial institutions. (Bill Text PDF file) (Committee backgrounder white paper)

The International Nuclear Energy Financing Act would require the United States Executive Director at the World Bank to advocate and vote for financial assistance for nuclear energy. The bill would also permit U.S. representatives at other international financial institutions – including regional development banks for Asia, Africa, Europe, and Latin America – to push for nuclear projects. Taken together, the multilateral development banks can commit over $100 billion in annual financing.

On the Senate side, in January 2023 U.S. Senators Joe Manchin (D-WV), Chairman of the Senate Energy and Natural Resources (ENR) Committee, and Jim Risch (R-ID), Ranking Member of the Senate Foreign Relations Committee, reintroduced the International Nuclear Energy Act of 2023 (INEA) S.826.

Initially introduced in the 117thCongress, the bipartisan legislation promotes engagement with ally and partner nations to develop a civil nuclear export strategy and offset China and Russia’s growing influence on international nuclear energy development.

The International Nuclear Energy Act of 2023 would:

• Support the establishment of an office to coordinate civil nuclear exports strategy; establish financing relationships; promote regulatory harmonization; enhance safeguards and security; promote standardization of licensing framework; and create a nuclear exports working group.
• Create programs to facilitate international nuclear energy cooperation to develop financing relationships, training, education, market analysis, safety, security, safeguards and nuclear governance required for a civil nuclear program.
• Require a cabinet-level biennial summit focused on nuclear safety, security, and safeguards, and to enhance cooperative relationships between private industry and government.
• Establish a Strategic Infrastructure Fund Working Group to determine how to best structure a Fund to finance projects critical to national security. (full text)

& & &

European Investment Bank Calls SMRs “Bankable”

• Nuclear Energy can be essential for energy security in Europe

(NucNet) In an interview a spokesman for the European Investment Bank told the wire service that nuclear energy projects – potentially including research and development of small modular reactors (SMRs) – can be eligible for financing because they can be “bankable” under strict economic assessment criteria

The EIB told NucNet it is ready to finance research and development SMRs as the sector “can be essential for the strategic autonomy of Europe.”

“It’s true that we haven’t financed greenfield nuclear power generation in more than three decades. There are various reasons for that: any project that we finance must be “bankable”, meaning that we apply strict economic assessment criteria,” the EIB spokesperson said.

“Each project is assessed on its own merits, depending on economic and financial viability, environmental viability, and technical viability. Europe needs to be present in those technologies, which can be relevant in meeting the Paris climate goals.”

Solving EU Bloc’s Differences Could Be A Challenge

According to George Borovas, head of the global nuclear practice of international law firm Hunton Andrews Kurth, solving the significant differences between EU members states relating to new nuclear development would be the biggest challenge to any EIB vision to support SMR projects in Europe.

“Over the past few years, the tide has unquestionably turned as most EU members are either reversing their nuclear phaseout plans, expanding their current fleets, or planning for new-build programs.”

“It is very likely that there will be a push to secure direct funding for nuclear projects,” said Borovas.

“Just like all major infrastructure projects, nuclear power presents many benefits that are long-term and sovereign in nature. These benefits are not necessarily captured in the economics of one project and may require sovereign support in the form of direct funding.”

Borovas said the support of organizations like the EIB, the World Bank, the European Bank for Reconstruction and Development, the proposed International Bank for Nuclear Infrastructure and export credit agencies, would signal that “an individual project has been properly de-risked allowing for commercial investors to consider investment.”

“Addressing climate change, energy security and sustainable development requires nuclear power. For the EU and its member states, now is the time to show their support in any form that is necessary to make these projects a reality, quickly.”

Last month, Czech finance minister Zbynek Stanjura said the country could look to EIB funding for new nuclear construction. Stanjura said “changes in the energy mix, including an increased role for nuclear power” were one of the “strategic areas” that would now not be covered by state funds.

Earlier this week, a 12-nation European Nuclear Alliance* said momentum in the EU in favor of nuclear energy must now be converted into a comprehensive framework for nuclear development, exploring essential policies including financing. The alliance called for the formation of a working group on financing for new nuclear. The group would explore financing instruments such as support from the EIB or the EU’s Innovation Fund to support the deployment of large-scale reactors and SMR technologies.

Yves Desbazeille, director-general of Brussels-based industry group nucleareurope, told NucNet the demand for decarbonized electricity is expected to grow significantly over the next decades and the EU needs to ensure that it is providing adequate financing for the development of European net-zero sources of energy,

“Financing mechanisms which can provide not only direct support but could also encourage private investment need to reflect this reality.”

& & &

NRC Sets Path Forward for Part 53 Proposed Rule on Advanced Reactor Licensing

The Nuclear Regulatory Commission (NRC ) has directed the staff to publish a proposed rule and draft guidance to establish a licensing process for commercial nuclear power plants that is risk- informed, performance-based, and technology-inclusive.

This will be the first regulatory framework developed for advanced technologies and designs that includes non-light-water reactors.

“The NRC is proposing a rule that will transform the way the agency reviews new reactor applications, while continuing to fulfill our mission to assure the safety of the public,” said NRC Chair Christopher Hanson.

“This proposed rule leverages significantly more risk insights than our existing regulatory framework in making safety determinations. Applicants can use our existing regulations today, but this proposed rule will provide future nuclear developers a clear, additional pathway for licensing.”

The proposed rule, to be published in the Federal Register in about six months, will create a new Part 53 section under the NRC’s regulations (10 Code of Federal Regulations) as an alternative to the existing, large light water reactor licensing approaches under Parts 50 and 52.

The rule, in meeting the requirements of the Nuclear Energy Innovation and Modernization Act, will give plant designers and plant operators flexibility in determining how their nuclear power plant will meet safety criteria. The law was passed by Congress in 2019.

The legislation directs the NRC to develop a licensing process for advanced nuclear reactors within two years and to complete a “technology-inclusive licensing framework” for optional use by advanced reactor designers by 2027. This move is vital since dozens of companies and research institutions are developing advanced reactor designs, including molten salt reactors, liquid-metal-cooled reactors and high-temperature gas reactors.

The rule sets out criteria in areas including reactor siting requirements; analyzing potential accidents; defining safety functions; categorizing structures, systems, and components; addressing construction and manufacturing requirements; providing defense in depth; and protecting the public and plant workers during normal operations.

NucNet reported that in a staff requirements memorandum (SRM) (ML24064A039) made public on March 4th, the Commission directed staff to incorporate several changes to a March 2023 draft proposal within six months of the SRM’s issuance. The Commission also sent the staff back to the drawing board on several issues saying more work is needed  on them.

In a detailed assessment of the commission’s action published March 4th, analysts at the Breakthrough Institute, which wrote a critical review of the earlier NRC draft of Part 53, wrote, “There is still a lot of work to do to form the NRC staff’s draft and the Commission’s direction into a viable rule. While the SRM provides a lot of information on the Commission’s decision, it will take some time to complete an in-depth review of the 1,300+ pages in the SRM package.”

The group added that the resulting new draft “will set [the NRC regulation] on a path to be a modern performance-based pathway for licensing new reactors.”

A final version of the proposed rule is expected by September 2024. A final rule should be issued within 12 to 18 months after the proposal’s publication, taking into account a public comment period.

Part 53 is meant to offer a “voluntary” alternative to advanced nuclear applicants under a framework that would be technology-inclusive, meaning it is applicable to all reactor technologies. The framework would also be risk-informed, which means using information from risk assessments to focus safety analyses on important issues, and performance-based to ensure plants are regulated based on how they perform and not just how they are designed.

The proposed rule also modifies agency regulations for operator licensing, employee fitness-for-duty, physical security and site access authorization.

The staff’s effort to craft the proposed rule began in 2020. The staff conducted extensive public engagement with 21 rounds of public review and comment on preliminary rule language. The staff held 24 public meetings with stakeholders as well as 16 public meetings with NRC’s independent advisory group, the Advisory Committee on Reactor Safeguards. The staff will seek feedback from the public when it issues the proposed rule and draft guidance later this year.

& & &

Amazon Acquires Talen’s Nuclear Powered Data Center

(DataCenterDynamics) Amazon Web Services (AWS) has acquired Talen Energy’s data center campus which is located adjacent to a nuclear power station in Pennsylvania. As part of the March 4th deal, Talen will supply AWS with electric power via a 10-year Power Purchase Agreement (PPA) from the Susquehanna reactor site.

Talen announced it has sold its 960MW Cumulus data center campus for $650 million to a ‘major cloud service provider’ which Talen identified as Amazon. S&P Global Market Intelligence reported additional financial details of the acquisition.

The company broke ground for the data center in 2021 and completed the first 48MW, 300,000 square foot hyperscale facility early last year. The 1,200-acre data center campus gets its power from the Susquehanna Steam Electric Station (SSES).

Hyperscale data centers are massive business-critical facilities designed to efficiently support robust, scalable applications and are often associated with big data-producing companies such as Google, Amazon, Facebook, IBM, and Microsoft among others.

What further distinguishes hyperscale data centers is the volume of data, compute, and storage services they process. In a survey, 93% of hyperscale companies expect to have 40 GigaBytes per second (Gbps) or faster network connections. In the same survey, 51% of respondents report that the bandwidth needed to manage vast volumes of data is an increasing challenge.

Talen said AWS aims to develop a 960MW data center campus. The cloud company has minimum contractual power commitments that ramp up in 120MW increments over several years. The cloud provider also has two 10-year extension options, tied to nuclear license renewals

Commissioned in 1983 for energy company PPL, the 2,494MW Susquehanna Steam Electric Station is one of the largest nuclear power plants in the US. Its current owner, Talen Energy, was founded in 2015 after the competitive power generation business of PPL Corporation was spun off and combined with competitive generation businesses owned by private equity firm Riverstone Holdings.

Riverstone Holdings LLC is an asset management firm that invests in the private markets primarily within energy, power and infrastructure. Since inception, it has raised over $40 billion of capital to invest.

Talen Energy formed Cumulus Growth in 2020 to “invest in opportunities created by the convergence of digital infrastructure and power” and had two separate businesses; Cumulus Data, focused on hyperscale data centers; and Cumulus Coin, focused on digital currency mining. The crypto facility, also located at the Pennsylvania site, is not involved in the sale to Amazon.

& & &

Fuel loading Begins at Indian Fast Breeder Reactor

(WNN) On March 4th Indian Prime Minister Narendra Modi witnessed the start of fuel loading at the 500 MWe Prototype Fast Breeder Reactor at Kalpakkam in Tamil Nadu. Fast breeder reactors form the second stage of India’s three-stage nuclear program. (Detailed Technical Image in Research Gate)

The Prototype Fast Breeder Reactor (PFBR) has been developed by BHAVINI (Bharatiya Nabhikiya Vidyut Nigam Limited), a government enterprise under the Department of Atomic Energy (DAE) which was set up in 2003 to focus on fast breeder reactors. Construction of the PFBR began in 2004, with an original expected completion date of 2010.

India has adopted a three-stage nuclear power program, with the long-term goal of deploying a thorium-based closed nuclear fuel cycle. The first stage involves the use of pressurized heavy water reactors (PHWRs), fuelled by natural uranium, and light water reactors. The second stage involves reprocessing used fuel from the first stage to recover the plutonium to fuel FBRs. In stage 3, Advanced Heavy Water Reactors (AHWRs) will burn thorium-plutonium fuels and breed fissile uranium-233.

The PFBR will initially use a core of uranium-plutonium mixed oxide (MOX) fuel, surrounded by a uranium-238 ‘blanket’, with plans to use a blanket of uranium and thorium to “breed” plutonium and U-233 for use as driver fuels for AHWRs.

The DAE describes the PFBR as an “advanced third generation reactor with inherent passive safety features” which, since it recycles material recovered from used fuel from the first stage of the program, “offers great advantage in terms of significant reduction in nuclear waste generated, thereby avoiding the need for large geological disposal facilities.”

Reports in India have said the original estimated cost of the project was about $420 million. The actual cost has sicne been “being revised” to about $820 million according to Indian press reports.

In January, Modi formally dedicated the Demonstration Fast Reactor Fuel Reprocessing Plant at the Indira Gandhi Centre for Atomic Research (ICGAR) in Kalpakkam, a precursor to large-scale plants for the reprocessing of fast reactor fuel, and in February, he visited the Kakrapar plant in Gujarat for the dedication of the first two Indian-designed and built 700 MWe PHWRs. The second of those units – Kakrapar 4 – was connected to the grid just days later.

& & &

Great British Nuclear Buys Wylfa and Oldbury sites

The UK Government has announced that Great British Nuclear (GBN) will buy the Wylfa and Oldbury sites for new nuclear projects in a £160m deal with current owners Hitachi. The announcements, made in the Chancellor’s budget, also includes the launch of the next phase of GBN’s Small Modular Reactor technology selection process.

The Horizon Project was to develop two UK 1350 MW Advanced Boiling Water Reactor (ABWRs) at Wylfa Newydd to expand Hitachi’s nuclear business in the UK. The firm pulled out in January 2019. At the time it said, the project lacked “economic rationality as a private company” because it was clear that further time was needed to decide on a financing structure for the project, and the conditions for building and operating the nuclear power plants.”

At one time the UK government offered to take a significant equity stake in the project. However, Hitachi was reportedly spooked by the government’s insistence on a fixed price contract without compensation for cost increases and schedule delays. The cancellation of the project punched a 2,700 MW hole in the government’s then 19GW plan for new nuclear power plants.

SMR Technology Selection Process 

GBN is launching the next phase of Great British Nuclear’s Small Modular Reactor technology selection process. The six eligible companies will now be able to access tender documentation, allowing them to bid for potentially multi-billion-pound technology development contracts.

Eligible bidders will have until June 2024 to submit their proposals. Successful bidders’ technologies will be allocated sites and incorporated into projects, and bidders will receive funding to develop their technology. The government promised to make the contract awards before the end of 2024. Successful bidders’ technologies will be allocated sites and incorporated into projects, and bidders will receive funding to develop their technology.

As announced in October 2023, the companies invited to tender are: EDF Energy, GE-Hitachi Nuclear Energy International LLC, Holtec Britain Limited, NuScale Power, Rolls-Royce SMR and Westinghouse Electric Company UK Limited. Rolls-Royce has been particularly vocal about delays in the SMR program promoting itself as the “home town team” for the contract awards. Holtec recently announced a teaming arrangement with South Korea’s Hyundai to pursue the contract.

# # #