We’re going to need a lot more electricity from somewhere, and the nuclear option is looking increasingly credible.
Recent announcements
Three recent items in the press caught my eye:
- On September 20, 2024, Constellation Energy announced a 20-year deal to sell 835 MW of nuclear powered electricity to Microsoft from a restored plant at Three Mile Island, Pennsylvania, which was prematurely retired in 2019.
- Then, on October 14, Google announced it was signing an agreement with US-based Kairos Power to purchase up to 500 MW of electricity from multiple small modular reactors (SMR) starting as early as 2030.
- Two days later, Amazon announced it had signed an agreement with Energy Northwest to fund the initial feasibility phase of an SMR project in Richland, Washington, with rights to buy up to 320 MW of electricity, and an agreement with Dominion Energy to explore development of an SMR project in the Virginia region.
All three announcements relate to nuclear energy, but they have more in common than that. These are all companies whose future relies on access to large amounts of clean electricity, placing their own bets on nuclear energy being an integral part of the solution.
We appear to be at the intersection of two big trends: a sudden increase in demand for electricity that is outstripping utilities’ ability to meet their customers’ needs, and a series of advances in nuclear generation technologies.
Is it time for BC to reconsider its aversion to nuclear power?
Accelerating demand
After plateauing for several decades, demand for electricity in North America has recently started to accelerate. The Western Electricity Coordinating Council (WECC), the organization charged with ensuring electricity reliability throughout the western US along with Alberta, BC and northern Baja Mexico, last November forecast a 16.8 percent increase in the next ten years. This is almost double the 9.6 percent growth anticipated only one year previously.
The Pacific Northwest Utilities Conference Committee (PNUCC) 2024 forecast for the northwest region of the US demonstrates this even more clearly. PNUCC anticipates growth in electricity demand of 30 percent by 2034, a rate not seen since the early 1980s; its 2023 forecast was only for 24 percent growth in ten years.
There are several reasons for the sudden acceleration in demand growth, including manufacturing moving back to the US and electrification to reduce greenhouse gas emissions. But one of the biggest drivers is the growth of data centres, particularly for artificial intelligence (AI) processing. A recent paper from Goldman Sachs estimates that data centre power demand will rise 160 percent by 2030.
All this additional demand is happening faster than utilities can increase their generation and transmission capacity. WECC went so far as to say that based on current plans, the region “is not prepared to meet future demand over the next 10 years.”
Nuclear renaissance?
The use of nuclear power for electricity generation grew quickly during the 1970s and 1980s, but then plateaued. According to Stats Canada, generation in Canada between 2005 and 2021 was essentially unchanged at around 87 million MWh. According to the US Energy Information Administration, nuclear capacity in the US is virtually unchanged since 1985.
Recently though, there has been renewed interest in nuclear energy as a source of clean electricity, and some useful technological advances.
Small modular reactors attempt to reduce the cost of construction by using a standardized design that can be pre-built in a factory and shipped to its site for assembly. Being smaller, they can be placed near each place electricity is needed, requiring fewer transmission upgrades. The smallest, sometimes known as micro modular reactors, can even be small enough for a single manufacturing site.
So far, SMRs have only been successfully built in China and Russia. However, development work is underway in the US and elsewhere. For example, NuScale Power has a 50 MW design certified by the US Nuclear Regulatory Commission, and in Sweden work is underway to evaluate an SMR-powered data centre park.
Another development is the use of molten salt instead of pressurized water to transfer heat from the reactor to its generators (ironically, an “old” technology from the 1960s). This should be safer (the reactor can’t melt down), more efficient (less energy is lost in transition), and generate less nuclear waste. It should also be cheaper and quicker to construct, as less steel and concrete is required as a result of lower reactor pressures. Construction of the first nuclear plant to employ molten salt, TerraPower’s Natrium plant in Wyoming, started in June.
The molten salt can also be used as a thermal battery, allowing the nuclear plant to ramp up and down its output more in line with demand, rather than producing only a constant level of generation, a limitation of today’s nuclear plants. In this way, Natrium’s output can vary from a steady 345 MW to a peak output of 500 MW.
Meanwhile in BC…
If the situation Microsoft, Google and Amazon find themselves in – rapidly increasing need for electricity, desire to reduce GHG emissions, and utilities unable to meet projected demand –sounds a bit familiar, it should. This is the situation we’re in here in BC, although perhaps for different reasons.
The provincial government is committed to reducing GHG emissions by 80 percent by 2050, and electrification is central to its strategy. Since BC’s GHG emissions haven’t budged since 2007 when the baseline was set, electrification is going to have to accelerate dramatically if we’re going to even get close to the 2050 target.
Making matters worse, the government would love to expand the province’s exports of liquified natural gas (LNG) – a good tax revenue earner and a source of construction jobs. But in order to export more LNG without adding to our GHG emissions, the government is requiring that new plants use electricity for refrigeration rather than natural gas.
As for the growth of data centre-based businesses in BC, this isn’t even a consideration at present. The government stepped in at the end of 2022 to prevent a number of cryptocurrency mining operations, a form of specialized data centres, from connecting to BC’s grid. It explained this was to “preserve British Columbia’s supply of clean electricity.” There’s no indication that this electricity is being preserved for any other data centre applications, such as AI.
BC Hydro, by far the largest electricity utility in BC, is short of electricity. It appears to have found willing independent providers to meet its short-term needs from intermittent sources such as wind and solar, but its most recent long-term resource plan does not include any sources of large amounts of reliable, clean electricity.
The BC response so far
It’s quite likely that we will need to at least double our electricity generation in BC within a couple of decades. This is not hyperbole – multiple studies, such as the recent Natural Resources Canada report, show that Canada will need to do that and more by 2050.
The government has correctly pointed out that intermittent sources of electricity such as wind and solar can be usefully added to BC Hydro’s integrated system because the reservoirs act as batteries when needed. However, this cannot be done indefinitely, as reservoirs are not limitless and water flows in rivers must be maintained.
In addition, BC Hydro’s trading subsidiary, Powerex, uses this storage when trading electricity with customers in the US – using this storage in BC to back up renewables might mean lower trading profits that currently subsidize bills for BC Hydro customers.
BC Hydro has no obvious sites left for any more large dams, and in any case, these would be very hard to build now, with today’s concerns over indigenous rights and use of limited agricultural land.
What should be done?
Microsoft, Google and Amazon depend on increasing amounts of electricity for their very survival as they compete in the growing AI market. Their recent investments suggest two things to me: we shouldn’t rely on current utility plans to deliver sufficient electricity growth; and if you want sources of clean reliable electricity, nuclear power is now a credible alternative.
I believe it’s time for BC to reconsider its aversion to the use of nuclear power. This is a relic of cold war thinking that does not reflect current public opinion. A recent survey suggests that 58 percent of people in BC support reviewing current restrictions on the use of nuclear power, versus 27 percent against. Views appear to have changed; environmentalists who used to be concerned about nuclear fallout are now more worried about climate change-related destruction.
Many environmentalists are apparently now warming to the idea of using nuclear power for electricity generation as an alternative to fossil fuels. One reason is that nuclear generation uses considerably less land than some of the other clean energy alternatives such as wind and solar farms and reservoirs for hydro-electric power. I believe this issue is underappreciated in BC today, and will become increasingly contentious as we start to build out our clean energy generation.
One positive step would be for the BC Utilities Commission (BCUC) to conduct a public inquiry, as it did for hydrogen and renewable natural gas. This would allow a public discussion of the merits of nuclear energy, and some evidence-based analysis of the costs and benefits. The BCUC hasn’t seemed very keen on inquiries recently, so I suspect this won’t happen.
Another alternative would be for BC Hydro to consider nuclear energy as one of its alternatives for new generation in its next long-term resource plan. In its review of the last one, the BCUC said it was “satisfied” with the utility’s incremental approach in the short term, but it expected future plans “would benefit from further consideration of the specifics of the resource options” – nuclear power should be one of those options.
I realize there is an objective in the Clean Energy Act of BC not to use nuclear power, but in my view this does not prevent either BC Hydro or the BCUC examining its merits. In any case, it’s only an objective, not a requirement.
Conclusion
Nuclear energy is not a panacea. Even its promoters today don’t envision it being more than one component of the generation mix. The new nuclear technologies are not yet fully proven, and their cost is uncertain.
In its favour, though, is that there’s serious money being invested in the US to develop new, more scalable nuclear generators. Bill Gates has been an investor in TerraPower since its inception, and the US Department of Energy is providing up to US$2 billion in funding for the Natrium plant. BC is too small to be the leader in such a field, but we can take advantage of the technology as it becomes commercially available.
Perhaps the provincial government could step up and take some leadership here. It might add some credibility to its electrification plans if it could demonstrate it was exploring new and creative ways of solving the current electricity shortage.