Category: Base Metals

Akiko Fujita · Host

Sun, October 27, 2024 

Small modular reactors (SMRs) have long held the promise of cheaper, more efficient nuclear energy. Their smaller, standardized designs were expected to usher in a new era for an industry historically plagued by cost overruns and safety concerns.

But as major tech firms, including Google (GOOG) and Amazon (AMZN), turn to advanced technologies in hopes of powering their AI ambitions with a low carbon footprint, skeptics are raising questions about their viability, largely because no commercial SMR has been built in the US yet.

Despite the talk of a simplified process, there are only three SMRs operational worldwide — two in Russia and one in China.

“Nobody knows how long they’re going to take to build,” said David Schlissel, an analyst at the Institute for Energy Economics and Financial Analysis who has been critical of SMRs. “Nobody knows how expensive they’re going to be to build. We don’t know how effective they will be in addressing climate change because it may take them 10 to 15 years to build them.”

Nuclear power has received renewed interest because of the global push to move away from fossil fuels to reduce harmful emissions driving climate change. Although wind and solar power offer prevalent, low-cost energy options, nuclear remains an attractive clean alternative, in large part because it can run 24/7 in any season and has a smaller footprint.

SMRs have offered the most promise. Unlike traditional nuclear plants that have been costly and time-consuming, modular reactors are one-third the size, with a power capacity of 300 megawatts or less. The nuclear industry has touted their efficiency and cost savings, as SMRs are built in factories and assembled on-site.

“It reduces the risk associated with the project,” said Jacopo Buongiorno, a professor of nuclear engineering at MIT. “For an investor, … you may recover your investment quicker and with fewer uncertainties in terms of project execution.”

‘The technology is evolving’

Yet, in many ways, the hurdles facing this new generation of reactors have mirrored the old. Advanced reactor designs have taken longer than projected. Those delays have added to cost overruns.

Oregon-based NuScale (SMR) became the first company to get approval from the Nuclear Regulatory Commission to build SMRs in 2022, but the company canceled plans to deploy six reactors in Idaho last year. The announcement came after costs for the project, scheduled for completion in 2030, ballooned from $5 billion to $9 billion.

Buongiorno said the buildout has been complicated by the array of technologies tested within individual projects. While all SMRs utilize uranium as fuel, its form and application within reactors differ depending on the company and its technology. That’s dramatically different from existing nuclear power plants, which all use uranium dioxide, he said.

“The technology is evolving. We expect the performance of these reactors to be different. But the big question marks are … what’s going to be the reliability? How reliable this technology is going to be, given that we don’t have a lot of experience?” Buongiorno said. “Equally, if not more important, what’s going to be the cost?”

AI a ‘game changer’

X-energy CEO Clay Sell said demand has been part of the problem until now.

Artificial intelligence has changed that calculation, largely because of the energy needs associated with powering data centers that drive AI models, Sell said. Goldman Sachs estimates the advanced technology will contribute to a 160% increase in data center power demand by 2030.

Earlier this month, Amazon announced a $500 million investment in the development of SMRs, including funding for X-energy. That funding will help X-energy complete the design of its standard plant and construct the first facility that will manufacture the fuel used in those plants, Sell said, calling the investment a “game changer.”

“A significant portion of the increased electricity demand in the United States for the next 25 years is going to come from AI,” Sell said. “It could be as high as 10%, 20%.”

Kairos Power CEO Mike Laufer, who inked a purchase agreement deal with Google, said his company is still in the process of pursuing non-nuclear demonstrations of the technology. Any “cost certainty” would hinge on a successful demonstration and the company’s ability to manufacture in-house, he said.

“[Cost certainty] has been very elusive in this space,” he said.

There are other challenges beyond cost, including a lengthy regulatory approval process and what to do with all of the nuclear waste.

While nuclear companies maintaining a smaller footprint will mean less waste, a study by Stanford University found that SMRs would increase the volume of nuclear waste “by factors of 2 to 30.”

Schlissel argues that all of the money spent on small reactors should instead go to wind and solar power and battery storage, which are proven to reduce carbon emissions and cost less to produce.

Buongiorno countered that nuclear reactors have a longer shelf life. While the upfront costs may be higher, reactors have a lifespan of 60 to 100 years, he said. With the smaller footprint, SMRs can also be built closer to data centers, minimizing infrastructure costs, he added.

The Department of Energy says nuclear energy is critical to transitioning the country away from fossil fuels. The agency has set aside $900 million in funding for the development of SMRs.

The Energy Department estimates the US will need approximately 700-900 GW of additional clean, firm power generation capacity to reach net-zero emissions by 2050, adding that nuclear energy already provides nearly half of carbon-free electricity in the country.

Source: https://finance.yahoo.com/news/big-tech-investments-reignite-debate-over-advanced-nuclear-reactors-133016399.html

Bloomberg News

Fri, October 25, 2024 at 1:31 AM EDT 1 min read

(Bloomberg) — China’s copper demand growth will fade in coming years before topping out around the end of this decade, according to a state-backed government researcher, offering a potential counterpoint to bullish views on the metal’s prospects.

While Beijing Antaike Information Development Co. forecasts substantial growth in demand from the renewables sector, a key focus of copper optimists, it also sees an impact from a slowing Chinese economy and from buyers switching over to aluminum.

China’s demand growth in the five years up to 2030 will average 1.1%, down from 3.9% in the five years to 2025, Antaike analyst Yang Changhua said at the group’s conference in Wuhan. The copper intensity of renewables investment is falling as industries bid to reduce usage or find alternative materials, he said.

For the past half-decade, there have been a series of eye-watering forecasts for copper, largely resting on the idea that the world’s mines will struggle to keep up with a long demand boom. Prices reached a record earlier this year amid emerging signs of supply tightness.

Key risks to the “peak by 2030” forecast include the future strength of China’s manufacturing exports, or the relocation of factories overseas, Yang said. He didn’t give an outlook for global copper demand.

China’s combined consumption of copper from electric vehicles plus the solar and wind industries will rise to 3.1 million tons by 2030, Yang said. That will be 26% of the nation’s total demand, up from 15% in 2023.

©2024 Bloomberg L.P.

Source: https://finance.yahoo.com/news/china-copper-demand-peak-2030-053139126.html

Daniel Howley · Technology Editor

Updated Wed, October 23, 2024 at 4:14 PM EDT 7 min read

Artificial Intelligence has driven shares of tech companies like Microsoft (MSFT), Amazon (AMZN), Nvidia (NVDA), and Google (GOOG, GOOGL) to new highs this year. But the technology, which companies promise will revolutionize our lives, is driving something else just as high as stock prices: energy consumption.

AI data centers use huge amounts of power and could increase energy demand by as much as 20% over the next decade, according to a Department of Energy spokesperson. Pair that with the continued growth of the broader cloud computing market, and you’ve got an energy squeeze.

But Big Tech has also set ambitious sustainability goals focused on the use of low-carbon and zero-carbon sources to reduce its impact on climate change. While renewable energy like solar and wind are certainly part of that equation, tech companies need uninterruptible power sources. And for that, they’re leaning into nuclear power.

Tech giants aren’t just planning to hook into existing plants, either. They’re working with energy companies to bring mothballed facilities like Pennsylvania’s Three Mile Island back online and looking to build small modular reactors (SMRs) that take up less space than traditional plants and, the hope is, are cheaper to construct.

But there are still plenty of questions as to whether these investments in nuclear energy will ever pan out, not to mention how long it will take to build any new reactors.

A nuclear AI age

While solar and wind power projects provide clean energy, they still aren’t the best option for continuous power. That, experts say, is where nuclear energy comes in.

“Nuclear energy is, effectively, carbon-free,” explained Ed Anderson, Gartner distinguished vice president and analyst. “So it becomes a pretty natural choice given they need the energy, and they need green energy. Nuclear [power] is a good option for that.”

The US currently generates the bulk of its electricity via natural gas plants that expel greenhouse gases. As of 2023, nuclear power produced slightly more electricity than coal, as well as solar power plants.

Last week, Google signed a deal to purchase power from Kairos Power’s small modular reactors, with Google saying the first reactor should be online by 2030, with plants expected to be deployed in regions to power Google’s data centers, though Kairos didn’t provide exact locations.

Amazon quickly followed by saying just two days later that it is investing in three companies — Energy Northwest, X-energy, and Dominion Energy — to develop SMRs. The plan is for Energy Northwest to build SMRs using technology from X-energy in Washington State and for Amazon and Dominion Energy to look at building an SMR near Dominion’s current North Anna Power Station in Virginia.

Last month, Microsoft entered into a 20-year power purchasing agreement with Constellation Energy, under which the company will source energy from one of Constellation’s previously shuttered reactors at Three Mile Island by 2028.

Three Mile Island suffered a meltdown of its other reactor in 1979, but according to the Nuclear Regulatory Commission, there was no serious impact to nearby people, plants, or animals, as the plant itself kept much of the dangerous radiation from escaping.

In 2023, Microsoft announced it would source power from the Sam Altman-chaired nuclear fusion startup Helion by 2028. Altman also chairs the nuclear fission company Oklo, which plans to build a micro-reactor site in Idaho. Nuclear fusion is the long-sought process of combining atoms that produces power without dangerous nuclear waste. No commercial applications of such plants currently exist.

Microsoft founder Bill Gates has also founded and currently chairs TerraPower, a company working to develop an advanced nuclear plant at a site in Wyoming.

Nuclear is expensive and some technologies are still untested

Nuclear power output has remained stagnant for years. According to US Energy Information Administration press officer, Chris Higginbotham, nuclear power has contributed about 20% of US electricity generation since 1990.

Part of the reason has to do with the fear of meltdowns, like the one at Three Mile Island, as well as the meltdowns at Chernobyl in Ukraine in 1986 and the Fukushima Daiichi plant in Japan in 2011.

Chernobyl was the worst meltdown ever, spreading radioactive contamination across areas of Ukraine, the Russian Federation, and Belarus, resulting in thyroid cancer in thousands of children who drank milk that was contaminated with radioactive iodine, according to the Nuclear Regulatory Commission.

Plant workers and emergency personnel were also exposed to high levels of radiation at the scene. The Fukushima plant suffered multiple meltdowns as a result of a massive earthquake and subsequent tsunami, which caused significant damage to three of the plant’s six reactors.

But according to the United Nations Scientific Committee on the Effects of Atomic Radiation (UNSCEAR) as of 2021, “no adverse health effects among Fukushima residents have been documented that could be directly attributed to radiation exposure from the accident.”

Outside of the perception, nuclear plants are expensive and take time to construct.

Georgia Power’s two Vogtle reactors came online in 2023 and 2024, after years of delays and billions in cost overruns. The reactors, known as Unit 3 and Unit 4 were originally expected to be completed in 2017 and cost $14 billion, but the second reactor only started commercial operations in April this year. The final price tag for the work is estimated to top out at $31 billion, according to the Associated Press.

The explosion in cheap energy from natural gas has also made it difficult for nuclear plants to compete financially. Now nuclear companies are hoping SMRs will lead the way in building out new nuclear energy capacity. But don’t expect them to start popping up for a while.

“The SMR conversation is really long term,” Jefferies managing director and research analyst Paul Zimbardo told Yahoo Finance. “I’d say almost all of the projections are into the 2030s. The Amazons, the Googles, some of the standalone SMR developers, 2030 to 2035, which is also what some of the utilities are saying as well.”

What’s more, Zimbardo says, power generated by SMRs is expected to cost far more than traditional plants, not to mention wind and solar projects.

“Some of the projections are well above $100 a megawatt hour,” Zimbardo explained. “To put it in context, an existing nuclear plant has a cost profile of around $30 a megawatt hour. Building new wind, solar, depending on where you are in the country, can be as low as $30 a megawatt hour, or $60 to $80 a megawatt hour. So it’s a very costly solution.”

Not everyone is buying the promise of SMRs, either. Edwin Lyman, director of nuclear power safety at the Union of Concerned Scientists, says the small-scale reactors are still an untested technology.

“Despite what one might think of all the brain power at these tech companies, I don’t think they’ve done their due diligence,” Lyman told Yahoo Finance. “Or they’re willing to entertain this as a kind of side show just so they have all their bases covered to deal with this postulated massive expansion and demand for data centers.”

Lyman also takes issue with the idea that SMRs will be able to get up and running quickly and begin providing reliable power around the clock at low cost.

“The historical development of nuclear power shows that it’s a very exacting technology, and it requires time, requires effort, requires a lot of money and patience,” he said. “And so I think the nuclear industry has been trying to make itself look relevant, despite their recent failures to meet cost and timeliness targets.”

Still, with tech companies promising an AI revolution that requires power-hungry data centers, nuclear may be the only realistic green choice until solar and wind can take over permanently.

Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.

Source: https://finance.yahoo.com/news/big-tech-is-going-all-in-on-nuclear-power-as-sustainability-concerns-around-ai-grow-201418764.html