Could Nuclear Power be the Key to Mass Electrification? | Utilimarc Fleet FYIs

Gretchen Reese (00:24):

Hey there. Welcome to the Fleet FYIs podcast, the weekly podcast by Utilimarc that reveals how you can make the most of your data for smarter fleet management. My name is Gretchen, and every week you'll hear from me or some of the industry's finest in candid conversations that will not only shed some light on over two decades worth of fleet data insights, but also some of the industry's hottest talking points and key metric analysis with the aim to help you better understand your fleet from every angle.

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But before we begin, if this is the first time you've heard our show, thanks for stopping by. I'm so glad you decided to come along for the ride with us. But I've got a quick favor to ask you. Once you finish today's episode, if you could take a few minutes to leave us a review on your favorite podcasting platform, we would really appreciate it. Give us a rating. Five stars, I hope. Or tell us what you liked or leave us a comment or a question about what you've heard in today's episode. If we haven't yet covered a topic that you're interested in hearing more about, let us know. We would be happy to go over it in detail in a later show.

(01:34):

Hello everyone and welcome back to another episode of the Fleet FYIs podcast. It's so good to be chatting to you all again after what has seemed like the busiest month ever with conferences like GFX and EUFNC being all over my radar, and I'm sure a bunch of yours as well. And for those of you that didn't know, the Utilimarc team was in Williamsburg, Virginia, this last week for the Electric Utility Fleet Managers Conference. And, oh boy, was it a good one.

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Not only was it wonderful to see everyone again, all of our old friends outside of Zoom calls, but it was also so nice to meet everyone that was a new member of this show this year as well. Myself included. This was my first EUFMC, but being able to see a bunch of you guys at different events and being able to reconnect there, it was so nice.

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And if you'd like to hear more about the show, because I'm sure you've probably seen a few bits buzzing around LinkedIn and perhaps a couple other platforms and you might be curious, you'll be able to hear all about it in the next bonus episode of this show, which is super exciting. But aside from that, I have one more quick share for YouTube before I delve into the content of today's episode.

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I've started a LinkedIn newsletter. As much as I love having you all tune into the Fleet FYI's podcast every single week, I know that podcast and audio isn't for everyone. And because of this, the Utilimarc team and I have taken to LinkedIn to bring you a weekly newsletter called This Week in Fleet, Your Exclusive Look Into the Fleet Industry. And this is where we'll be sharing a behind the scenes look at what's going on not only in the industry, but a bit of data tips because you all know that that's what gets our engines revving and just a little bit more.

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So make sure you subscribe because then you'll be one of the first to know about all things Utilimarc and all things on the heartbeat of the fleet industry. Kind of exciting stuff. But anyways, here's what you really turned into this episode to hear about. Nuclear power. As of today, in this moment right now, over 30 countries have pledged to phase out sales of new gas and diesel cars in upcoming decades. Major automakers like Ford and General Motors among others will phase out all ICE vehicle production by 2040, so they say, and especially when it comes to that light duty vehicle range.

(03:42):

Fleets around the world are taking action to cut emissions and meet government mandated sustainability goals. And to say that a global shift and a mass electrification movement are underway is probably going to be an understatement, if I said so myself. Still, less than about 1% of cars and light duty vehicles on America's roads today are electric. And we're talking overall, not just in the fleet industry or the transportation industry, because then the numbers are a little bit more variable.

(04:08):

But there are several factors contributing to this slow transition. And sure you all know this by now, we've all been feeling some fatigue around this, but production delays and chip shortages and insufficient charging infrastructure, all of it boils into challenges that surround this whole electrification movement. Another major challenge that will become more prevalent as EV adoption accelerates is the overwhelming strain on the nation's electric grid. We've heard some concerns with that too, I'm sure. But while fleets are evidently more concerned with the procurement of EVs themselves, because that's also a huge piece of this, a lot of electric suppliers and utilities are concerned with ensuring that the grid can support such a large increase in demand.

(04:49):

I mean, because you think about it. It's not just EVs that we're trying to power. It's homes, it's charging your cell phone. I mean, it's all of these things, right? And the U.S. Department of Energy estimates that electricity conception could go up by 38% by 2050, with a rate at which EVs are expected to be adopted. In addition to providing enough power to fuel these vehicles, there's the added challenge of doing so without fossil fuels, which currently account for about 61% of electricity generation in the U.S. But what are we doing to solve this? Well, that's what we're talking about in today's episode. Let's dig in.

(05:56):

So the question that I would like to pose today, and this might be a little bit tactile here, we'll see, could nuclear energy be a solution? Well, the U.S. is the world's largest producer of nuclear power today, with about 19% of the nation's total electricity coming from over 90 nuclear power reactors across the country. The energy source is stable, emissions free, and could potentially be a key tool in supporting mass electrification and reaching carbon neutrality.

(06:25):

So we think. That's just the top of the research piece that we're starting to come out with right now. But even with 60 years of experience with nuclear power, the public opinion remains pretty mixed, I would say. And part of this... So a 2021 study by PEW Research found that about 50% of adults in the U.S. are in support of expanding nuclear power generation, while about 47% are against.

(06:46):

So a pretty even split here. But, for me at least, it's unsurprising because there's been quite a few disasters that have left a tainted view on nuclear power throughout history. I'm sure you've heard of some of them, or at least most of them. But the fact is is that nuclear power plants are some of the most advanced and secure facilities that exist in terms of power generation today.

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And I wanted to talk about some of the benefits and challenges before we really get into the question of whether or not nuclear energy could be a solution for this mass electrification movement because, as I'm sure you know, with anything, there's going to be that, how do you call it, just not only differing opinions, but there's going to be challenges to any type of new implementation of power sources. But let's start with the benefits here.

(07:33):

The first piece is stability. Like we were talking about, it's a very stable type of power generation, and nuclear power is non-intermittent, meaning it can run 24/7, 365 days a year without any interruptions. This is common criticism of solar and wind power sources because these technologies do depend on, you guessed it, sunny skies and constant winds in order to produce more energy. And nuclear power plants provide a steady flow of electricity, ensuring reliability on the grid, which is already shaky in quite a few places.

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And the already overwhelming demand, which will only increase with more EVs, that could lead to a maxed out grid and citywide blackouts if we don't figure out a way to create a power source that is stable, but also sustainable. I mean, that's the biggest piece of this whole movement, right? Now, moving on to the next piece is low carbon because, again, we're looking at a sustainable source of power generation that isn't just a fossil fuel-based solution.

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And nuclear power is very, very low in carbon. So in the U.S., nuclear power is the largest source of emission-free energy. I think we already touched on that, but anyways, while the construction of a new nuclear appellant does result in greenhouse gas emissions, which has to be looked at for the total emissions profile of this type of energy, the decades of power generation that follow are completely greenhouse gas emission-free.

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This helps to minimize the effects of air pollution and global warming that are exacerbated by energy generation nationwide. And this is especially an important opportunity as the majority of electricity in the U.S. is generated by heavy polluting fossil fuels contributing to over 31% of the country's total carbon emissions. Now, I also did ask somebody at EUFMC just what the amount of nuclear waste is when we're looking at, say, for math's sake, let's look at 30 years of power generation.

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And what they were saying, and this was somebody that had actually had a conversation with I don't know if it was somebody that worked at a nuclear power plant or someone that was just familiar with one of the plants that's on the east coast, but he said it's the equivalent of a standard dump truck for 30 years. Not one per year, but just total. 30 years. One dump truck of waste. Now, given it's nasty stuff, but still, pretty small amount of ways for 30 years of power generation when you think about it.

(10:01):

My next piece here is the fact that it's, overall, pretty cheap. Now, cheap is kind of variable to what your perception of inexpensive is, but nuclear power is even cheaper to generate than fossil fuel sourced electricity, and that's just a fact. In fact, it costs between 33 to 50% less capital to generate nuclear power versus coal-powered energy itself. And nuclear power plants need minimal maintenance, meaning they can operate continuously for two years or more before needing refueling and servicing. And this also contributes to their extremely high capacity factor, which allows them to produce up to twice the amount of electricity as coal and gas plants. Now, expanding nuclear power production can keep electricity rates low while increasing the energy supply, which ultimately could make electric vehicles a more attractive option, just as a generalization here.

(11:26):

But because I want to ensure that this episode isn't fully biasing one way or another towards nuclear power, I'm quite neutral on it myself, but I wanted to delve into the major concerns here that a lot of people tend to bring up as part of this nuclear power option that's presented. And the first piece is capital costs, which might sound a bit contradicting because I just said that it's quite cheap to produce nuclear power. Which that, in fact, is true, and the operating costs of nuclear power plants are relatively low next to coal and gas power plants. However, the costs to build one are far higher. That's where the numbers get a little fudged here. Each nuclear reactor can cost upwards of about $7 billion to build due to their highly complex technology, design and construction. And from start to finish, plant construction can take about several years and the work of highly qualified specialists, extensive licensing requirements and potentially obstructive delays.

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These higher capital costs are a major barrier that have led to an overall decline in new plants in the U.S., as I'm sure you can imagine. But it is something that, once that initial investment is made, it could potentially be your low cost option going forward. Something to weigh there, whether it's worth it or not. The second piece, like I touched on, is nuclear waste. And the management of nuclear waste is a major concern, in terms of nuclear power production. We've talked about this. I'm sure you've talked about this with your peers and even your friends and your family. It's a very big concern for a lot of people. Once nuclear fuel has been used to generate power for a few years, it's removed from the reactor as highly radioactive waste and whilst not that much waste is actually produced, what comes out can remain radioactive and dangerous for thousands of years, if not disposed of properly.

(13:12):

And while some countries struggle to create a permanent solution for their nuclear waste, many employ temporary storage strategies that are holding onto waste from as early as the 1940s. Now, ultimately, these plants hope for the development of deep geological repositories to become permanent solutions for this toxic waste to try and alleviate some of the problems. But along those same notes, so not necessarily the waste piece, but the potential for disaster because highly toxic waste can also be a challenge too, major nuclear disasters like Chernobyl in 1986 and Fukushima in 2011 have left most people in our current society with deeply negative associations of nuclear power.

(13:53):

The magnitude of devastation caused by these reactor meltdowns has resulted in political divide and nervousness and fear even decades after it's actually happened. For good reason, right? Because it was a massive disaster and a lot of people were affected as a result. But because of this, many are against nuclear power and they're fearful of the destruction that another meltdown could cause. For example, California recently shut down its last remaining nuclear power plant in Diablo Canyon, largely due to concerns about nearby fault lines. Makes sense, right?

(14:23):

And just as in the case of Fukushima, a severe earthquake could be enough to cause system failure at a power plant, which isn't good. My point is, though, is in the end, the debate to expand or reduce nuclear power production is a pretty complex one. I mean, this we've probably just gathered just from talking about it now, but from fossil fuels to nuclear to solar and wind, each energy source entails its own set of pros and cons that can sway public opinion for or against. And with a growing demand for energy and an increasingly urgent climate crisis, reliable and sustainable options are needed as soon as possible to try and figure this whole move to a more sustainable future out.

(15:05):

I mean, that's just what's going to have to happen. But until cleaner energy sources can meet demand, phase out gas and coal, and be stable, that's the big thing, stable alternative power sources, energy suppliers will have to rely on careful planning to negotiate and support nationwide EV charging and capabilities. And Congress actually, just so you know, already has plans to invest about $5 billion into great expansion and updates, but other measures such as incentivizing off peak charging could potentially help mitigate the strain on the grid in the meantime. You know, that whole smart charger piece about being able to plug in your car and then set it to charge during certain hours of that night? That's what I'm talking about here.

(15:46):

All things considered though, energy suppliers still have a little bit of time to explore sustainable alternatives and invest into the future of energy as EV's progressively gain popularity. But I would love to hear what you think. Do you think nuclear based power will be a viable option to help power transportation the upcoming years? Or do you think it's a fad that has people grasping at straws? Let me know. Send me an email. Tag me on LinkedIn and use the hashtag Utilimarc Fleet FYIs or you know the drill. You can even send me a carrier pigeon if you like. I don't judge. But until next Friday, that is all from me. Looking forward to chatting to you then. Ciao.

(16:41):

Hey there, I think this is the time that I should cue the virtual high five because you've just finished listening to another episode of the Fleet FYIs podcast. If you're already wanting more content, head over to utilimarc.com, which is Utilimarc with a C. U-T-I-LI-M-A-R-C.com for this episode's show notes and extra insights coming straight from our analysts to you. That's all from me this week, so until next time, I'll catch you later.