Welcome to our Friday mailbag edition!
Every week, we receive some great questions from your fellow readers. And every Friday, I answer as many as I can.
This week, the conversation turns to a popular Inside Wall Street topic – the nuclear energy revival I’ve been writing about…
SMRs seem to be slow to develop. Is there any sign of accelerating development on the horizon?
– Bradley M.
Hi Bradley, thank you for that question. I have written quite a lot about SMRs (catch up on some of the latest here and here).
I agree they have been slow to develop. But there is acceleration and global competition in that space.
First, let me give readers a quick review of what SMRs are.
SMR stands for small modular reactor. SMRs are nuclear reactors designed to be scalable, flexible, moveable, and capable of producing electricity safely and reliably.
Unlike traditional large nuclear reactors, they can be mass-produced in factories. They can then be moved to various sites. This makes them cost-effective and energy efficient.
Yes, SMR development has faced some headwinds. These include regulatory barriers and initial costs of getting SMR factories up and running. I’ve written about this, too (catch up here).
That said, more than 80 SMRs are being developed globally. The countries manufacturing them span Argentina, Russia, China, the U.K., and the U.S. So, the momentum is rising and spreading.
In addition, new types of SMR construction capabilities are popping up. Take the Nuclear Innovation Programme in the United Kingdom, for instance. It backed a company called Sheffield Forgemasters to develop a new, quick SMR assembly processing technique.
The technique is called Local Electron-Beam Welding (LEBW). It took less than 24 hours to construct four large nuclear-grade welds using LEBW. Normally, it would take an entire year.
For now, Sheffield Forgemasters is the only U.K. company using LEBW technology to build SMR components rapidly. But the more this sort of constructing technology advances, the faster SMRs will be built.
That could be a game changer for SMR development.
Plus, last summer, China assembled the core module of the world’s first commercial SMR. It’s called Linglong One. That step confirmed China is in the SMR construction race.
And there’s one piece of key U.S. legislation I’ve been telling you about for over a year that is key to this development. It’s called the ADVANCE Act.
It was inserted into the 2024 national defense bill, which passed last December.
Congress pulled it in the final moments due to a procedural conflict. But it remains on the docket for passage this year, along with another large nuclear bill. That large nuclear bill is called the Atomic Energy Advancement Act.
So, yes, SMR development may have taken a while to get started, and it might take years before they are widely used.
But with so many nations focused on it, SMRs will eventually become the go-to nuclear energy power source around the world.
What I haven’t heard in the new flurry of small reactor nuclear power is the issue that dogs large reactor nuclear power: dealing with the lethal waste.
Spent uranium doesn’t go away. And has been a cost largely dumped on taxpayers. Is there some breakthrough I haven’t heard about? And where is all this highly geographically distributed nuclear waste going to go?
– Keith S.
Hi Keith, thank you for your question regarding nuclear waste.
Nuclear waste, or spent uranium, is highly radioactive material that is generated through the production and use of nuclear energy.
It is a critical area of concern surrounding the use of nuclear energy from the standpoint of safety and cost.
I wish I could say that every country has a 100% surefire way to dispose of it. But that’s not the case. The good news is there are technological developments addressing this problem.
One method entails resurrecting and updating reactor technology first developed by the U.S. in the 1960s.
China and Russia are leading this global charge of using so-called molten salt reactors (MSRs) and liquid fluoride thorium reactors (LFTRs). The Netherlands is working on its version of MSRs.
These reactors are designed to consume and re-use nuclear waste as part of their fuel cycle through a complex chemical process. Think of it as similar to turning compost into fertilizer and thus repurposing waste into the farming cycle.
MSRs and LFTRs have two main advantages when it comes to waste.
First, they reduce the amount of radioactive waste that requires disposal. Second, they extend the lifespan of nuclear waste storage facilities. That’s because they then don’t have to store as much waste.
In addition, the U.S. has invested $40 million in developing techniques to reduce waste at the start of the fuel production process. The code name for this project is ARPA-E (Advanced Research Projects Agency-Energy).
Another emerging solution for nuclear waste is storing it in deep underground geological formations, such as caves or tunnels.
This entails burying the waste in a repository where it can stay isolated for hundreds, or even thousands of years, or until radioactivity is gone.
These repositories would be located in safe, stable geological formations, such as salt domes or crystalline rocks.
Finland has made the most progress on this technique. It has built five repository tunnels so far in conjunction with its nuclear energy production.
Another technique is vitrification. This process involves mixing nuclear waste with molten glass to form solid glass. The glass is then solidified into a ceramic form, which makes it stable enough for long-term storage.
The U.S. Department of Energy uses this technique to treat spent nuclear waste. But it is still grappling with building adequate long-term repositories to store this form of safer waste.
So, the other piece of good news is that the Advanced Reactor Fee Reduction Act was included in the bi-partisan Atomic Energy Advancement Act. That act passed in the House on February 28, and it’s making its way to the Senate.
That act requires that new nuclear technology focus on reducing nuclear waste. I’ve written recently on the Atomic Energy Advancement Act. Based on what I’m hearing from my D.C. contacts, I believe it could become law this year.
I hope that all helps give you more clarity on the ongoing developments in the nuclear energy space.
And that’s all for this week’s mailbag edition! Thanks to everyone who wrote in.
If I didn’t get to your letter this week, please write me at [email protected]. I can’t give personal investment advice, but I’ll address common questions and comments in future mailbag editions.
Happy investing… and have a fantastic weekend!
Regards,
 |
Nomi Prins
Editor, Inside Wall Street with Nomi Prins