Thanks for the clarifications Johannes, I think I agree with you on most points then. And you have changed my mind especially in one area and that is whether either a nuclear or alternatively a renewables strategy is best to pursue for a country/region before they embark on an energy transition. I think this question is still super relevant as most future emissions reductions/avoidance will have to come from Asia and Africa where renewables are still not widely deployed (this makes me question Western “development” organizations pushing hard for renewables without being clear about this as a somewhat risky bet). These countries actually today have a choice between liberalising and letting solar and wind rip, or, on the other hand, being a bit more heavy handed and using state control to push for a nuclear strategy. Bangladesh is just building its first nuclear plant and I used to think that was a bad strategy, but perhaps not (Although I fear that decision was made less based on a genuine and well thought through long term plan and more based on political pressures, I am initially sceptical of Rusatom that runs the project). I guess I had taken for granted a liberal electricity market and hence I felt that the nuclear path was really suboptimal as LCoE would matter. But if one can assume an ability to exercise strong state control, this changes my mind.
I think your point on system level costs is super relevant. In fact, I have been frustrated by the focus on LCoE in wind energy, as if you are building close to other wind farms, LCoE does not really matter that much as the market price (not taken into account in LCoE) will be low whenever your wind farm is producing. What matters is the revenue you capture, which can be high by producing small amounts at high prices (high LCoE). I think I even saw a study that cost optimized the Swedish grid for either a ~40% nuclear or ~90% renewable grid and the 2 systems cost came out pretty much the same. But we know for a fact we can get to a grid that is ~100% nuclear. But we have never before made a grid with close to 100% renewables (some people point to Denmark, but it is far from a good example being super connected to hydro in the north and lots of other generation/demand in the south). So they might have the same cost, but the renewable option is more risky. This is something you have changed my mind on. I hope this to some degree captures (perhaps with a lot of engineering simplification!) your argument about long time scales and total system cost.
I think perhaps our remaining disagreement is around the modularity and potential learning curve of SMRs. But I think our disagreement here is a matter of degree, not kind. I think we both think there is a chance that SMRs could come significantly down in cost with more deployment. I think perhaps you feel more optimistic about this than me but maybe not by much. And in any case I am not sure it matters that much as I think we both agree that the bet (or hedge as I like to think of it) is worth making, especially given that a lot of the world is taking the more risky path of widespread renewables instead of pursuing the nuclear option and we must be humble about the challenges we could face when renewables start dominating the grid. Perhaps I am also a little less worried (but still worried enough to support SMRs!) about the challenges of renewables. Especially industrial electrification makes me optimistic. An example of my optimism is that here in Sweden they are thinking about making steel from electricity and they are planning on large thermal reservoirs with hours (if not days) of thermal storage in order to quickly ramp electricty consumption up and down (I think GW scale!) based on electricity prices and requirements for frequency response.
Thanks for the good exchange—that all makes sense.
I am unsure whether we disagree on learning rates for SMRs, we are just in the process of building a comparative tool to clarify our expectations of the returns of different innovation advocacy bets and, IIRC, SMRs sit in the middle range there based on stuff like Mahotra and Schmidt (2020?, from memory) on design complexity and customization and how this shapes expectable learning rates.
We’ll publish this later in the fall and then we’ll see whether we disagree:).
Your detailed work is likely to make me update so let’s see. And you probably do this already but it seems intuitively worth looking at learning rates per unit produced, and not only MW. Solar panels might be 2000 units per MW, wind turbines 0.2 and SMRs 0.003 units per MW. Just feels like solar panels have a massive advantage here in terms of learning.
Thanks for the clarifications Johannes, I think I agree with you on most points then. And you have changed my mind especially in one area and that is whether either a nuclear or alternatively a renewables strategy is best to pursue for a country/region before they embark on an energy transition. I think this question is still super relevant as most future emissions reductions/avoidance will have to come from Asia and Africa where renewables are still not widely deployed (this makes me question Western “development” organizations pushing hard for renewables without being clear about this as a somewhat risky bet). These countries actually today have a choice between liberalising and letting solar and wind rip, or, on the other hand, being a bit more heavy handed and using state control to push for a nuclear strategy. Bangladesh is just building its first nuclear plant and I used to think that was a bad strategy, but perhaps not (Although I fear that decision was made less based on a genuine and well thought through long term plan and more based on political pressures, I am initially sceptical of Rusatom that runs the project). I guess I had taken for granted a liberal electricity market and hence I felt that the nuclear path was really suboptimal as LCoE would matter. But if one can assume an ability to exercise strong state control, this changes my mind.
I think your point on system level costs is super relevant. In fact, I have been frustrated by the focus on LCoE in wind energy, as if you are building close to other wind farms, LCoE does not really matter that much as the market price (not taken into account in LCoE) will be low whenever your wind farm is producing. What matters is the revenue you capture, which can be high by producing small amounts at high prices (high LCoE). I think I even saw a study that cost optimized the Swedish grid for either a ~40% nuclear or ~90% renewable grid and the 2 systems cost came out pretty much the same. But we know for a fact we can get to a grid that is ~100% nuclear. But we have never before made a grid with close to 100% renewables (some people point to Denmark, but it is far from a good example being super connected to hydro in the north and lots of other generation/demand in the south). So they might have the same cost, but the renewable option is more risky. This is something you have changed my mind on. I hope this to some degree captures (perhaps with a lot of engineering simplification!) your argument about long time scales and total system cost.
I think perhaps our remaining disagreement is around the modularity and potential learning curve of SMRs. But I think our disagreement here is a matter of degree, not kind. I think we both think there is a chance that SMRs could come significantly down in cost with more deployment. I think perhaps you feel more optimistic about this than me but maybe not by much. And in any case I am not sure it matters that much as I think we both agree that the bet (or hedge as I like to think of it) is worth making, especially given that a lot of the world is taking the more risky path of widespread renewables instead of pursuing the nuclear option and we must be humble about the challenges we could face when renewables start dominating the grid. Perhaps I am also a little less worried (but still worried enough to support SMRs!) about the challenges of renewables. Especially industrial electrification makes me optimistic. An example of my optimism is that here in Sweden they are thinking about making steel from electricity and they are planning on large thermal reservoirs with hours (if not days) of thermal storage in order to quickly ramp electricty consumption up and down (I think GW scale!) based on electricity prices and requirements for frequency response.
Hi Ulrik,
Thanks for the good exchange—that all makes sense.
I am unsure whether we disagree on learning rates for SMRs, we are just in the process of building a comparative tool to clarify our expectations of the returns of different innovation advocacy bets and, IIRC, SMRs sit in the middle range there based on stuff like Mahotra and Schmidt (2020?, from memory) on design complexity and customization and how this shapes expectable learning rates.
We’ll publish this later in the fall and then we’ll see whether we disagree:).
Your detailed work is likely to make me update so let’s see. And you probably do this already but it seems intuitively worth looking at learning rates per unit produced, and not only MW. Solar panels might be 2000 units per MW, wind turbines 0.2 and SMRs 0.003 units per MW. Just feels like solar panels have a massive advantage here in terms of learning.