Gap In Net Zero Carbon Goal – Feasibility Of The Nuclear Option?

July 2023 has just been confirmed to be the hottest month on record ever. All around the world, cities hit record hit temperatures we have never seen before. Authorities have to warn people working under the sun to take precautions to avoid heatstroke and hydrate regularly.

I had personally felt the intense heat during my recent trip to Japan where it reached 36 degrees Celsius just after noon time every day. Seville in Spain was 45 degrees and some parts of China tested above 53. Wild forest fires happened in Canada and destroyed a city in Hawaii just a few days ago.

Is Climate Change real now? Are we like a frog in a well that is being slowly boiled alive as the earth heats up? Climate deniers are pointing to the fact that scientists have been screaming about the doomsday scenario for so many years since the 1960s but it has not happened, that perhaps the earth is like a pendulum that can swing back and correct itself eventually.

But it is scary to see what has been happening over a short span of time, as record high temperatures are being recorded in back-to-back years. There was severe rain and flooding in some countries while other places experience sizzling hot summers at the same time. In July, there was a huge surge in electricity demand as more people rush to cool themselves (via air conditioning and fans) to escape the scorching heat outdoors. Commodities prices like oil and gas had been rising as a result.

Theoretically, it should be great news for renewable energy like Solar panels but a hotter sun does not equate to more energy produced. This renewable energy peaks at around 40 degrees Celsius and does not generate more after that. The current drought situation has also crippled hydroelectric production as there are lower water levels. As a result, there was news that the many hydroelectric dams in Vietnam could not sustain electricity production.

This brings us to this week’s topic of the world’s goal to achieve net zero carbon emissions in the future. Net zero carbon refers to achieving an overall balance between the amount of carbon emissions produced and the amount of carbon removed or offset from the atmosphere. It aims to reduce the net greenhouse gas emissions to zero, usually by reducing emissions through various measures and compensating any remaining ones through carbon offsetting or carbon capture technologies.

The current sources of renewable energy like solar, wind and hydro are now being seriously challenged by Climate Change conditions. They may not be able to help the world achieve its zero carbon goal in the near future. How can we close the gap?

There are increasing global discussions that more renewable sources of energy should be explored. And that is pointing to an option that is becoming more obvious. The answer is to have greater use of the Nuclear option to help close the net zero gap.

Nuclear is considered one of the cleanest energies available. Its power plants also operate at a much higher capacity factor than other renewable energy sources or fossil fuels. Capacity factor is a measure of what percentage of the time a power plant actually produces energy. It’s a problem for all intermittent energy sources. The sun doesn’t always shine, nor the wind always blows, nor does water always fall through the turbines of a dam.

In the United States in 2016, nuclear power plants, which generated almost 20% of U.S. electricity, had an average capacity factor of 92.3%, meaning they operated at full power on 336 out of 365 days per year (the other 29 days they were taken off the grid for maintenance.) In contrast, U.S. hydroelectric systems delivered power 38.2% of the time (138 days per year), wind turbines 34.5% of the time (127 days per year) and solar electricity arrays only 25.1% of the time (92 days per year). Even plants powered with coal or natural gas only generate electricity about half the time. Nuclear is a clear winner on reliability.

Nuclear power also releases less radiation into the environment than any other major energy source. This statement will seem paradoxical since it’s not commonly known that non-nuclear energy sources release any radiation into the environment. The worst offender is coal, a mineral of the earth’s crust that contains a substantial volume of the radioactive elements uranium and thorium. Burning coal gasifies its organic materials, concentrating its mineral components into the remaining waste. So much coal is burned in the world and so much fly ash is produced that coal is actually the major source of radioactive releases into the environment. 

Traditionally, Nuclear has been given a bad name because of the big headlined events of failures which spooked everyone for years. There was the partial meltdown of the Three-Mile Island reactor in 1979, and the Chernobyl incident in 1986. And in recent times, the 2011 Fukushima accident because of a tsunami. While these accidents are few and far between, the public perception has been burned into our minds that Nuclear is dangerous and bad for the world. This misconception remains even though there are better and safety nuclear developments, which are less known and publicized to the public.

https://changeoracle.com/2022/07/20/nuclear-power-versus-renewable-energy/

There is also the worry that the nuclear plant’s byproducts can be used as weapons of mass destruction. Enriched Uranium can be used to make bombs. There is an ongoing debate that perhaps this concern can be eased with the use of Thorium instead of Uranium. It is supposedly to be as effective for electricity production but yet very hard to be made into a usable bomb.

The traditional high cost of building nuclear reactors was also a turn-off as it takes many years to come to production. But a new generation of plants, called Small Modular Reactors (SMRs), is now being touted as a way to break out of the high economic cycle cost that has plagued the industry for years.

SMRs are advanced nuclear reactors that have a power capacity of up to 300 MW per unit, which is about one-third of the generative capacity of traditional ones. They also can produce a larger amount of low-carbon electricity. With reduced fuel requirements, they may require less frequent refuelling of between 3 to 7 years. Some are even designed to operate for up to 30 years without refuelling.

Singapore is starting to realize that nuclear power plants could be needed to achieve its net zero carbon goal by 2050. There have been recent nuclear option articles being released to test the public reaction as well as to measure any adverse reactions from neighbouring countries. It may be inevitable that the tiny red dot incorporates Nuclear into its arsenal of renewable energy sources to achieve its zero carbon goals.

I have a personal interest in renewable energy. My recent consultancy work involves the application of a Funds Management Company (FMC) linked to solar energy to attract investors who want to participate in the ESG space. The funds will be utilized to invest in PPA (Power Purchase Agreements) by providing CAPEX to commercial building owners to build solar panels.

The carbon credits (REU – Renewable Energy Units) will be harvested and owned by the fund to be monetised. A trading platform using Blockchain is also being developed to track these credits and provide deeper market liquidity to this developing sector. Transparent tracking will also help to solve greenwashing problems that currently plague this market.

My interest in nuclear has also made me focus on potential stocks to invest in this sector that may have capital gains in the years to come. Energy Fuels Inc (UUUU) looks interesting as it is a firm that is often mentioned by analysts in the nuclear industry. It is a mining development that specializes in this field. It will be my medium-term punt into this space.