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New!Nuclear!
Summary!
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October!17,!2014!
New Nuclear
Summary Points
The Case
The developing countries of the world need massive amounts of low-cost energy to build
their economies and to lift their citizens out of poverty.
Base-load power is essential to economic growth, and fossil fuel plants are the cheapest,
most accessible alternative.
Data from the US Energy Information Agency (EIA) and the International Organization
for Economic Cooperation and Development (OECD) is unambiguous; China, India, and
the developing countries of the world are telling us that they will continue to build coal
power plants to supply the lions share of their energy needs they have told the world
that they will build more coal plants over the next 20 years than all other energy sources
combined (i.e. natural gas, wind, solar, geothermal, nuclear, hydroelectric, etc. see
Appendix A).
Clean water, sanitation, and indoor air quality are public health priorities in developing
countries. China and India serve the near to mid-term public health of their citizens by
trading outdoor air pollution and CO2 emissions from burning fossil fuels in exchange
for affordable water/sewage treatment and displacement of indoor cooking fires (see
Appendix A).
Time is of the essence if we want to steer China and India from building out massive
fossil fuel economies that in all likelihood will accelerate worldwide CO2 emissions to
threatening levels regardless of our own domestic energy choices. We need to show
them a concrete alterative within 5 to 10 years to make a difference.
Fortunately, a new generation of nuclear technology (New Nuclear) is on the drawing
boards, created by American entrepreneurs and scientists. New Nuclear is both safe and
potentially cheaper than fossil fuel-based energy if the US government will allow the
technology to be tested and licensed in an economic manner.
Recommendations
Licensing New Nuclear technologies under current US rules will take too long and will be too
expensive (estimates between 7 to 10 years and $500M+) to permit the rapid experimentation
that drives innovation in most of the US economy. Private US investors are willing to develop
New Nuclear technologies but we need the following:
Create a license-by-test process modeled after the FDA and FAA systems, which
balance risk of uncertainty with benefits of timely technology deployment. These
systems employ clearly defined experimental stages of testing and expected outcomes to
deploy safe, effective and economic products in a timely manner (see Appendix B).
Create rapid development sites at select US nuclear reservations (i.e., PNNL-Washington,
INL-Idaho, ORNL-Tennessee, SRNL-South Carolina, etc.); permit the sale of electric
power from prototypes to help offset the cost.
Nuclear technology is here to stay. Countries around the world will continue to develop nuclear
technologies for energy, medicine, weapons, and other uses regardless of US national will or
policy. We can lead or we can follow. If we lead, we can innovate, influence, and prosper; it
will protect everyone from the threat of global climate change, enhance our national and energy
security, and quickly add a huge world-scale, high-growth industry to the US economy. If we
follow
We recommend assembling a small team with members from Congressional Staff, DOE, NRC,
the nuclear industry, private investors, and business process/new product development experts.
This team should be tasked with identifying realistic, actionable steps that can be taken now and
in the future to allow the US to regain and then to maintain its leadership position in the nuclear
industry.
Appendix A
September 2014
Copyright @ 2014 President & Fellows of Harvard College
1
A Thought Experiment:
Are Energy Efficiency & Renewables in the
US, EU and Japan Enough?
Source:(UN(WPP(2012,(EIA(
Note:(Following(Hargraves((2012)(presentaBon.(EsBmates(require(energy(use(per(capita(in(2040(to(become(approximately(50%(of(US(
levels(in(2012(i.e.(6.65(MWh(per((person(per(year(for(the(whole(world.(
2
So,What Do We Know?
EIA Projections of
Energy Generation Capacity
9,000
Electricity)Generation)(GW)
8,000
7,000
6,000
Rest0of0World
5,000
China
4,000
India
3,000
Japan
2,000
EU
1,000
0
2010
US
2015
2020
2025
2030
2035
2040
Source:(EIA(
Note:(2010(reects(historical(data,(whereas(2015R2040(are(EIA(projecBons.(
4
CO2$Emissions$(millions$of$tons)
40,000
35,000
30,000
Rest,of,World
25,000
China
20,000
India
15,000
Japan
10,000
EU
5,000
0
2010
US
2015
2020
2025
2030
2035
2040
Source:(EIA(
Note:(2010(reects(historical(data,(whereas(2015R2040(are(EIA(projecBons.(
5
500
2040
400
300
200
100
Generation/capacity/(GW)
Generation0capacity0(GW)
600
2010
1200
2040
1000
800
600
400
200
United States
China
Generation/capacity/(GW)
300.0
2010
250.0
2040
200.0
150.0
100.0
50.0
0.0
EU
Source:(EIA(
Note:(2010(reects(historical(
data,(whereas(2015R2040(are(EIA(
projecBons.(
6
Source:(Jeries,(hVp://www.businessinsider.com/jeeriesRchinasRepicRpolluBonRisRsavingRlivesR2013R1(
Note:(Uses(WHO(Public(Health(StaBsBcs(
8
EIA Projections
Alternatives, Economics &
the Choices of Nations
1400
2010
200.0
2040
150.0
100.0
50.0
0.0
Generation/capacity/(GW)
Generation.capacity.(GW)
250.0
2010
1200
2040
1000
800
600
400
200
India
China
Source:(EIA(
Note:(2010(reects(historical(data,(whereas(2015R2040(are(EIA(projecBons.(
9
Probabilistic Temperature Estimates for Magnitude and Timing of AR5 IPCC scenarios
10
11
The Chinese and India governments are committed to raising the standard of living in their countries to Western per
capita economic and public health standards
The Chinese and Indian government actions say that the certain short-run benefits of low-cost coal energy are likely
to offset the uncertain long-run costs of coals climate change impacts to their citizens.
The Chinese and perhaps Indian government actions say that they will build green supply chains if needed for
export sales to Europe and North America while serving themselves and their ROW exports with brown supply
chains. The Chinese and perhaps the Indian governments will clear up local pollution that impacts their own citizens
directly even if that energy required for that clean-up increases their net CO2 emissions.
The world will need to adapt to their choice.In my opinion, there is a material likelihood that our world is very
already changed forever ..
In my opinion, most of the rich will not materially feel these changesBut, many of the poor will materially
suffer from these changes
In my opinion, we need to use markets to drive efficient, effective change by fully-pricing each unique
source of energy to consumers, utilizing tax-revenue neutral escalating carbon taxes, catastrophe/
remediation taxes and security-of-supply taxes, enforced with international border tariffs
In my opinion, all nations should encourage the hunt for an energy miracle that can significantly impact
Indian and Chinese energy choices and CO2 emissions as well as their own within 5-10 years ..No nation is in
the lead.. It is an open game for the bold. That energy miracle is probably *new* nuclear
In the end, in my opinion, we will all need to move to zero net carbon emissions as well as quite possibly supporting
a geo-scale carbon dioxide capture and storage miracle in the next 10-20 years. And, we all need to prepare for
adaptation to what quite possibly is an already very changed and rapidly changing world.
12
Appendix B
October 2014
Copyright @ 2014 President & Fellows of Harvard College
1
Information
Produced
Time
Purchased
In Round
Cumulative
Cash Flow
Time
1st
Round
3rd
Round
2nd
Round
Seed
Stage
2
0.7
62.4%
0.6
52.8%
0.5
0.4
0.3
20.1%
0.2
15.7%
15.3%
12.6%
9.1%
0.1
5.3%
3.5%
3.1%
0
<1X
1X to 3X
3X to 6X
Multiple on Invested Capital
% of Cost
>10X
6X to 10X
% of Value
Open Source +
Horizontal Scaling
Cloud +
Amazon Web
Services
Developers Start
Companies
$500k
2000
2005
$50k
$5k
2009
2011
Number of drugs
approved
AZN
11,790.93
58,955
GlaxoSmithKline
GSK
10
8,170.81
81,708
Sanofi
SNY
7,909.26
63,274
Roche Holding AG
RHHBY
11
7,803.77
85,841
Pfizer Inc.
PFE
14
7,727.03
108,178
JNJ
15
5,885.65
88,285
LLY
11
4,577.04
50,347
Abbott Laboratories
ABT
4,496.21
35,970
MRK
16
4,209.99
67,360
Bristol-Myers Squibb
Co.
BMY
11
4,152.26
45,675
Novartis AG
NVS
21
3,983.13
83,646
Amgen Inc.
AMGN
3,692.14
33,229
Company
Ticker
AstraZeneca
Sources: InnoThink Center For Research In Biomedical Innovation; Thomson Reuters Fundamentals via FactSet Research Systems
Stage
Capital Required
($ million USD)
Purpose and
Objective
Market Value
($million USD)
Historical
Success
(probability)
Pre-clinical
15
10 50
Pre-human
validation
10 20
10%
Phase I
12
5 20
Safety
10 50
65%
Phase II
23
20 50
50%
Phase III
40 100
65%
20 50
Manufacturing
and FDA
Approval
New Drug 1
Application
500 1000
90%
Elapsed
Time
(years)
Capital Required
($ USD)
Purpose and
Objective
13
$5-10M
Phase I
Viability
23
$10 150M
Phase II
Scalability
25
$200 500M
Stage
Science &
Economics
Phase III
2
Full Power
Approved
NPP IPP
Total 5-7
yes
$500M
$1B Including
Licensing
Market
Value
($million
USD)
Historical
Success
(probability)
1st Option to
Abandon
1st Utility
Evaluation
1st Option
for Financial
Exit
Site-Specific Licensing,
Training & Supply-Chain
Audit
9
Elapsed Time
(years)
Capital Required
($ USD)
$10M
1 - Build
1- NonNuclear Test
$50M
Full-Scale
Prototype Bidding
& Vendor Selection
Phase I
Non-Nuclear
Full-Scale
Demo
Phase IIa
$130M
Ramp-Up by Must
Pass Test Stages to
Full Power then
Characterization
Approval of Design Basis
Casualty Tests.
$225M
Nuclear
Full-Scale
Prototype
Phase IIb
FOAK Nuclear
Power Plant
Approved
NPP IPP
$415M
Supporting Licensing
Site-specific Licensing
50GWe/yr Reactor Yard
Market Value
($million USD)
Historical Success
(probability)
Test-While -Licensing
- Build at Korean Yard
- Move to Nuclear Prototype Park
License-by-Testing
- Sell Power to Grid
- Operator Training