• • Coal's Decline Accelerates as Natural Gas and Renewables Boom
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  • By Robert Rapier - May 27, 2024
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  • Coal consumption has declined by 13.0 quadrillion BTUs since 2000, while natural gas consumption has increased by 13.4 quadrillion BTUs.
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  • Renewable energy consumption has increased by 8.4 quadrillion BTUs over the same period.
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  • Technological advancements, economic factors, and policy initiatives are driving efforts to reduce carbon emissions and promote cleaner energy sources.
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  The U.S. energy landscape has undergone a remarkable transformation since 2000. The changes reflect broader economic, technological, and policy trends that have influenced the nation’s energy mix.

  One area that has experience significant upheaval is the consumption patterns of coal, natural gas, and renewables. This is the story of that transformation.

  Early 2000s: Dominance of Coal

  At the beginning of the 21st century, coal was the dominant energy source for electricity generation in the United States. In 2000, coal consumption stood at 22.6 quadrillion British thermal units (BTUs), reflecting its widespread use in power plants across the country. This was primarily a reflection of coal’s relatively low cost and abundance in the U.S.

  Natural gas consumption was also substantial at 23.3 quadrillion BTUs, but it was primarily used for heating and industrial processes. However, it would soon be a rapidly growing fuel for electricity generation. Renewable energy, including hydroelectric, wind, solar, and biomass, contributed a modest 5.7 quadrillion BTUs.

  Mid-2000s: Rise of Natural Gas 

  Coal consumption remained relatively stable, peaking slightly in the mid-2000s before beginning a gradual decline. Renewables started to gain traction, largely due to increased investments in wind and solar energy.

  Late 2000s and Early 2010s: Shift Toward Cleaner Energy

  The late 2000s and early 2010s marked a significant shift towards cleaner energy sources. This period saw a rapid decline in coal consumption, dropping to 20.8 quadrillion BTUs by 2010, as environmental regulations tightened, and the economic advantages of natural gas became more apparent.

  

  Coal Natural Gas Renewables 2000 to 2023. Data Source: EIA. ROBERT RAPIER

  Natural gas consumption reached 24.7 quadrillion BTUs in 2010, benefiting from its lower carbon emissions and cost-effectiveness. Renewable energy continued its upward trajectory, reaching 7.6 quadrillion BTUs in 2010, spurred by federal and state incentives, technological advancements, and decreasing costs.

  Mid-2010s: Accelerated Decline of Coal and Rise of Renewables

  The trend towards cleaner energy sources accelerated in the mid-2010s. By 2015, coal consumption had fallen sharply to 15.7 quadrillion BTUs, while natural gas consumption continued to climb, reaching 28.3 quadrillion BTUs. Renewables saw significant growth, with consumption rising to 10.0 quadrillion BTUs, driven by substantial increases in wind and solar power capacity.

  Late 2010s to Early 2020s: Dominance of Natural Gas and Renewables

  The late 2010s to early 2020s solidified the dominance of natural gas and renewables in the U.S. energy mix. By 2020, coal consumption had plummeted to 10.7 quadrillion BTUs, reflecting the ongoing decommissioning of coal-fired power plants and a shift towards cleaner energy.

  Natural gas consumption reached 32.6 quadrillion BTUs in 2020. Natural gas played a role both as firm power (power on demand), in addition to a role in balancing intermittent renewable energy sources.

  Renewables saw remarkable growth, with consumption reaching 12.1 quadrillion BTUs in 2020, highlighting the significant contributions of wind, solar, and biomass energy.

  Recent Trends: Continued Growth of Natural Gas and Renewables

  In 2023, coal consumption bounced back a bit, while natural gas consumption grew to a record 36.5 quadrillion BTUs. Renewable energy consumption reached a record 14.7 quadrillion BTUs in 2023, reflecting ongoing investments in renewable energy infrastructure and the increasing role of wind and solar power in the national energy grid.

  Conclusions

  The period from 2000 to 2023 has seen a dramatic transformation in the U.S. energy landscape. Coal consumption declined by 13.0 quadrillion BTUs, while natural gas consumption increased by 13.4 quadrillion BTUs. Renewable consumption increased by 8.4 quadrillion BTUs over that period

  However, it should be noted that these comparisons are not apples-to-apples. When coal or natural gas are burned for power, most of the energy (60% to 70%) is lost in the conversion to electricity as heat. However, that is not the case for renewables. Thus, it can be said that a BTU of coal or natural gas consumption is not directly comparable to a BTU of renewable energy consumption when electricity is the measure being discussed.

  On the other hand, renewable energy is not firm power. Natural gas can be used to completely replace a coal-fired power plant. Renewables are better suited to serve marginal demand in a decentralized fashion. As a result, renewables and natural gas have worked well together to cause the massive decline in coal consumption this century.

  These trends are expected to continue as technological advancements, economic factors, and policy initiatives drive further efforts to reduce carbon emissions. The U.S. energy sector is poised for a future where renewables play a central role, supported by natural gas as a flexible and reliable energy source.

  By Robert Rapier 

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The High Cost of Moving Industry Offshore

By Gail Tverberg - May 27, 2024

Moving industrialization offshore can look like a good idea at first. But as fossil fuel energy supplies deplete, this strategy works less well. Countries doing the mining and manufacturing may be less interested in trading. Also, the broken supply lines of 2020 and 2021 showed that transferring major industries offshore could lead to empty shelves in stores, plus unhappy customers.

The United States started moving industry offshore in 1974 (Figure 1) in response to spiking oil prices in 1973-1974 (Figure 2).

Figure 1. US industrial energy consumption per capita, divided among fossil fuels, biomass, and electricity, based on data from the US Energy Information Administration (EIA). All energy types, including electricity, are measured their capacity to generate heat. This is the approach used by the EIA, the IEA, and most researchers.

Industry is based on the use of fossil fuels. Electricity also plays a role, but it is more like the icing on the cake than the basis of industrial production. Industry is polluting in many ways, so it was an “easy sell” to move industry offshore. But now the United States is realizing that it needs to re-industrialize. At the same time, we are being told about the need to transition the entire economy to electricity to prevent climate change.

In this post, I will try to explain the situation–how fossil fuel prices have spiked many times, including 1973-1974 (oil) and more recently (coal in 2022). I will also discuss the key role fossil fuels play. Because of the key role of fossil fuels, a reduction in per-capita fossil fuel consumption likely leads to a transition to fewer goods and services, on average, per person. A transition to all electricity does not seem to be feasible. Instead, we seem to be headed for increased geopolitical conflict and the possibility of a financial crash seems greater.

[1] When fossil fuel supplies become constrained, prices tend to spike to high levels, and then fall back again.

Economists and energy analysts have tended to assume that fossil fuel prices would rise to very high levels, allowing extraction of huge amounts of difficult-to-extract fossil fuels. For example, the International Energy Agency (IEA) in the past has shown forecasts of future oil production assuming that inflation-adjusted oil prices will rise to $300 per barrel.

Instead of rising to a very high level, fossil fuel prices tend to spike because there is a two-way contest between the price the consumers can afford and the price the sellers need to keep reinvesting in new fields to keep fossil fuel supplies increasing. Prices oscillate back and forth, with neither buyers nor sellers finding themselves very happy with the situation. The current price of the benchmark, Brent oil, is $81.

[2] Historical data shows spiking oil and coal prices.

Figure 2. World oil prices, adjusted to the US 2022 price level, based on data of the 2023 Statistical Review of World Energy, prepared by the Energy Institute.

When world oil prices started to spike in the 1973-1974 period, the US started to move its industrial production offshore (Figure 1). The very low inflation-adjusted prices that prevailed up until 1972 no longer held. Manufacturing costs climbed higher. Consumers wanted smaller, more fuel-efficient vehicles, and such cars were already being manufactured both in Europe and in Japan. Importing these cars made sense.

More recently, coal prices have begun to spike. Coal prices vary by location, but the general patterns are similar for the types of coal shown.

Figure 3. Coal prices per ton, at a few sample locations, based on data shown in the 2023 Statistical Review of World Energy prepared by the Energy Institute. Prices have not been adjusted for inflation.

Before China joined the World Trade Organization (WTO) in 2001, coal prices tended to be below $50 per ton (figure 3). At that price, coal was a very inexpensive fuel for making steel and concrete, and for many other industrial uses.

Figure 4. World coal consumption per capita, based on data of the 2023 Statistical Review of World Energy prepared by the Energy Institute, except for 2023, which is based on an estimate by the IEA.

After China joined the WTO, China’s coal consumption soared (Figure 4), allowing it to industrialize. Figure 3 shows that the extra demand initially pushed coal prices up a little. By 2022, coal prices had soared. At present, coal prices are part-way back down, perhaps partly because higher interest rates are dampening world demand for coal.

Natural gas prices also soared in 2022, at the same time as coal prices. Both coal and natural gas are fuels that are burned to produce electricity. When the coal supply is constrained, utilities will try to purchase more electricity produced by burning natural gas. However, it is difficult to store much natural gas for future use. Thus, a shortage of internationally traded coal can simultaneously lead to a shortage of internationally traded natural gas.

Having oil, coal, and natural gas prices spiking at the same time leads to inflation and to many unhappy citizens.

[3] The 1997 Kyoto Protocol encouraged the trend toward moving industry to lower-cost countries.

In Figure 1, I show a dotted line at 1997. At that time, an international treaty stating that the participating countries would limit their own CO2 emissions attracted a lot of attention. An easy way to limit CO2 emissions was by moving industry overseas. Even though the US did not sign the treaty until later, the treaty gave the US a reason to move industry overseas. We can see from Figure 1 that US industrialization, as measured by the energy per capita required to industrialize, began to fall even more rapidly after 1997.

[4] There were many reasons besides the Kyoto Protocol why Advanced Economies would want to move industry overseas.

There were many reasons to move industry overseas besides spiking oil prices and concern over CO2 levels. With such a change, customers in the US (and European countries making a similar change) gained access to lower-cost goods and services. With the money the customers could save, they were able to buy more discretionary goods and services, which helped to ramp up local economies.

Also, industry tends to be polluting. Smog tends to be problem if coal is burned, or if diesel with high sulfur content is burned. Mining tends to produce a lot of toxic waste. Moving this pollution offshore to poorer countries would solve the pollution problem without the high cost of attempting to capture this pollution and properly store it.

Furthermore, business-owners in the United States could sense the opportunity to grow to be truly international in size if they moved much of their industry overseas.

[5] All the globalization and moving of industry overseas had a downside: more wage and wealth disparity.

In a matter of a few years, the economy changed to provide fewer high-paying factory jobs in the United States. Increasingly, those without advanced education found it difficult to provide an adequate living for their families. The high incomes were disproportionately going to highly educated workers and the owners of capital goods (Figure 5).

Figure 5. U. S. Income Shares of Top 1% and Top 0.1%, Wikipedia exhibit by Piketty and Saez.

[6] Part of what caused the growing wage and wealth disparities in Figure 5 was the growing industrialization of China (Figure 6).

China, with its growing industrialization, could outcompete whole industries, such as furniture-making and garment-making, leaving US workers to find lower-paid jobs in the service sector. Similar outcomes unfolded in the EU and Japan, as industrialization started moving to different parts of the world.

Figure 6. Industrial production in 2015 US$, for the United States, the EU, Japan, and China, based on World Bank Industrial Production (including construction) data. These amounts are not per capita.

[7] The indirect impact of the Kyoto Protocol was to move CO2 emissions slightly away from the Advanced Nations. Overall, CO2 emissions rose.

Figure 7. Carbon dioxide emissions from energy utilization, based on data of the 2023 Statistical Review of World Energy, prepared by the Energy Institute. These amounts are not per capita.

Anyone who expected that the 1997 Kyoto Protocol would reduce world CO2 emissions would have been disappointed.

[8] The direct use of fossil fuels plays a far more important role in the economy than we have ever been taught.

Thanks to the direct use of fossil fuels, the world can have paved roads, bridges made of steel, and electricity transmission lines. It can have concrete. It can have pharmaceutical products, herbicides, and insecticides. Many of these benefits come from the chemical properties of fossil fuels. Electricity, by itself, could never provide these products since it has been stripped of the chemical benefits of fossil fuels. Electricity is also difficult to store.

With the benefit of fossil fuels, the world can also have high-quality steel, with precisely the composition desired by those making it. With only electricity, it is possible to use electric arc furnaces to recycle used steel, but such steel is limited both in quantity and quality. US production of steel amounts to 5% of world supply (primarily using electric arc furnaces), while China’s production (mostly using coal) amounts to 50% of world supply.

I highly recommend reading the article, Trapped in the Iron Age, by Kris De Decker. He explains that the world uses an enormous amount of steel, but most of it is hidden in places we can’t see. Today, with the US’s limited steel-making capability, the US needs to import most of its steel, including steel pipes from China to drill its oil wells. We cannot see how dependent we have become on other countries for our basic steel needs.

China and India have both based their recent growth primarily on rising coal consumption. This is what has kept world CO2 emissions high. The US is now exporting coal to these countries.

[9] Citizens of Advanced Economies are easily confused about the importance of fossil fuel use because they have never been taught about the subject and because their worldview is distorted by the narrow view they see from within their homes and offices.

Figure 8. Electricity consumption as a percentage of total energy consumption by US sector, based on the data of the US EIA. Amounts are through 2023.

Figure 8 shows that the sector with the highest share of electricity use is the commercial sector. This includes uses such as stores, offices, and hospitals. The most visible energy use is lighting and operating computers, which gives the perception that electricity is the greatest energy use. But these businesses also need to be heated, and heat is often produced by burning natural gas directly. Businesses also need back-up for their electrical systems. Such back-up is typically provided by diesel-powered generators.

Residential usage is similar. It is easy to see the use of electricity, but heat is generally needed during winter. This is often provided by natural gas or propane. Natural gas is also often used in hot water heaters, stoves, and clothes dryers. Occasionally, wood is used to heat homes; this would go into the non-electricity portion, as well.

The thing that most people do not realize is that industrial use and transportation use are extremely large sectors of the economy (Figure 9), and these sectors are very low consumers of electricity (Figure 8). Also, if the US and Europe were to re-industrialize to produce more of our manufactured goods, our industrial sectors would need to be much larger than they are today.

Figure 9. US Energy Consumption per capita by sector based on data of the US EIA. Amounts are through 2023.

In recent years, electrical consumption as a percentage of total energy consumption for the industrial sector has averaged about 13% of the total (Figure 9). Industries typically need high heat levels; such heat can usually be achieved at lowest cost by burning fossil fuels directly. Wikipedia claims, “Electric arc steelmaking is only economical where there is plentiful, reliable electricity, with a well-developed electrical grid.” An electric grid, powered only by intermittent electricity from wind turbines and solar panels, would not qualify.

In Figure 8, electricity consumption as a percentage of total energy consumption for the US transportation sector rounds to 0%, for every year. Even the amount of biomass (ethanol and biodiesel) used by the transportation sector doesn’t have much of an impact, as shown in Figure 10.

Figure 10. US transportation energy by type through 2023, based on data of the US EIA. Biomass includes ethanol and any biofuels made to substitute for diesel.

A major issue is that transportation is a broad sector, including trucks, trains, planes, and boats, in addition to private passenger autos. Also, I expect that the only electricity that would be considered in the transportation energy calculation would be electricity purchased from an away-from-home charging facility. Electricity used when charging at home would likely be part of residential electricity consumption.

[9] The narrative saying that we can transition to an electricity-only economy, powered by intermittent wind and solar electricity, has major holes in it.

One major issue is that the pricing of wind and solar tends to drive out other electricity providers, particularly nuclear. Intermittent wind and solar are given “priority” when they are available. This leads to very low or negative prices for other electricity providers. Nuclear is particularly affected because it cannot ramp up and down, in response to prices that are far below its cost of production.

Nuclear is a far more stable source of electricity than either wind or solar, and it is also a low-carbon source. As a result, economies end up worse off, in terms of electricity supply per capita, and in stability of available supply, when wind and solar are added.

Figure 11. US per capita electricity generation based on data of the US Energy Information Administration. (Amounts are through 2023.)

Figure 12. Electricity generation per capita for the European Union based on data of the 2023 Statistical Review of World Energy, prepared by the Energy Institute. Amounts are through 2022.

Another issue is that wind turbines and solar panels are made with fossil fuels and repaired using fossil fuels. Without fossil fuels, we cannot maintain electricity transmission lines and roads. Thus, wind turbines and solar panels are as much a part of the fossil fuel system as hydroelectric electricity and electricity made from coal or natural gas.

Also, as discussed above, only a small share of the economy is today operated using electricity. The IEA says that 20% of 2023 world energy supply comes from electricity. The amounts I calculated as “Overall” in Figure 8 indicate an electricity share of 18%, which is a bit less than the IEA is indicating for the world. Figure 8 shows an early upward trend in this ratio, but no upward trend since 2012. Fossil fuels are being used today because they have chemical characteristics that are needed or because they provide the energy services required in a less expensive manner than electricity.

Even in the early days of the Industrial Revolution, wind and waterpower provided only a small portion of the total energy supply. Coal provided the heat energy that both industry and residences needed, inexpensively. Wind and waterpower were not well adapted to providing heat energy when needed.

Figure 13. Annual energy consumption per head (megajoules) in England and Wales 1561-70 to 1850-9 and in Italy 1861-70. Figure by Wrigley, in Energy and the English Industrial Revolution.

If we are short of inexpensive-to-extract fossil fuels, relative to today’s large population, we certainly could use some new inexpensive source of stable electricity supply. But this would not solve all our energy problems–we would still need a substantial amount of fossil fuel supplies to grow our food and keep our roads repaired. But if a new type of electricity production could reduce the demand for fossil fuels, it would make a larger quantity of fossil fuels available for other purposes.

[10] Practically everyone would like a happily-ever-after ending, so it is easy for politicians, educators, and the news media to put together overly optimistic versions of the future.

The narrative that CO2 is the world’s biggest enemy, so we need to move quickly away from fossil fuels, has received a great deal of publicity recently, but it is problematic from two different points of view:

(a) The feasibility of moving away from fossil fuels without killing off a very major portion of the world’s population seems to be virtually zero. The world economy is a dissipative structure in physics terms. It needs energy of the right kinds to “dissipate,” just as humans are dissipative structures and need food to dissipate (digest). Humans cannot live on lettuce alone, or practically any other foodstuff by itself. We need a “portfolio” of foods, adapted to our bodies’ needs. The economy is similar. It cannot operate only on electricity, any more than humans can live only on high-priced icing for cakes.

(b) The narrative about the importance of CO2 emissions with respect to climate change is quite possibly exaggerated. There are many other things that would seem to be at least as likely to cause short-term shifts in temperatures:

• Lack of global dimming caused by less coal dust and reduced sulfur compounds in the atmosphere; in other words, reducing smog tends to raise temperatures.
• Small changes in the Earth’s orbit
• Changes in solar activity
• Changes related to volcanic eruptions
• Changes related to shifts in the magnetic north and south poles

Politicians, educators, and the news media would all like a narrative that can explain the need for moving away from fossil fuels, rather than admit that “our easy to extract fossil fuel supply is running out.” The climate change narrative has been an easy approach to highlight, since clearly the climate is changing. It also provides the view that somehow we will be able to fix the problem if we take it seriously enough.

[11] Today, we are in a period of conflict among nations, indirectly related to not having access to enough fossil fuels for a world population of 8 billion. There is also a significant chance of financial collapse.

In my opinion, today’s world is a little like the “Roaring 20s” that came shortly before a major stock market crash in 1929 and the Great Depression of the 1930s. After the Great Depression, the world entered World War II. There is huge wage and wealth disparity; energy supplies per capita are stretched.

Today, NATO and Russia are fighting a proxy war in Ukraine. Russia is a major fossil fuel producer; it would like to be paid more for the energy products it sells. Russia could perhaps get better prices by selling oil and other energy products to Asian customers instead of its current customer mix. At the same time, the US claims primary leadership (hegemony) in the world but, in fact, it needs to import many goods from overseas. It even needs supply lines from around the world for weapons being sent to Ukraine. The Ukraine conflict is not going well for the US.

I do not know how this will work out. I am hoping that there will not be a World War III, in the same way that there was a World War II. All countries are terribly dependent on each other, even though there are not enough fossil fuels to go around. Perhaps countries will try to sabotage one another, using modern techniques, such as cyber warfare.

I think that there is a substantial chance of a major financial collapse in the next few years. The level of debt is very high now. A major recession, with lots of collapsing debt, seems to be a strong possibility.

[12] A presentation I recently gave to a group of actuaries that touches on several of these issues, plus others.

My presentation can be found at this link: Beware: The Economy Is Beginning to Shrink

By Gail Tverberg via Our Finite World

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• Sam Altman-Backed Nuclear Startup Signs Major Data Center Contract
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• By ZeroHedge - May 27, 2024
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• Oklo has signed a non-binding letter of intent with Wyoming Hyperscale for a 10-year power purchase agreement.
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• Oklo is committed to providing clean, reliable, and affordable energy solutions to meet the needs of data centers.
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• The partnership with Wyoming Hyperscale underscores Oklo's commitment to advancing sustainable energy practices in the data center industry.

Sam Altman backed nuclear startup Oklo inked a deal to supply 100MW of nuclear power to data center company Wyoming Hyperscale, it was announced last week.

The news sent shares of NYSE-listed Oklo up more than 30% in trading on Friday. 

The companies signed a "non-binding letter of intent outlining plans for the PPA, which will last for 10 years," according to industry publication Data Center Dynamics. This comes on top of the revelation that, last month, Oklo signed to supply up to 500MW of power to another data center, Equinix. 

"Wyoming Hyperscale is building a data center campus on 58 acres of land," the report says. 

Jacob DeWitte, co-founder and CEO of Oklo, commented: “As the widespread adoption of artificial intelligence increases, Oklo remains dedicated to providing clean, reliable, and affordable energy solutions to meet the needs of our data center partners.”

“Our partnership with Wyoming Hyperscale underscores our commitment to advancing sustainable energy practices and supporting high-efficiency operations within the data center industry.”

Trenton Thornock, founder of Wyoming Hyperscale, added: "Our goal is to create data centers with minimal environmental impact. This collaboration with Oklo perfectly aligns with our vision for sustainable, efficient operations. By merging sustainability with advanced technology, we are setting a new standard for the future of accelerated computing.”

As we wrote earlier this month, Oklo won shareholder approval on May 8 for its NYSE listing. The company's mission is "to provide clean, reliable, affordable energy on a global scale through the design and deployment of next-generation fast reactor technology".

Backed by investors like Jeff Bezos, Bill Gates, and Peter Thiel, the who's who of the AI revolution, nuclear fusion startups are gaining traction. Sam Altman, who invested in Oklo in 2015, believes the company is "best positioned to commercialize advanced fission energy solutions," per a July press release.

Last month, we published a lengthy report discussing why even as the AI trade may be fizzling, the "electrification" trade, aka the "Power-Up America" trade - so urgently needed to run all those electricity-gobbling data centers needed to run AI - is just getting started and has in fact outperformed substantially both the broader AI and Data-Center Equipment baskets over the past two months...

... and Altman - who teamed up with another power company, Exowatt, earlier this year to focus on clean energy for AI power -agrees: "Fundamentally today in the world, the two limiting commodities you see everywhere are intelligence, which we're trying to work on with AI, and energy," Altman told CNBC in 2021. 

For those who missed it, in "The Next AI Trade," we outlined various investment opportunities for powering up America, most of which have dramatically outperformed the market. In the next iteration, we will likely add Oklo to the list of beneficiaries certainly ahead of the inevitable cascade of Buy ratings sure flood the name over the next month.

By Zerohedge.com 

Q&A: The prospects for floating nuclear power plants

24 May 2024

Deputy General Director for Shipbuilding, Floating Energy and Marine Engineering at Rosatom's Atomenergomash, Vladimir Aptekarev, on the potential for floating power units.

How a 100 MW FPU might look (Image: Rosatom)

There seem to be a lot of proposals for, and interest in, floating nuclear power plants around the world. To be clear, these are not the same as nuclear-powered vessels, are they?

I would suggest using the term floating power unit (FPU) instead of floating nuclear power plant, to be more precise. While FPUs and nuclear-powered vessels both utilise nuclear reactors, they differ in purpose. Nuclear-powered vessels are designed for various maritime transportation tasks, whereas FPUs are non-self-propelled vessels specifically engineered to generate and supply electricity to customers. For FPU operation, coastal infrastructure is required to ensure mooring and electricity transmission onshore.

Do the reactors have to be specifically designed for a floating power unit, or are they essentially slightly adapted versions of land-based SMRs?

Based on the RITM-200 reactors, which are currently operational in new Project 22220 nuclear icebreakers, FPUs with power capacities of 100 MW and 106 MW have been designed. Developed by OKBM Afrikantov, the RITM series represents a unique advancement in reactor technology. The RITM-200 technology, developed by Russia, is a flagship small modular reactor (SMR) technology based on the evolution of Soviet pressurised water reactor technology initially tailored for icebreaker vessels. Through innovative technological advancements, their efficiency and reliability have been significantly improved. RITM reactors are versatile and can be utilised across three main domains: marine transportation, including nuclear icebreakers and nuclear-propelled cargo vessels; small-scale land-based nuclear power plants; and floating nuclear power units.

What do you think will be the key uses for floating nuclear power units?

Floating power units are specifically engineered for deployment in remote or inaccessible regions where establishing conventional power infrastructure proves impractical or costly. By supplying electricity to onshore communities or industrial facilities, FPUs offer advantages such as mobility, scalability, and reduced environmental impact compared with conventional fossil fuel-based power plants. They are increasingly recognised as a promising solution for advancing global nuclear energy. This recognition stems partly from the growing demand for sustainable power sources in remote areas and regions lacking extensive grid infrastructure. FPUs boast several advantages over alternative power generation sources. Not only are they environmentally-friendly and relatively easy to install at deployment sites, but they also address tariff concerns by ensuring stable electricity prices over extended periods. Additionally, they can facilitate heat supply to various facilities. An illustrative example of FPU deployment is the forthcoming installation of four RITM-200 floating power units at the Baimskiy Mining and Processing Plant in Chukotka. Rosatom plans to construct more than a dozen FPUs, offering ‘turnkey’ power supply solutions to coastal regions in countries across Africa, South Asia, and Latin America. These solutions, based on a build-own-operate scheme, provide stable electricity without requiring countries to invest in their own nuclear infrastructure or assume ownership of the units.

What are the safety considerations and safety benefits, compared with land-based plants, and how do you think the regulatory process will work around the world?

The safety concept of the RITM-200 reactor units is grounded in the principle of deep-layered protection, coupled with inherent safety features employing passive and active systems. These reactor units optimally integrate passive and active safety systems to ensure normal operation and stability, drawing from the operational experience of nuclear icebreakers equipped with RITM-200 reactor installations. In contrast to land-based nuclear power plants, the operation of FPUs adheres to the "green field" principle, meaning there are no activities involving nuclear fuel handling at the operational site. All fuel-related operations, including the handling of both fresh and used fuel, occur exclusively at specialised facilities within the Russian Federation. FPUs are non-self-propelled vessels housing nuclear power installations. Their design and construction comply with Russian regulations and internationally recognised maritime norms, notably the SOLAS Convention. Commissioning occurs within the territory of the Russian Federation, with licensing overseen by Rostekhnadzor and the Russian Maritime Register of Shipping, drawing from the experiences of projects like the Akademik Lomonosov. A specific regulatory and legal framework for FPUs exists solely within the Russian Federation. The host country’s government decides on FPU placement based on authorisation documents from its nuclear regulatory authority or another relevant body. There are no prohibitions on FPU operation, even abroad. However, effective FPU project implementation necessitates the adaptation of Russian project experience and collaboration among regulators across different countries.

What about the costs - will floating nuclear power plants be cheaper than land-based ones?

At the present moment, land-based nuclear power plants and floating power units represent two separate businesses. We do not sell floating power units; instead, we sell electricity generated by them. As a result of technical and economic feasibility studies, scientific research, and extensive market research in foreign countries, we have managed to adopt an extremely economically efficient and, at the same time, highly convenient principle of operation for our clients. This involves supplying electricity based on Power Purchase Agreements (PPAs) with highly predictable costs, extending up to 60 years, depending on the preferences and capabilities of the customer, without being tied to the cost or dependency on hydrocarbons. However, electricity supply is not interrupted for the entire duration of the contract, up to 60 years, which is the maximum projected operational lifespan of the floating power unit. This is achieved through the use of the RITM-200M, optimisation of the fuel cycle, with a refueling interval of 7-10 years, and the presence of a spare floating power unit in the operational "energy fleet" during the refueling and planned maintenance period when the installed power unit is sent to a specialised base in the Russian Federation. Seven power units operating worldwide, regardless of the country, can be substituted by just one floating power unit. Such a model is not only economically efficient but also eliminates the need for handling nuclear fuel in the host country of the floating power unit, following the "green field" principle. Additionally, it obviates the need for the foreign partner to create expensive infrastructure.

What sort of global demand do you think there will be in the coming years?

The demand and interest in floating power units have been increasing due to the global energy deficit. Floating power units undoubtedly possess significant commercial potential not only in Russia but also internationally, with countries in the Middle East, Southeast Asia, Africa, and Latin America already expressing interest in them.  The potential international market for electricity abroad for the FPU project is currently estimated at more than 2.8 GW.

What plans does Russia have for floating nuclear power plants – what are your designs and what is the state of current projects?

The floating nuclear power plant Akademik Lomonosov has been commissioned marking a significant milestone. A project for supplying power to the Baimskiy Mining and Processing Plant is being implemented. Under a contract signed in 2021, the Machine Engineering Division of the State Atomic Energy Corporation Rosatom will supply four FPUs, each with a capacity of up to 106 MW of electric power, for the project. Of these, three FPUs will be primary units, while the fourth will serve as a backup. The project for supplying power to the Baimskiy Mining and Processing Plant will be the first "serial" reference for floating power units and the world’s first experience in electrification using a floating power unit for mineral extraction projects. In 2023, technical design work commenced for 100 MW FPUs based on the RITM-200M reactor units, developed for export with enhanced technical and economic performance suited for relatively warm climates. Currently, negotiations are in progress with several countries across different regions of the world, with some negotiations already resulting in signed agreements.

Vulcan rejects Mexico’s ‘illegal expropriation’ of its investments

Reuters | May 27, 2024 | 

Vulcan Materials’ Columbus quarry. Credit: YouTube

U.S. construction company Vulcan Materials (NYSE: VMC), opens new tab on Monday rejected what it considers the “illegal expropriation” of its investments in Mexico and said it remains open to a negotiated solution with the Mexican government.


The company has been engaged in a years-long conflict with Mexico’s government after officials ordered a halt to limestone quarrying at Vulcan’s mining unit in the coastal state of Quintana Roo in 2022, alleging environmental damages by the company, which denies the accusations.


Mexican President Andres Manuel Lopez Obrador last week said that the site had not been expropriated, only closed, and that it would remain closed at least until he leaves office in October.

In a statement on Monday, Vulcan described the suspension of their operations as “authoritarian” and said it could not produce or sell materials “due to the arbitrary actions of the government of Mexico in order to force us to give up our important investments in the region.”

Last year, Lopez Obrador laid out plans to offer 6.5 billion Mexican pesos ($391 million) to buy the land where Vulcan Materials operates and solve the dispute, but said the company did not want to sell the land.

“The truth is that at no time have we received a ‘generous offer’ to buy our property,” Vulcan said on Monday.

“We were given an informal appraisal, without signatures and without details, that substantially undervalues our assets, including the limestone reserves of which we own under Mexican law, as well as the only deep draft port in the region.”

($1 = 16.6440 Mexican pesos)

(Reporting by Kylie Madry and Raul Cortes Fernandez; Writing by Brendan O’Boyle; Editing by Sarah Morland)