Wednesday 5 September 2018
|Arrival and security check|
Registration and light refreshments
Tim Yeo, Chairman, New Nuclear Watch Institute (NNWI)
|17.00||The future of the nuclear energy industry in meeting the 2015 Paris climate goals
|17.40||Question and Answer Session|
Kirsty Speaking Notes
I read a magazine article earlier today, which asked the question: Would you personally abandon a 26-year diet where your weight doubled while you were on the diet?
The World is supposed to be on a zero carbon diet after making our first climate agreement in 1992. Since 1992, CO2 emissions almost doubled.
The agreements and the environmental plans have failed
* economic growth and wealth is still connected to the amount of energy people use, or the energy required to make the things they buy and use.
So wealth and prosperity is tied to energy use and energy is still almost completely tied to fossil fuels.
Meanwhile, World GDP is projected to double by around 2040.
So, to manage climate change, we need to reduce carbon dioxide emissions from the global energy system to near zero by mid-century.
Meanwhile, global energy demand might double from current levels.
All credible studies have concluded that to have a serious chance of success, we will likely need all the low-carbon solutions we have available to us and, given the scale and urgency, should be pursuing the fastest, most cost effective most feasible pathways to decarbonise.
For that reason, I want the nuclear industry to be successful. Nuclear technology is uniquely scalable, large scale, the fastest proven route to decarbonise a modern economy, and yet has a tiny environmental footprint.
The climate doesn’t care where the energy comes from. The only metric that matters when it comes to climate is carbon dioxide in the atmosphere – and therefore the carbon intensity of energy.
Our NGO – Energy for Humanity – published a Climate Leadership report at COP 23, the climate talks in 2017, showing that those countries in Europe who are climate leaders have the lowest carbon intensity. They achieved this largely through a combination of nuclear and hydro. The U.K. has achieved the largest overall reduction in carbon emissions thanks to a combination of nuclear, renewables and gas to replace coal. We’re on the right path and Germany proves that it is not possible to exit coal and nuclear at the same time. It’s not nuclear vs renewables it’s nuclear vs coal.
However, some have questioned whether nuclear energy can, or should, play a meaningful role in decarbonizing the global energy system.
As Bill and Tim have highlighted, a major barrier is cost.
Costs of recent US and European projects have been high and progress slow.
Nuclear new build in these countries looks expensive and slow. So: Are the finance and timing risks too high? Do we have to wait for advanced technologies? Or is there a way to deploy today’s nuclear technology rapidly and affordably to help us address climate change in time, even as we develop complementary nuclear technologies?
We set out to investigate this question.
So we know that nuclear projects around the world are being built today at a 50 to 80 percent lower capital cost than current and recent projects in the United States and Europe
At this cost level, nuclear is highly competitive with both fossil-fueled sources of electricity as well as many renewable sources
These huge cost disparities raise the question why? What accounts for the high costs of some of the recent plants, and what can be done to reduce them? What are the low-cost projects doing differently? Is labor so much cheaper in some places? Are some countries constructing nuclear power with poor quality standards and lax regulation to cut costs, perhaps resulting in less safe nuclear power plants?
The Energy Technologies Institute (ETI), a public-private research partnership, recently commissioned my firm, CleanTech Catalyst together with Cambridge-MA based Lucid Strategy to answer these questions, and establish whether such low-cost performance is transferable into the US/EU context.
This results, as Tim mentioned, has provided a roadmap for all of the key actors involved in the delivery of nuclear plants in the UK and has become the foundation of the UK government’s nuclear new build policy, including being featured in the U.K. nuclear sector deal which sets targets for 30% cost reduction in nuclear new build by 2030.
The Study found that the gap between most and least expensive nuclear project costs is due principally to best in class industrial practice, labor productivity and a strategy to build the same design repeatedly, while maximizing learning between units. We found that cost reductions had very little to do with lower labor rates, build quality or rigor of safety regulation.
An important finding is that these best practices are not country-specific. They can be transferred globally and improved on to further reduce cost and build times.
A historical example of this includes how the Toyota Manufacturing System challenged US car manufacturers in the early 1990s. Toyota produced high quality vehicles at much lower costs. Instead of going bankrupt, US companies implemented key parts of Toyota’s approach, both saving their industry and providing the basis by which foreign competitors would later build US factories.
By building confidence that quantified cost reduction is achievable in a high cost country like the UK, the ETI Study is galvanizing the UK government and the UK nuclear industry around an unprecedented and concerted effort on cost reduction and performance improvement.
It’s important to say that successful low cost programmes did not start out cheap. They became cheap with an intentional, and concerted effort to drive down costs and drive up performance.
We’ve done it before in Europe and the United States and by learning from the example set today by colleagues in China, Korea, Russia and Japan. We can do it again.
Thank you for your attention.