TCS Daily

Enter the Dragon: Nuclear Power's Newest Player

By Jeremy L. Shane - February 18, 2005 12:00 AM

Get ready for a new nuclear competition, a no-holds barred battle between two totally different views of nuclear power's future. Unlike past battles, this is not about whether we should build more nukes but rather what kind of nukes we will build. On one side are established nuclear plant builders in the West who think tomorrow's nuclear plants should work a lot like today's, just updated for the 21st century. On the other side is a loose affiliation of scientists spanning three continents who believe nuclear plants should work in a completely different way. Their design is called "pebble-bed modular reactor", or PBMR, after the billiard-ball shaped balls of nuclear fuel that provide its energy. Until recently, the incumbent powers were cruising to victory; the rebels could not even get a demonstration reactor built. Then China entered the fray committed to making PBMRs work. Now, the race is on.

The difference between incumbent nuke designs and PBMR is like night and day. Western reactors reflect the "bigger is better" mentality that prevailed when plants were first built. Industry mismanagement in the 1970's and 1980's added layers of safety systems to already complex designs. U.S. nuclear plants are run much better today than a decade ago, but next generation designs still feature tons of safety-oriented concrete and mazes of redundant valves, controls, and piping. PBMRs, by contrast, epitomize Internet Age principles of miniaturization and modularity. Each PBMR is about one-fifth the size of a conventional reactor. They are designed without many backup cooling systems in existing plants, relying instead on a reactor core that theoretically cools itself if nuclear fuel gets too hot. PBMR's smaller footprint and simplified design, it's hoped, will allow multiple reactors to be built on one site faster and cheaper.

But the challenge to incumbent nuclear companies does not end there. Most of today's nuclear industry profits come from making and replacing fuel in operating plants not building new ones. Western companies have a large stake in preserving how nuclear fuel is now made, a tightly controlled system run by quasi-government entities and nuclear service companies. The status quo works for everyone, consumers included, so long as existing reactor designs are the only viable options. PBMR commercialization would upset this arrangement. PBMR uses a totally different fuel design to current reactors. PBMRs should refuel while running whereas Western designs require refueling shutdowns every two years. So PBMRs do not need either Western-style fuel or Western companies' refueling services. Faced with this challenge, nuclear vendors -- with future plant sales and lucrative fuel and services businesses at stake -- have attacked PBMR as an idea whose time will never come.

Until recently, the incumbents were winning. Then China, facing a monumental power shortage, put its top scientific brains to work to commercialize PBMRs. China needs electricity, a lot of it and fast. Coal and oil-fired power plants can meet some of this gap but the only long-term option that can provide China with the amount of power it needs at stable costs and without worsening air pollution is nuclear. China will buy some Western-style nuclear plants but it will not go "all-Western" for important strategic and practical reasons.

Strategically, if China only buys Western-style nukes it will become dependent on the Western companies for nuclear fuel. This is an unacceptable political risk since Western politicians will be tempted to shut the nuclear fuel spigot every time China offends. By the same token, Western governments cannot afford to invite China into the nuclear fuel fabrication club given China's proliferation history.

Western reactor designs also pose practical issues for China. They require huge up-front capital investments, take years to build, and must be tailored to fit each plant site. This prevents large scale replication. Also, Western-style plants, being large, will introduce big chunks of power onto the power grid when they startup, stressing weak links and requiring the Chinese to beef up key power lines.

China needs a technology it can control, one that is less capital-intensive, can be deployed in step with growing power demand, and can be copied nationwide. PBMRs could solve each of these concerns. Being smaller, modular, and quicker to build, PBMRs could meet China's desire for a cheaper, scalable design that can be copied a hundred-fold. The technological barrier that has stopped PBMRs from becoming viable -- its use of a totally new fuel design -- is for China, a virtue. China wants a technology that gives it entre to the nuclear fuel business. Over time this would enable China to build an international market for PBMRs, financing domestic construction with overseas sales of PBMRs and lifetime fuel supply contracts.

In a time of simmering nuclear proliferation horrors the possibility of an unfettered Chinese nuclear export program is reason alone for concern. Still the U.S. government seems frozen at least publicly over the PBMR challenge. Perhaps officials are hoping, along with Western nuclear companies, that the Chinese fail and PBMR goes away. Great, except what if the Chinese succeed? The West is in a policy conundrum: it cannot provide what China needs (electricity and autonomy) and China cannot afford what the West will demand (dependency). So Western nuclear powers, led by the U.S., must come up with something better or else risk a Chinese PBMR program that ignores Western proliferation and safety concerns.

But is co-development feasible? What could the West hope to gain?

First, if China builds PBMRs, by definition, it will also build its own nuclear fuel capability. This is no small task. The hardest nut to crack with PBMRs is to fabricate thousands of identical fuel spheres each of which meets atomic-level tolerances. The Chinese also will need to build systems for PBMR reactors to eject used fuel spheres safely, and inject them, while the plant runs. Co-developing these systems with the Chinese should be a win-win: both will gain know-how and reduce the risk of an accident caused by poorly-designed or built fuel.

Joint U.S.-China development of PBMRs could address proliferation concerns. Western-style nuclear fuel is moved in large, tightly-controlled shipments. PBMR fuel spheres -- smaller and self-contained -- could be stolen or "lost" much easier. And while no one is advertising ways to extract and enrich material from PBMR fuel, sadly, where there's a will there's a way. Every PBMR fuel sphere should be implanted with a tracking device, an RFID chip or some other "Alias"-style wizardry, to ensure around-the-clock monitoring of every fuel sphere made. These safeguards are unlikely to be at the top of China's to-do list if they are left to go it alone, as its scientists face overwhelming pressure to get PBMR on-line at any cost.

A final reason to co-develop PBMR is the law of unintended consequences. China is developing PBMRs hoping they will meet future power needs. Western governments, on the other hand, assume current nuclear plants will be replaced by a new generation of similar designs. In fact, neither assumption may come true. PBMRs could take far longer to perfect than the Chinese hope leaving a yawning gap in their power supply. Meanwhile, opposition in the West and Japan to building more, large nukes would increase pressure on oil, coal, and gas supplies. U.S.-Sino relations and the western energy situation could deteriorate simultaneously.

This could happen even if China and the U.S. work together on PBMRs. However, if the U.S. helps China with PBMR, it will be much better positioned to help meet China's power shortages if the PBMR program suffers setbacks. If China believes PBMR ultimately will be viable, just delayed, it could be more receptive to buying Western-style nuclear plants without fearing permanent dependence on Western nuclear fuel. This outcome is preferable to letting China embark on a PBMR program alone only to face, if it fails, a new Sino-Russian-Iranian energy alliance or Chinese military moves to secure energy supplies -- or both.

The U.S., too, needs more nuclear options than just current designs. If the U.S. cannot build a nuclear waste disposal site after a decade of political warfare -- an issue pitting one state against forty-seven -- what chance does it have to build another generation of super-sized nuclear plants before existing plants retire? Working with China to figure out whether PBMRs are viable could give the U.S. another option to rejuvenate its energy portfolio. If land is a premium, electricity rate stability a must, and simpler safer plant designs a priority, commercial PBMRs could be just the ticket.

Jeremy L. Shane is CEO of company that develops software to manage power plants. Formerly, he was an energy trader and a policy aide in the U.S. Department of Justice.


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