By: Frederic T. Repond
Frederic Repond is a first year underwriting analyst for AIG Environmental. He graduated from the University of Chicago with a bachelors in economics and environmental studies in 2015.
Today’s world faces a rapidly growing population that requires more energy per person than ever before. Powering everything from modern medicine to the networks that keep society connected, energy is playing a larger daily role in the digital world, yet producing that energy comes at a cost. 85% of global annual anthropogenic carbon dioxide emissions originate from fossil fuel combustion. Thus determining an energy solution to meet increasing demand that eliminates greenhouse gas emissions is essential for a sustainable future.
As the electricity market and grid become increasingly complex to satisfy global energy demand, a multi-pronged “wedge” solution appears to be the optimal strategy to address the issue. Renewable energies such as wind and solar now appear to provide an economically viable alternative to fossil fuels yet they do not provide much needed baseload electricity as coal, gas and nuclear do. Yet, of the three, nuclear energy is the only substantial baseload electricity source that does not emit carbon. Nevertheless concerns over uranium’s safety have led to market stagnation. Uranium suffers from several concerns regarding waste storage, safety and supply. Uranium is not, however, the only scientifically viable fissile fuel.
Thorium is an alternative fissile fuel that is highly accessible and abundant, it produces minimal radioactive waste, it has increased efficiency and thorium is proliferation and meltdown resistant. My thesis therefore seeks to determine the general and economic viability of thorium-based nuclear power.
For an energy technology to be economically viable, it must first be environmentally, historically and scientifically viable. Here is a breakdown of thorium’s general viability:
Environmental Viability
– Global nuclear power has prevented an average of 1.84 million air pollution-related deaths and 64 gigatons of CO2-equivalent greenhouse gas emission
– Thorium benefits from the same carbon saving properties as uranium-based nuclear power
Historical Analysis
– Thorium was not initially researched by the U.S. Department of Defense in 1942 due to its limited weapons potential
– Between 1976-1989 the U.S. successfully tested a 330 Mwe commercial-scale thorium reactor at Fort St. Vrain, however thorium research halted when new and more available uranium deposits were discovered
Scientific Viability
– Thorium is 3-4 times more abundant than uranium
– Thorium is proliferation and meltdown resistant
– Thorium is compatible in all currently operating uranium-fed nuclear reactors
– Thorium produces lower volume but higher intensity radioactive waste
– Thorium requires a higher reactor core temperature than uranium
Thus from a general viability perspective, the case for thorium is convincing. Whereas it does still have some technological hurdles such as higher reactor core temperatures and higher intensity radioactive waste, thorium is expected to be a safer, cleaner and more efficient source of baseload energy than its uranium relative. The largest question that remains concerns the cost of thorium.
To study thorium’s economic viability, we must consider its Levelized Cost of Electricity (LCOE). LCOE is a measure of the total cost of electricity production per unit, this includes every expense from construction capital costs to operation and maintenance to decommissioning. The figure below compares the LCOE of solar, wind, coal, uranium and natural gas with that of three current thorium reactor technologies: the Heavy Water Reactor (HWR) the Light Water Reactor (LWR) and the Fast Reactor (FR) (Figure 1).
Figure 1 Levelized Cost of Electricity by Energy Source
As can be seen from the figure above, thorium is expected to cost up to 50% less per unit of electricity than conventional nuclear uranium, coal and natural gas. If we extrapolate out cost savings to the entire U.S. economy to 2040, accounting for projected increases in renewable energy capacity, we get the following figure (Figure 2).
Figure 2 U.S. Baseload Electricity Cost Comparison of Thorium vs. Business As Usual
Thorium is therefore 39% cheaper than coal, 33% cheaper than uranium and 30% cheaper than natural gas. Replacing all U.S. baseload electricity with thorium-based nuclear power by 2040 is expected to save the U.S. economy $120 billion per year. We then consider the social pollution benefits of replacing all U.S. baseload electricity by 2040 in the figure below (Figure 3).
Figure 3: Annual U.S. Social Cost of Pollution Saved by Switching to Thorium
Switching to thorium is therefore expected to save the U.S. economy $230 billion per year in social pollution costs from other electricity sources. Finally, the total savings from replacing all U.S. baseload electricity with thorium by 2040 is expected to be $350 billion per year or $900 per U.S. resident per year.
Thorium therefore appears to be both generally and economically viable. If these estimates are accurate, thorium could provide the world with an equally distributed, abundant, cheap, clean, safe, and reliable source of electricity for centuries to come. It is therefore recommended that the United States join research efforts that are already being conducted in India and China to further study the economic costs and benefits of thorium research and development. If thorium proves viable, it will open the world market to trillions of dollars of clean, safe and reliable energy for centuries to come, and we want to make sure that we are a part of it.
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