Why Advanced Nuclear Reactors Benefit Industry And Coal-Dependent States

The chemical maker DowDOW
will develop a small nuclear reactor for industrial applications, potentially replacing natural gas that is now burned at extremely high temperatures to make changes to chemical compounds. Advanced nuclear technologies, however, achieve the same result without releasing carbon emissions.

The so-called Generation IV high-temperature reactors are best known for electricity generation. But they can also be used by industry. Because they operate at 800 degrees Celsius, they can process chemicals, desalinate ocean water, and produce clean hydrogen for electricity and transportation. Even better: the reactors can locate where shuttered coal plants once stood, restoring economic health to devastated regions of the country.

“Electricity is the low-hanging fruit,” says Patrick White, project manager for the Nuclear Innovation Alliance, in a talk with this writer. “We have not yet integrated nuclear energy with large chemical facilities. There may be some hiccups and things to work through. But we will see the first reactors for industrial applications at the end of the decade. After building the fourth and fifth reactors, companies will sign up in droves. The goal is decarbonization.”

Specifically, Dow is partnering with X-energy to develop a small modular reactor at one of Dow’s sites along the Gulf Coast, which could go live in 2030. Dow is also taking a minority ownership position in X-energy. Each modular reactor can generate 80 megawatts. But they can be stacked together to produce 320 MW, providing clean, reliable, and safe baseload power to support electricity systems or industrial applications.

Existing U.S. nuclear reactors are the second generation, although Southern Company is building third generation reactors developed by Westinghouse. The small modular reactors are the fourth generation, producing more electricity at less cost. The third and fourth generations will automatically shut off during an emergency.

“Advanced small modular nuclear technology is going to be a critical tool for Dow’s path to zero-carbon emissions and our ability to drive growth by delivering low-carbon products to our customers,” says Jim Fitterling, Dow’s chief executive officer. “X-energy’s technology is among the most advanced, and when deployed will deliver safe, reliable, low-carbon power and steam.”

Hard to Decarbonize Sectors

Currently, 99% of the world’s hydrogen production has been from fossil fuels. That’s called grey hydrogen. The objective is to get to green hydrogen, whereby solar panels or wind turbines produce electricity using an electrolyzer. But the heat and electricity from nuclear energy can also split the water molecule to produce hydrogen — which is used to refine oil, produce steel, or make chemicals.

Such a process is emissions-free and much-needed. According to the U.S. Environmental Protection Agency, electric power caused 25% of global greenhouse gas emissions, while industrial operations accounted for 24%. Transportation made up 27%, all in 2020.

Nuclear energy can also desalinate seawater. According to the International Atomic Energy Agency, 40 million cubic meters of potable water supplies are produced daily — mainly in the Middle East and North Africa, using fossil fuels to draw the steam or electricity to facilitate the process. But it points out that nuclear energy and desalination plants combine in Japan and Kazakhstan, where commercial facilities have been operating since the 1970s.

“If we are interested in clean energy, think about all the fuel sources we have,” says the alliance’s White. “Electricity production is about 25% of our emissions. Nuclear can address the hard-to-decarbonize industrial sectors. Nuclear plants need to also run at full capacity. Using them for desalination and hydrogen production — while producing reliable electricity — is good synergy and cost-effective.”

To be sure, there are many hurdles to overcome. Nuclear fuels are often characterized based on their concentration of a specific uranium isotope, U-235. The reactors operating today in the United States require a fuel enrichment level of 3%-5% U-235, known as low-enriched uranium fuels. Many advanced reactors under development will require higher fuel enrichment levels, some up to 20% U-235. This higher enrichment uranium fuel is called high-assay, low-enriched uranium (HALEU).

The main challenge for advanced reactors that require HALEU fuel is that the material is not commercially available in the United States. The only supplier is the Russian state-owned company TENEX — not desirable under today’s circumstances. But federal incentives could catalyze domestic production of the fuel and create an enduring value chain. Otherwise, Australia, Canada, and Kazakhstan also provide it.

Can Nuclear Replace Coal?

At the same time, the cost of building those advanced nuclear reactors is difficult to quantify. More certainty will come after developers start designing plants and modeling expenses. Further, as society prices carbon, nuclear power will be more appealing. Consider that GE Hitachi Nuclear Energy is working with Ontario Power Generation to build a small reactor that will start in 2024: they are trying to get others to implement the same technology to drive down costs.

Nuclear power, of course, has been met with resistance since the Three Mile Island incident in 1979. But decarbonization efforts could change that — especially those to help coal-dependent regions. West Virginia’s legislature has enacted policies to allow small modular reactors to replace retired coal plants. Indiana, Illinois, Montana, and Wyoming are considering similar moves.

Indeed, Simon Irish, chief executive of Terrestrial Energy, writes that fourth-generation nuclear plants can replace coal facilities, reinvigorating the communities that have hosted them. Because those advanced reactors can operate at the same temperatures as a coal-fired boiler, it is a practical idea. Moreover, the replacement unit is emissions-free.

Jigar Shah, the director of the Department of Energy’s Loan Programs Office, endorses that thinking, saying the move is a logical start, because the infrastructure and grid connections are already in place. His agency is providing $11 billion to help develop small modular reactors.

“If the nuclear industry does what it has for decades, people will be hesitant,” says White, with the Nuclear Innovation Alliance. “It has not dealt well with the public. We now have an opening to give nuclear another chance because of decarbonization. But we must build trust with communities and explain the technologies. We need to make sure they are comfortable with it. We need to get a social license for nuclear energy — so that people want it in their backyards.”

A nuclear energy renaissance may finally happen. Decarbonization is the impetus. But the Inflation Reduction Act adds tax benefits that will pique the interest of investors and lenders, benefiting delicate communities and the broader economy. Dow spots an opportunity — a potential precursor for other manufacturers.