Ep 168: Dr. Bob Ichord - Nonresident Senior Fellow, Global Energy Center, Atlantic Council
Q1 - Entrance into the Energy Sector
Naomi Senehi: Are you from DC originally?
Bob Ichord: Bob Ichord is from the New York area, but his family comes from Missouri. Ichord worked in the energy sector during his graduate program at a time leading up to the oil embargo. Originally, Ichord became interested in the energy sector due to the international aspect, but was also influenced by his father, a lawyer in the oil and chemical industries. Both oil and natural gas are still significant to the U.S. and world economies. When Ichord joined the Energy Research and Development Administration (ERDA) in 1976, the programs in research, development, and commercialization of renewable energy were just beginning. In 1977, the Federal Energy Administration and ERDA joined together to create the Department of Energy. Ichord attended the Fletcher School of Law and Diplomacy at Tufts University with a focus on International Development and also had a fellowship at the East-West Center at the University of Hawaii, which involved a full year of research on energy issues in Southeast Asia. Bob Ichord spent most of his career managing energy projects across the globe and received an opportunity to be a deputy security for the new energy bureau in 2011.
Q2 - USAID Brings Energy to Global Communities
Naomi Senehi: What work did you do at USAID?
Bob Ichord: USAID is the U.S. prime development assistance agency with a focus on both economic and social development. Energy, both electric power and oil, was very important to the efforts of trying to develop viable economics in the countries of focus. Some countries were experiencing rapid growth and urbanization, creating large demands for electricity, and access to power was an issue, so rural electrification was also a significant focus. After the fall of the Berlin Wall, Ichord transitioned from Southeast Asia to the Eastern European region and focused on transforming centrally-planned, former communist countries into market-oriented democracies. Due to the pollution and extensive use of coal in the region, environmental issues were also a focus in this area. Some U.S. utilities and regulators partnered with local utilities, through USAID, to provide a channel for international education about energy efficiency. Many of these countries had old Russian-designed nuclear reactors and G7 worked to close many of these early generation, high risk reactors. These reactors had no containment, poor instrumentation, control systems, and piping and did not meet regulations in the U.S. or in Europe.
Q3 - Nuclear Reform Following Chernobyl
Naomi Senehi: Did you do any work on Chernobyl?
Bob Ichord: Bob Ichord was the State Department Coordinator for Nuclear Safety during the process of dealing with Chernobyl, working alongside the Department of Energy and the Nuclear Regulatory Commission. The G7 Chernobyl agreement in 1996 with Ukraine provided for closure of remaining 3 reactors and led to establishment of a multilateral fund at the EBRD that provided funding for a safe containment structure over the destroyed reactor #4. The US made major contributions to the fund whose ultimate cost was somewhere around $2 billion. Part of the process and agreement related to broader reforms and efforts to promote the safety of the nuclear reactors that continued to operate. The Chernobyl event became very personal to Bob Ichord as he visited the impacted community and met the people who lived there. Overall, most of the reactors operated pretty well. Canada provided some CANDU heavy water reactors to Romania to build a large nuclear complex; two have been built, with two more being discussed with China. China has made a major commitment as part of an overall program to shift its energy mix to renewables, gas, and nuclear from being so heavily dependent on coal. Right now, Russia has the most foreign nuclear presence in exporting and building reactors outside of Russia, especially in Eastern Europe but also the Middle East and South Asia.
Q4 - International Market for Nuclear Energy
Naomi Senehi: What is the U.S. relationship in terms of exporting nuclear to other countries compared to Russia?
Bob Ichord: U.S. based Westinghouse recently completed four AP-1000 reactor builds in China which were connected to the grid in 2018. India has the third largest electricity system in the world, after the U.S. and China, and is growing rapidly. India wants to reduce coal use and diversify their energy mix, and they are currently very dependent on imported oil and gas. India has a rapidly growing electricity demand and millions of people who do not have access to electricity. However, local opposition to nuclear power has slowed down some of the projects, oftentimes due to concerns about land or water. China is building a lot of reactors domestically and from different sources, developed their own indigenous reactor design, based on existing technology, and are trying to market it in places such as Pakistan and Argentina. China has been involved in financing a plant with the Europeans in the United Kingdom, whose concerns focus on dependence on imports, but especially climate.
Q5 - International Nuclear Competition
Naomi Senehi: Why does each country want to develop their own nuclear as competition with other countries?
Bob Ichord: Both Russia and China are a big challenge to Western nuclear vendors, such as the U.S., Canada, Japan, and South Korea. South Korea has collaborated with U.S. suppliers to build nuclear reactors in the United Arab Emirates. The U.S. has also worked closely with Japan in the nuclear sector. Many countries around the world have tremendous energy demand, but their systems are relatively small and these traditional reactors are too large and not the best technical choice for these areas. Nuclear energy is critical to both national security and global interests, in terms of having a no-carbon option to complement renewables and natural gas. Many of these countries have shifting load patterns with more urbanization and peak load, requiring systems that have adequate load following capabilities. Before deploying advanced reactors, the regulators need to approve designs and there must be a clear path with regards to how the modular manufacturing and the construction techniques will be needed. Since the first units will be more expensive than those that follow, the government can provide help to create an initial market. The proposed Nuclear Energy Leadership Act provides for longer-term government power purchase agreements and support of demonstration projects for advanced reactors and collaboration between private sector and DOE national laboratories. Utilities aren’t willing to jump into nuclear right now unless there are significant advantages, due to the large up front risks and initial investments.
Q6 - Atlantic Council Task Force Report on Nuclear
Naomi Senehi: Tell me about your task force report.
Bob Ichord: The Atlantic Council Task Force Report on U.S. Nuclear Leadership grew out of substantial growing interest from Congress and the Trump Administration. Leaders in industry, non-governmental institutions involved in nuclear, as well as environmental clean energy groups were involved in the task force. Four substantive workshops - on the existing fleet, global markets, innovation, and fuel cycle issues - were hosted with the group and subject matter experts. Most people agreed that stronger action was needed to keep capacities of the existing fleet system. Approximately 5,000 MW of nuclear power has been shut down in recent years, with 11 GW of plants to be shut down by 2025. Natural gas is at its lowest price yet and extensive support programs have allowed renewable energy to develop. These are both factors that may need market restructuring so that the full benefits of nuclear’s reliability, carbon-free energy, and high capacity factors can be better valued in terms of the markets.
Q7 - Nuclear Risk and Investment
Naomi Senehi: Nuclear has a huge risk as added cost in initial investment which isn’t added to natural gas or renewable development. Is there anything to account for that?
Bob Ichord: Nuclear plants are being licensed for 60 years or more. Reactors have a high upfront capital cost, but have reliable 24/7 operation for 60 plus years. An effort is needed to replace some of renewable energy capacity in the future which requires additional capital investment, since they will not last 60 years. Most of the initiatives and credits for nuclear energy are coming from the state level, who have concerns about emissions as well as communities affected by closing plants. An efficient regulatory process is needed to license advanced reactors and the capacity to handle new designs. The Nuclear Energy Innovation and Modernization Act, passed in 2018, had additional funding for the Nuclear Regulatory Commission (NRC) to increase their staff capacities and expertise to handle this influx. Congress had upped the funding for Department of Energy (DOE) for the nuclear programs research, including advanced reactors. A versatile test reactor has been promoted as needed for the U.S. to compete with Russian and Chinese nuclear development. The nuclear industry has some financing problems including with the US Export-Import Bank limited operational capacity since 2015. Both Russia and China have been creating frameworks with other countries as a market development process in preparation for exporting of nuclear technology.
Q8 - Small Modular Reactors in the Global Nuclear Scene
Naomi Senehi: With the inherent fear of nuclear that people have, why don’t other countries look towards the U.S. for nuclear support rather than China and Russia, since the NRC is valued highly?
Bob Ichord: The Nuclear Regulatory Commission (NRC) is seen as superior globally in terms of regulatory capacities and has been instrumental in developing the international regulatory framework. There are implications of how Chinese and Russian dominance of reactor builds in the rest of the world affect U.S. power and influence in international organizations related to the standards. New generations of technologies have different characteristics and a focus on developing safety and security. There will be a recognition of how critical it is for the U.S. to maintain its capacity in nuclear energy, especially as it relates to national security. Both China and South Korea are working on small modular reactors (SMR’s), so the U.S. needs to sustain and increase its effort in technology development to demonstrate the viability of these units in the U.S. and have credibility in the international scene. A domestic example of small modular reactors must be in place before the U.S. can export the technology. The Department of Defense (DOD) has a program looking at microreactor applications and installations. Progress needs to be made towards commercialization, with commercial demonstrations by the mid-2020 period and international demonstrations by 2030.
Q9 - Innovation and Commercialization of SMR’s
Naomi Senehi: What do you hope for the future of nuclear?
Bob Ichord: The geopolitical side of nuclear, as well as the issue of climate change, will drive nuclear in the future. Non-OECD countries (non-members of the Organisation for Economic Co-operation and Development) are projected to account for 90% of future electricity growth. With more urbanization, more electricity is needed. Some countries are moving towards renewables and gas. Breakthroughs in the development of small modular reactors (SMR’s) could be applicable in many different countries, as 70 countries or so have a grid between 1-10 GW, compared to the 30+ countries that have 30 GW grids. If commercially viable SMR’s are available by 2030, there is potential for substantial growth, but the financial, risk, and public acceptance issues must be resolved. The risk of the U.S. not taking an aggressive positions on the issues of innovation and commercialization of these units is very high, because the opportunities are enormous and we will face difficulties if the world is dominated by state-owned companies from China and Russia. Units need to be demonstrated in the U.S. before they are exported. Since climate change affects everyone, a large scale, low carbon, economic energy option is needed to fight global warming and reduce pollution. U.S. funding capacities are significantly less than Chinese funding. From 2000-2018, China financed about $200 billion of energy international, with the support of government financing, state companies, and policy banks. The U.S. needs to get companies willing to take the risk and be willing to deal with the nuclear market in order to develop understanding about what is needed to compete internationally.