POLICY & FINANCE | BUILDING AN INVESTMENT CASE


and these layerings that are inhibiting its development. We are not only making it more expensive but actually we’re missing out some key sustainability advantages as well,” says Kotek. Nonetheless, considering what is actually required


to meet the 2°C scenario from the Paris agreement, the amount of solar, wind, batteries and EVs and the associated nickel, copper and lithium materials that are needed and all the mines that need to be developed too it is clear that nuclear must be part fo the solution. “If you look at where things are today and where they


need to be in 10 years we’re just nowhere near. So there’s going to be a reckoning at some point. Nuclear is potentially a backfill for some of the challenges that we’re going to see in the medium term on the renewables front. We haven’t really hit it yet but we’re starting to feel it in the EV world where the battery supply chain issues are real and it’s around the materials supply chain. There is going to be a more pressing overall drive for


Above: The regulatory environment can represent a major risk for investors. Governments can do more to support technology through regulatory oversight Photo credit: US NRC


“If we think about the three buckets of risk in


construction, having more than a verbal promise and an actual investment mitigates that first step in terms of the design development and the licensing. Certification is part of the process that isn’t actually anything to do with the commercialisation or the deployment of the reactor. It actually distracts from what is needed and I think it’s getting it to the point where they [governments] have a stake in the ground as well. if we are going to actually see nuclear getting to the heights that it has the potential to, these localised regulatory hurdles do need to be mitigated and perhaps there is some benefit in looking at how other industries have been able to do that, like aviation. Leveraging learnings from other industries that might deal with some of the same complexities or risks and are also global is another way of looking at how players can actually progress and not impede progress,” says Kotak. A strong message for governments looking at


expanding nuclear capacity would be to deliver the same regulatory coherence which exists in aviation and which is conspicuously missing from the advanced and SMR sector. “There’s probably some technology consolidation that needs to take place too,” notes Kotek. “There’s just too many different designs and that adds complexity too. The regulator has to examine 80 different technologies and they all have different approaches. This is a nightmare and having fewer technologies is probably something that’s going to need to take place as well.”


Value added factors “In the beginning of the nuclear build out people talked about electricity being too cheap to meter. They said that because it was actually really cheap,” says Kotek. Certainly there are ractors built in the 1970s and 1980s that are still running and for a fraction of the cost of just about any other form of electricity generation that is available today. Kotek continues: “They’re really reliable, safe and they’ve been running for 50 years or more. We somehow lost track of that and the rise of all the clean energy sources like wind and solar have now created a stronghold. Actually though, when you look at the sustainability advantage of nuclear it is more favourable, yet we’ve added in these complexities


28 | July 2023 | www.neimagazine.com


alternative technologies and we really mean nuclear if we mean low carbon,” says Kotek. She adds: “It’s not to pit nuclear against renewables. It’s more that renewables may not be able to get there in time because of the mining issues. Again, it’s a risk management issue given the obvious resource risk for renewables. If you were an investor and considered the technical risk of choosing one technology over another maybe they’re not considering there are other perhaps pressing risks that are associated with other technologies,” says Kotek. Considering the complexity and the sheer volume of


different technologies it’s very difficult to unpack all the issues and to see across the value chain where the pain points are. However, Kotek argues that a lot of activity in the small and advanced nuclear sector reflects this realisation that nuclear is going to be needed to transition to a low carbon energy scenario. “My personal view is that nuclear has to play a part and there’s no way around it,” she says. Turning to the messaging for investors about how


to address some of these risks, she emphasises the commercial risks and ways to mitigate those risks by, for example, having a champion who would partner with developers to provide a ready market but also work with them in the development process and ease that process to reduce the construction development risks, but she also highlights the role that investors themselves can play: “This is all from the perspective of what investors need to feel more comfortable with making a large investment in nuclear. But investors can also have a voice to rally behind these points. A lot of trends that we were starting to see are because of the Russia-Ukraine war in terms of increased policy support like the US Inflation Reduction Act. So, the foundations are there for investment and now maybe it’s also on the investors to say what do they need to be able to make a comfortable decision. They need that de-risk and more of these tangible measures like having the regulatory licensing process paid for, but I think it’s also a point for them as well to shout a little bit as to what is needed to de-risk.” Her key message: “An advanced nuclear rollout is not


a ‘nice to have’ it’s a ‘must-have’ if we’re going to have an energy transition that works in any time line that makes sense for climate. There’s a real need for this and investors should think about that and ultimately how the scale of this is going to increase.” ■


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