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Nuclear Power, friend or foe, green or green washing?

‘Net Zero Isn’t Possible Without Nuclear. Confronting climate change means acknowledging hard realities. The world can’t decarbonize without nuclear power — and it can’t expand its nuclear output without rethinking the rules. Time is running short.’ (The Washington Post).

In the world of sustainability and climate change, nothing seems quite as contentious or polarising as the debate about nuclear power. So what’s it all about, and why is it controversial? All matter in the universe is made up from tiny units called atoms and nuclear energy is the energy within the core of these atoms (their nucleus). There is a huge amount of this energy in an atom's nucleus, which can then be used to create electricity.

But before nuclear energy can be utilised to create electricity, it must first be released from the atom. With nuclear fission, atoms are split to release that energy. A nuclear reactor / power plant, is a sequence of machines that can control this nuclear fission process to produce electricity.

Nuclear reactors use the fuel uranium to produce nuclear fission, by forcing the atoms of uranium to break apart. During the split, the atoms release tiny particles called fission products, which then cause other uranium atoms to split, starting a chain reaction. The energy released from this chain reaction generates heat.

This heat produced by nuclear fission warms the reactor's cooling agent, which is usually water, though some use molten salt or liquid metal. The cooling agent, from the heat caused by nuclear fission, then produces steam, which turns turbines. The turbines then drive generators, or engines that create electricity. But when we hear the word ‘nuclear’ we are likely to associate it with very negative concepts which could lead us to conclude all things nuclear are bad and in opposition to a peaceful and sustainable world.

The most significant association being of course nuclear weapons, an explosive device that uses the force from nuclear reactions to produce destruction. Where either fission (fission bomb) or a combination of fission and fusion reactions (thermonuclear bomb), produces a nuclear explosion. Both of these types of bomb release great quantities of energy from relatively small amounts of matter. As nuclear weapons are the most dangerous weapons on earth, and one can destroy a whole city, potentially killing millions, it’s not surprising that the word nuclear can create fear. The cognisance of this threat has increased across civilisations, due to the ongoing war between Russia and Ukraine, and Russia having the most confirmed amount of nuclear weapons.

Then you have nuclear energy catastrophes, such as Chernobyl or Fukushima. In 1986 an accident occurred at the Chernobyl nuclear power station in the Soviet Union, the worst disaster in the history of nuclear power generation (according to the International Nuclear Event Scale INES). The Chernobyl power station consisted of four reactors, each capable of producing 1,000 megawatts of electric power. The disaster occurred when technicians at reactor Unit 4 endeavoured to undertake a poorly planned experiment, which led to the chain reaction in the core going out of control. Several explosions produced a large fireball, and forced off the heavy steel and concrete lid of the reactor. This, and the ensuing fire in the graphite reactor core, released large amounts of radioactive material into the atmosphere, where it was carried great distances by air currents.

The Fukushima nuclear accident was also a major nuclear accident, this time at the Fukushima Daiichi nuclear power plant in Japan in 2011. It started due to the nearby 2011 Tōhoku earthquake and tsunami, which caused grid failure that damaged nearly all of the power plant's backup energy sources. There was subsequent incapability to adequately cool reactors after shutdown prevented containment, this resulted in release of radioactive contaminants into the neighbouring environment. Investigations cited fault in both safety and oversight, including failures in risk assessment and evacuation planning. Further controversy exists in relation to the disposal of treated wastewater once used to cool the reactor. This has resulted in various protests in nearby countries.

Despite these nuclear disasters and threats, there are many that feel that old-fashioned fission is positioned to make a comeback thanks to innovative new reactor designs, and the basic reality that sometimes the sun doesn’t shine and the wind doesn’t blow. This intermittency therefore requires either unrealistic large storage capacities, or more reliable sources of power to fill these gaps. As it stands these sources are mostly coal and natural gas, hence fossil fuels currently supply about 80% of the world’s energy (Environmental and Energy Study Institute).

Nuclear is the obvious alternative to fossil fuels to plug the gap as a fission reactor produces clean, reliable, efficient energy regardless of the weather. In spite of the unease raised by rare accidents, such as those mentioned at Chernobyl and Fukushima, the risks of nuclear power are exceedingly low per unit of energy produced, and the newer reactor designs are even safer. The dangers posed by radioactive waste are also said to be rapidly declining, due to improved tools and processes. It is also worth noting that according to the World Nuclear Association; ‘in addition to producing very significant emissions of carbon, hydrocarbon industries also create significant amounts of radioactive waste. The radioactive material produced as a waste product from the oil and gas industry is referred to as technologically enhanced naturally occurring radioactive materials (Tenorm)’.

In truth, no industry is guaranteed safe, when it comes to the risk of accidents, but they must learn from them. The risks associated with certain industries appear to be an acceptable price for humanity’s dependency on the products and services provided. With nuclear power, the high energy density makes the possible danger overtly obvious. Hence this has always been a factor in the design of nuclear power plants. Despite there being few accidents, the media appetite for nuclear power accidents remains high in contrast with other industrial accidents, which receive somewhat little news coverage.

According to the World Nuclear Association, a commercial-type power reactor simply cannot, under any circumstances, explode like a nuclear bomb, as the fuel is not enriched beyond about 5%, and a much higher enrichment than that is needed for explosives.

The World Nuclear Association also claim that the use of nuclear energy for electricity generation can be considered extremely safe. Whereas every year several hundred people die in coal mines which provide this widely used fuel for electricity. In the UK, Friends of the Earth commissioned a study by the Tyndall Centre, which used peer-reviewed academic literature, accompanied by literature from credible government, consultancy and policy sources. It concluded in January 2013 that “Overall the safety risks associated with nuclear power appear to be more in line with lifecycle impacts from renewable energy technologies, and significantly lower than for coal and natural gas per MWh of supplied energy.” (Friends of the Earth).

Nuclear energy has the benefit of being one of the most cost-effective energy solutions available, but this is following the initial cost of construction. The ongoing cost to produce electricity from nuclear energy is much lower than the cost to produce energy from gas, coal, or oil, however this is unless those resources are situated near the power plant they supply. Additionally, Nuclear energy also has fairly low risks for cost inflation, unlike traditional fossil fuels that regularly fluctuate in price.

Estimates say we have enough uranium on the planet to generate energy for the next 70-80 years (, and although this may not seem like a long time, it is in fact longer than many fossil fuels are estimated to last. There are also other nuclear energy sources being explored to power nuclear power plants.

So going back to Nuclear bridging a renewable gap / being used in conjunction with renewables to produce sustainable power, let’s revisit hydrogen and its different colours mentioned in my previous article ( where at this point we considered, green, grey and blue. Pink hydrogen, alternatively is hydrogen produced from nuclear energy, and it is proposed by some key proponents of a hydrogen led sustainable future to be the solution, when we cannot get a sufficient amount of energy through green hydrogen production to keep the grid going.

Representatives of EDF at the conference on Green Hydrogen, ran by the Western Gateway Partnership that I attended on 9th June 2023, discussed their approach to hydrogen using a combination of pink and green hydrogen projects to become leaders in low carbon H2. They are of the view that low carbon hydrogen produced by both renewables and nuclear is essential for reducing our dependence on fossil fuels. A 100MW pink hydrogen production plant can produce 63% more hydrogen than a green hydrogen plant, which could significantly reduce the cost of hydrogen production and increase the competitiveness of hydrogen fuel cells in various industries. (AZoCleantech).

In the United States, nuclear energy is widely used making up around 20% of all electricity generated in the United States (EIA). The stable production of power created by nuclear power plants means that it could ideally be used in conjunction with other forms of renewable energy. So, wind turbines generate significant amounts of power as the wind is blowing and whilst it’s blowing, nuclear plants can adjust energy output to be lower. However, when the wind ceases to blow and more energy is required, nuclear energy can be increased to compensate for the lack of wind (or solar) generated power.

But let’s be honest, nuclear energy is not itself a renewable energy as like fossil fuels it involves mining, and mining for uranium, which is not an environmentally friendly process. Open-pit mining for uranium is safe for miners but leaves behind radioactive particles, causes erosion, and even pollutes nearby sources of water. Underground mining isn’t much better and exposes miners to high amounts of radiation while producing radioactive waste rock during extraction and processing.

However, if the alternative is fossil fuel mining, it’s the lesser of two evils. In 2002, the IAE conducted a review, through combining existing studies in order to compare fatalities per unit of power produced for numerous leading energy sources. They examined the life cycle of each fuel from extraction to post-use and added deaths from accidents, as well as from long-term exposure to emissions / radiation. This found nuclear to come out as the best, and coal the deadliest energy source.

“There is no question,” says Joseph Romm, an energy expert at the Center for American Progress in Washington DC. “Nothing is worse than fossil fuels for killing people.” (New Scientist). A further benefit to nuclear, is that nuclear fission releases much greater amounts of energy than simply burning fossil fuels like gas, oil, or coal. Nuclear fission is nearly 8,000 times more efficient at producing energy than traditional fossil fuels (enCore energy). That’s a considerable amount of energy density. Because nuclear energy is more efficient, it requires less fuel to power the plant and therefore creates less waste as well.

Therefore, switching to uranium might give us the extra time we need to find better and cleaner renewable energy resources and if in that time, scientists are able to turn nuclear fusion into a reality, then we would theoretically never run out of electricity ever again (insert link to previous article on nuclear fusion). Plus, some countries like India, China, and Russia are already working towards using the greener and more abundant thorium to power nuclear reactors. If we switch to thorium we will have even longer than 80 years of fuel available.

In 2019 the IEA reported that over the past 50 years, the use of nuclear power has reduced CO2 emissions by over 60 gigatonnes, which is nearly two years’ worth of global energy-related emissions.

Although nuclear energy production does not create any emissions, it does produce radioactive waste that must be securely stored so it doesn’t pollute the environment. While radiation sounds frightening, in fact we are continually exposed to minor amounts of radioactivity from rays or radon in the air we breathe. In lesser quantities, radiation isn’t harmful, however the radioactive waste from nuclear energy production is extremely dangerous. Thus the storage of radioactive waste is a main challenge facing nuclear power plants. There is no way to extinguish nuclear waste, so the current solution is to securely seal it in containers to store deep underground. As technology improves, hopefully they will find improved ways of storing radioactive waste. Still, many environmentalists oppose nuclear power, citing the risk of nuclear meltdowns and the difficulty of properly disposing of nuclear waste.

Where do we sit? Is it ideal and without issues, no, but is it necessary, well if it helps us fight climate change in the time required, as a means to an end and in conjunction with renewables, and we don’t have an available flawless alternative path then yes? Can we afford to be idealistic which in reality this would lead to a longer, heavier reliance on fossil fuels, which we have seen is far more dangerous than nuclear, or do we need to be more grounded and pragmatic. As sustainable investors who understand the essential need to a transition to a low carbon and sustainable economy for people and planet, we are therefore realistic about nuclear, rather than an outright exclusion, we need to consider it case by case and how it sits with, and supplements, renewable tech and innovation, and maintain our diligence, as part of our journey to lower emissions and combatting climate change.

This pragmatism and positioning is echoed in Rishi Sunak’s most recent speech on Net Zero (20th September 2023) where he stated, ‘we’re building new nuclear power stations for the first time in thirty years. Just this week, we took a significant long-term decision to raise funding for Sizewell C - putting beyond all doubt our commitment to decarbonising our power sector.

And later this autumn, we’ll shortlist the companies to build the new generation of small modular reactors.’ (Prime Minister’s Office). Sources:

IMPORTANT NOTICE: This is a marketing communication from Alpha Beta Partners a trading name of AB Investment Solutions Limited. Registered in England at Northgate House, Upper Borough Walls, Bath BA1 1RG. AB Investment Solutions Limited is authorised and regulated by the Financial Conduct Authority. Reference No. 705062. This material is directed only to Financial Advisers in the UK and is not an offer or invitation to buy or sell securities. Opinions expressed, whether in general or both on the performance of individual securities and in a wider context, represent the views of Alpha Beta Partners at the time of preparation. They are subject to change and should not be interpreted as investment advice.

You should remember that the value of investments and the income derived there from may fall as well as rise and your clients may not get back the amount that they have invested. Past performance is not a guide to future returns.


Important Information

This material is directed only at persons in the UK and is not an offer or invitation to buy or sell securities.

Opinions expressed, whether in general, on the performance of individual securities or in a wider context, represent the views of Alpha Beta Partners at the time of preparation. They are subject to change and should not be interpreted as investment advice.

You should remember that the value of investments and the income derived therefrom may fall as well as rise and you may not get back your original investment. Past performance is not a guide to future returns.

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