The Potential Impact of Molten Salt Reactors on the UK Electricity Grid
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The Potential Impact of Molten Salt Reactors on the UK Electricity Grid Charles Denbowa,b, Niccolo` Le Bruna, Niall Mac Dowella, Nilay Shaha, Christos N. Markidesa aDepartment of Chemical Engineering, Imperial College London, South Kensington Campus, London, SW7 2AZ bDepartment of Materials, Imperial College London, South Kensington Campus, London, SW7 2AZ Abstract The UK electricity grid is expected to supply a growing electricity demand and also to cope with electricity generation variability as the country pursues a low-carbon future. Molten Salt Reactors (MSRs) could offer a solution to meet this demand thanks to their estimated low capital costs, low operational risk, and promise of reliably dispatchable low-carbon electricity. In the published literature, there is little emphasis placed on estimating or modelling the future impact of MSRs on electricity grids. Previous modelling efforts were limited to quantifying the value of renewable energy sources, energy storage and carbon capture technologies. To date, no study has assessed or modelled MSRs as a competing power generation source for meeting decarbonization targets. Given this gap, the main objective of this paper is to explore the cost benefits for policy makers, consumers and investors when MSRs are deployed between 2020 and 2050 for electricity generation in the UK. This paper presents results from electricity systems optimization (ESO) modelling of the costs associated with the deployment of 1350 MWe MSRs, from 2025 onwards to 2050, and compares this against a UK grid with no MSR deployment. Results illustrate a minimum economic benefit of £1.25 billion for every reactor installed over this time period. Additionally, an investment benefit occurs for a fleet of these reactors which have a combined net present value (NPV) of £22 billion in 2050 with a payback period of 23 years if electricity is sold competitively to consumers at a price of £60/MWh. Keywords: Energy system modelling, Nuclear energy, Power generation, Molten salt reactor Nomenclature CCS - Carbon Capture and Storage CfD - Contract for Difference ESO - Electricity systems optimization Gen-III+ - Generation three plus Gen-IV - Generation four GIF - Gen-IV International Forum GW - Gigawatts IMSR - Integrated Molten Salt Reactor LCOE - Levelized Cost of Electricity MSR - Molten salt reactor MSRE - Molten Salt Reactor Experiment MWe - Megawatts equivalent NPV - Net Present Value ORNL - OakRidge National Laboratory PV - Photo-voltaic RE - Renewable Energy R&D - Research and Development SSR - Stable Salt Reactor UK - United Kingdom USDOE - United States Department of Energy 232Th - Thorium 232 radioisotope 233U - Uranium 233 radioisotope Preprint submitted to Journal of Cleaner Production May 4, 2020 1. Introduction The UK electricity grid supply is predicted to exhibit growth in response to an increasing electricity demand from home heating electrification and zero emissions vehicles (Department of Energy and Climate Change, 2010). According to Gross and Heptonstall(2008), the grid will have to be resilient to the intermittency of low carbon power sources as the country proceeds to meet its future environmental commitments. As a result, the UK Parliament(2014c) has legislated to align with this forecast, by attempting to incentivize renewable energy (RE) deployment for sustained power sector decarbonization while creating a space for more reliable and reasonably priced power for consumers (UK Parliament, 2014a,b). The identification of the best remaining low carbon technology mixture, amidst the growing penetration of non-dispatchable RE is, however, still being debated. Attempts to rapidly deploy technologies such as Carbon Capture and Storage (CCS) and Gen-III+ nuclear power plants have been scrutinized on cost by both the House of Commons(2017) and academics (Portugal-Pereira et al., 2018) respectively. This has lead to these technologically specific projects being plagued by investment uncertainty, questioning their cost-competitiveness within a liberalized electricity marketplace locally (National Audit Office, 2017) and globally (MIT Energy Initiative, 2018). A suggested technological solution to this energy trilemma (security, cost and sustainability) could be to commercialize and deploy Gen-IV nuclear reactor systems, specifically MSRs. By utilizing a molten salt as a heat transfer fluid, MSRs operate at near-ambient pressure and, by reducing the cost of piping and equipment, have a lower estimated capital costs. The lower pressure, in addition with other key technological aspect, such as the ability to dissolve the fuel directly into the heat transfer fluid, makes the reactor intrinsically safer and reduce the operational risk Zheng et al.(2018). Other technological aspects of MSRs also allows for a reliable and flexible low-carbon electricity supply (Richards et al., 2017). Evidence of a renewed interest in this 1960s technology (Rosenthal et al., 1970) has been recently observed based on the spike of new global MSR start-ups within a short time span. The focus of these companies has mainly been on refining elements of early reactor development in the UK (Griffiths et al., 2015), with additional focus to address regulatory concerns and attract public-private investment for their designs (Energy Options Network, 2017). However, little emphasis has been placed on estimating the future impact of these MSR designs on electricity grids. Additionally, prototype reactor size selection criterion has been more aligned with the capabilities of future demonstration plants and less aligned with the potential return on investment achievable within the electricity market. One way to estimate this impact and determine the most promising reactor size is through ESO modelling according to Pfen- ninger et al.(2014). While most model applications have looked at quantifying the value of RE generation, energy storage and carbon capture technology on the future grid, no model application to date has been done using MSRs as a power generation source. This modelling gap application can be filled by exploring the impact of a deployment of this new nuclear technology on the grid thereby adding to the debate as to whether MSRs can be a suitable value proposition for the UK electricity grid. An understanding of the ongoing UK energy debate and resulting government policy is fundamental in estimating accurately the future requirements from the grid. Firstly, for energy policy-makers it will be useful to illustrate the potential and limitations of deployment of MSR nuclear technology alongside other competing low-carbon technology. Determination of whether MSRs are inclusive in the least cost option can guide policy around the minimum investments needed for MSR technology for capacity expansion planning. Secondly, for MSR start-ups it could identify the reactor size with the highest probability of success in the UK electricity market, potentially helping to reduce engineering costs by aligning demonstration and commercial reactor design sizes. Lastly, for private investors it can reveal the potential viability of this technology for power production and help to balance the investment risk/reward around new nuclear power generation. 2. The UK energy debate An understanding of the ongoing UK energy debate and resulting government policy is fundamental in estimating accurately the future requirements from the grid. Current UK energy policy centres around curbing emissions (Department of Business Energy & Industrial Strategy, 2018) and assuring energy security (Department of Trade and Industry, 2007) by strategically reducing domestic Greenhouse Gas emissions by 80% from 1990 levels by 2050 (UK Parliament, 2008). Their energy debate has evolved to focus on how these objectives can reasonably be achieved within the various sectors of its economy. One sector deemed critical to securing a low-carbon energy future is the power generation sector. 2.1. Power generation sector Determining the cost-effective low-carbon electricity supply mixture for existing and future electricity demand remains an open question (Spataru et al., 2015). The UK government, alongside numerous academic institutions, has attempted to explore the impact of power generation from several technologies through modelling several sustainable energy scenarios from the late 2000s (MacKay, 2009) up to recently (Markides, 2013). Across the breadth of scenarios modelled several shared insights have been identified. The first insight highlights the need for the UK’s electricity supply to be decarbonized as its capacity may double (Department of Energy and Climate Change, 2011). This growth in capacity directly relates to an anticipated future demand 2 from electrified road transport, residential/commercial heating and industry (Odenberger and Johnsson, 2007). The second insight observed was the increased challenge of balancing the electricity grid due to the variability in output from increased RE deployment (Barton et al., 2017; Gross and Heptonstall, 2008). That challenge is expected to grow more complex unless ambitious societal and technological energy efficiency is implemented to flatten daily 24-hr demand according to Odenberger and Johnsson(2007) and the Department of Trade and Industry(2003). In summary, there is an expectation that the current electricity supply is on track to firstly grow to match the increasing demand and secondly, become more variable as the country pursues a low carbon future. 2.2. Government strategy As a part of pre-emptive climate action, the UK Parliament(2015)