How to invest in SMR – the future of green energy
Sheepwash is a small village in North Devon with a population of around 250 people.
The Sheepwash Chronicle is the local magazine for and about residents. This is not what you might call mainstream media.
I have close family there so I visit quite often. Last week I came across an article in the Harvest 2021 edition. This is possibly the best article I have ever read on green energy and our future electricity needs.
I thought I would discuss it today.
Nuclear power is clean and safe, so why is it so hated?
It’s by Dr Philip Bratby of the Countryside Charity and it’s called: Small Modular Reactors – An Opinion Piece. The ultimate in low carbon renewable energy.
It’s worth stating up front that Bratby is pro-nuclear. It often seems that the energy debate is no longer about the cleanest and most efficient source of energy; the debate has been politicized and corrupted, often by those with their noses deep in government subsidies, so that anyone who suggests that fossil fuels have done a lot for humanity or that nuclear power may not be not so bad is immediately called a heretic.
But Bratby’s point of view seems particularly relevant right now given the current energy crisis we find ourselves in, soaring natural gas prices, and the fact that it is only recently, without wind, that the government had to relight the coal plants.
I Googled Bratby, and there isn’t much online. He holds an Honors BA in Physics from the Imperial College of Science and Technology (University of London), a PhD in Physics from the University of Sheffield, he has worked in the military and civilian nuclear industry in as an energy consultant and is now semi-retired. .
There are a few anti-nuclear websites that go after him, using straw man arguments, citing out of context, etc., so I won’t stoop to mentioning them here. We come to the article.
If the government is successful, Bratby says, we will need a lot more electricity for heating and to charge all those millions of electric vehicles. To meet these needs, the electricity supply will need to be both expanded and more reliable.
Commercial nuclear power plants have been in operation for almost 70 years. They have provided huge amounts of reliable and affordable “clean” electricity that is renewable almost endlessly. Nuclear power has the best safety record of all energy technologies. All environmental concerns, such as waste disposal, have been resolved.
So why has nuclear power not been widely accepted?
One of the reasons is that over many years environmental activists have persuaded much of the public, many politicians and the media that nuclear power is not safe. However, some activists have recently changed their minds.
For example, James Lovelock, who proposed the Gaia hypothesis, said that “nuclear power is the only green solution”. Bryony (now Baroness) Worthington, one of the leading authors of the climate change law, who once said she was “passionately opposed to nuclear power” said more recently of energy nuclear: “I urge you for moral, ethical, scientific and environmental reasons to rethink your opposition to this”.
Former anti-nuclear activist, environmental activist and author Mark Lynas, who said he “grew up hating nuclear power”, has now said that “continuing to oppose nuclear was a mistake … it is extraordinarily sure… and we have to learn to love Nuclear Power ”.
So why do some environmental organizations still oppose it and prefer environmentally destructive wind and solar farms coupled with batteries?
The reason, Bratby says, is not that it doesn’t produce abundant low-carbon energy, but that it does, and that defeats their purpose of stopping economic growth.
Now – and this is Dominic speaking – I think there is a lot of truth in that last statement. I often feel like this is the main agenda behind a lot (not all) of authoritarian activism. The agenda, as well as imposing their views on others and dictating their behavior, is to completely stop capitalism, progress and economic activity. Hence the hashtag #endcapitalism that can be found everywhere.
Anyway, back to Bratby: thanks to anti-nuclear propaganda, regulators are demanding multiple and excessive levels of safety in the design of nuclear power plants, unnecessarily increasing costs. The regulatory process is complex, slow and cumbersome, and therefore takes years.
The long delay between construction and operation adds to the expense. Political uncertainty is therefore one of the reasons many recent proposals for nuclear power plants in the UK have been scrapped, leaving the twin Hinkley C plants in Somerset as the only ongoing project.
The future of nuclear
To overcome some of these problems, the focus for future nuclear power plants has turned to SMRs – small modular reactors.
SMRs have been in service for over 60 years in submarines, aircraft carriers and icebreakers, but it is only in recent years that special attention has been paid to the development of SMR land for commercial power generation.
The advantages of SMR over current nuclear power plants are legion:
• They use relatively simple and proven technology.
• They can be factory built and built on site quickly.
• They are safer than current nuclear power plants.
• They occupy very little land and have little impact on the landscape. Some can even be built underground, which is certainly preferable to wind turbines and solar parks.
• They provide output that can be controlled to provide basic load capacity and load following.
• Their production is not dependent on weather conditions.
• They are synchronous and the large rotary generators provide inertia, which is a positive benefit for the reliability and stability of the network.
• They use very high energy density fuel and therefore require much less land. A 440 MW SMR would require around 25 acres of land and generate around 3.5 TWh of electricity per year (enough for around 1.2 million homes). A solar farm would require about 13,000 acres (20 square miles) for the same production; wind farms would need about 32,000 acres (50 square miles).
There are around half a million homes in Devon. Thus, Devon’s domestic electricity needs could easily be met by a single 440 MW SMR occupying a small area of land. In contrast, a large area of Devon’s farmland would need to be covered with solar panels or wind turbines to provide the same amount of electricity. Even then, alternative sources would be needed when the wind is not blowing or the sun is not shining.
I read that the largest solar farm in the country is planned at Holsworthy, about 15 miles from Sheepwash: 76,000 panels on 165 acres. It won’t come close to meeting Devon’s electricity needs.
In the UK, it is planned to build SMRs on redundant sites of closed nuclear and coal plants, i.e. on brownfields where grid connections are readily available.
If they are truly a silver bullet, SMRs are going to happen whether activists oppose them or not. An energy shortage will demand it. You don’t have to watch Extinction Rebellion videos blocking social media traffic to know the British public has lost patience.
How to invest in SMR
Several competing designs are under development around the world ranging from tens of megawatts to 500 MW and many different design concepts. But at the moment, none of the pure play SMR companies are publicly traded.
Rolls Royce (LSE: RR) has built seven generations of SMRs for use in nuclear submarines and, with its design for a 440MW SMR, it’s a competitor – so it’s an option. It’s about to land a load of orders from Eastern Europe, I hear, but it’s not exactly pure SMR play.
Another competitor is NuScale, an American company, which is unfortunately still private. However, there is a way to get exposure to NuScale. The majority shareholder is an engineering company Fluor Corp (NYSE: FLR). He’s been through wars a bit and his share price is low, so that could represent an opportunity – although, again, it’s not pure play.
Flight in the Light of Day – How Tax Shaped the Past and Will Change the Future iis now out in paperback at Amazon and all the good bookstores with the audiobook, read by Dominic, on Audible and elsewhere.