Addressing the UK’s baseload electricity demand gap: development pathways of two nuclear power technologies 

Executive Summary

This essay considers the innovation and development pathways of nuclear power technologies in response to a UK policy shift in favour of new nuclear power capacity.  Particular emphasis is made on the imminent gap in continuous (baseload) electricity supply. The essay considers the innovation pathways of two technologies: Small Modular Reactors (SMRs) and nuclear fusion. The analysis of the technologies by reference to facets of innovation, complementary assets and the Pavitt Taxonomy illustrates aspects of their innovation pathways, highlighting notable similarities and differences; in particular, the critical role of tacit knowledge in nuclear technology development and how the history of the UK nuclear industry is a strong influence on path dependency.  Potential limitations of the Pavitt Taxonomy when deployed in such a complex arena are suggested.  In conclusion, observations are made on how UK Government actions could be locking-in path dependency, rather than enabling more innovative responses to the issue.

 

Introduction

The United Nations Sustainable Development Goals (SDGs) define the UN’s “urgent call for action” to deliver a sustainable future for people and the planet (https://sdgs.un.org/goals).  SDG7 (Affordable Clean Energy) has been the subject of much attention in recent months due to the rapid inflation of energy costs resulting from demand changes following the end of the COVID pandemic and sanctions placed on Russia due to the war in Ukraine. However, the need for policy action in this area was recognised much earlier than these events.

The UK has seen a dramatic increase in the contribution of renewables to electricity supply over 30 years, from 2% in 1991 to 43% in 2020 (National Grid, 2022). However, the emphasis on wind and other intermittent energy sources, has increased the debate surrounding continuous (“baseload”) electricity supply.  Added to this, the war in Ukraine has highlighted the risks associated with reliance on imported fuel, adding further to concerns over energy security (BEIS, 2022a).

In response, UK Government policy has shifted in favour of new nuclear power generation capacity. As set out in the Energy Security Strategy, the government has increased direct support in this area, including: setting up Great British Nuclear; providing direct funding to support the development of new reactor concepts (Future Nuclear Enabling Fund); and most recently, £679M investment in Sizewell C (BEIS, 2022b).

This essay considers the innovation pathways of two technologies that have received heightened attention in response to this policy shift: Small Modular Reactors (SMRs)[1] and nuclear fusion. They provide an interesting contrast in that SMRs are a relatively recent development that has the potential to provide a near-term response to the policy issue (Science and Technology Committee, 2022); whilst in contrast, nuclear fusion has been researched for decades and, despite recent developments, a deployable technology to address global energy needs remains decades in the future (Sample, 2022).


( [1] SMRs are distinct from Advance Modular Reactors (AMRs).  SMRs are effectively smaller versions of the larger nuclear reactors used in currently operating power plants, whereas AMRs rely on new fuels, coolant systems, moderators and core designs).


Framework Analysis

The two technologies will be compared by reference to complementary assets associated with coupling models and the Pavitt Taxonomy (Pavitt, 1984). The intention is to draw out differences and similarities in their innovation pathways and consider the extent with which government policy and intervention are influencing them.

To bring specificity to the analysis, this essay will focus on the Rolls Royce SMR, which has been a recent recipient of UK government funding (BEIS, 2021). For fusion, a generic approach is taken, given the lack of a true front runner. A number of fusion research programmes are currently operating, with UK interest in several of them (e.g. JET (https://ccfe.ukaea.uk/research/joint-european-torus/), ITER (https://www.iter.org/), General Fusion (https://generalfusion.com/)).

Firstly, however, Table 1 describes the technologies using some of Fagerberg’s (2005) key facets of innovation.  Whilst not a formal “framework”, these facets provide an excellent structure for indicating innovation pathways. 

Consideration of the technologies with respect to coupling models provide further insight. Comparison of an established firm (Rolls Royce) and the technology specific start-ups looking to win the race to bring fusion to market (albeit decades hence), is of particular interest. Teece (1982) provides a set of complimentary assets that significantly increase the likelihood of a firm profiting from an innovation, which are used in Table 2.

Analysing the technologies using the Pavitt Taxonomy (Pavitt, 1984) brings out some significant distinctions between the technologies and the key players. The analysis is undertaken from the perspective of the provider of reactor technology. 

DISCUSSION AND CONCLUSION 

The analysis against frameworks has provided a number of insights, outlined below:

Fagerberg’s facets show that these technologies are clearly in innovation space.  They also highlight how proximity drives commercialisation.  In the case of SMR, proximity to undersupply has led to policy change and created an opportunity to accelerate development. For fusion, commercialisation appears to have been driven by a belief that solutions are nearer in terms of time than they have ever been.

Despite acting on different timescales, the role of complementary assets are clearly recognised for both technologies. Tacit and cumulative knowledge is at the heart of both developments:

Capabilities that could be grouped under “communications”, are widely deployed.  For an industry that was once considered as cloaked in secrecy, this is a significant shift.  Some differences are apparent, with Rolls Royce maintaining links to Government and likely trading on their name, whilst “new” entrants to the fusion market focus on obtaining private investment.

The assessment using the Pavitt Taxonomy appears to illustrate differences indicative of the technologies being at different stages of the development lifecycle. Despite Pavitt’s view that too much consideration is given to demand pull vs technology push (Pavitt, 1984), we do appear to see a difference in this respect, with SMRs as “pull” and fusion as “push”.  As Pavitt notes, both have a role.  The assessment suggests that proximity to providing a solution to a policy problem makes “pull” the dominant effect for SMRs.  For fusion to become a viable technology, the leap is currently too great for it to be a front runner; progress is driven by proponents’ belief that in the long run it will provide a game-changing solution.

A potential limitation of the Pavitt Taxonomy is that the outcome of the analysis is very much dependent on which actor is being considered, for example: reactor firm vs utility company.  Utility companies provide a service, whilst reactor firms could be considered as providing a product. This also depends on the relationship between the reactor firm and the utility company.  A “turn-key” solution from a reactor firm looks more like a service and it would not be unusual for the reactor provider and utility company to be the same organisation (e.g. EDF at Hinkley Point C). In such circumstances it is not clear where product finishes and service starts. Whilst this is not strictly a failing of the taxonomy, it is a potential source of confusion. Even this layered and adaptable taxonomy struggles to completely capture real-world complexity.

What does this mean for policy?

This assessment of the UK’s challenge of delivering baseline electricity supply has shown that proximity gives great impetus.  More importantly though, government policy (BEIS, 2022a) has provided clear signals that now is a worthwhile time for the significant investment needed for technology development in this arena.

Whilst the UK government states that it welcomes innovation  (UKRI, 2022), it is interesting to note that their actions may have constrained innovation by affirming path dependency.  The UK government has backed the Rolls Royce SMR, in part because it is a development of the graphite reactors used for earlier UK nuclear power stations.  It is therefore considered as compatible with the existing industry (e.g. operating capabilities; regulations etc) (Science & Technology Committee, 2022). As noted above, cumulative knowledge has defined the path, and this has subsequently been reinforced by government decisions.  This influence may mean the best technology is missed.

In contrast, major research programmes for fusion have for a long time focussed on one particular technology (the “Tokomak”) and it is interesting that recent entrants have adopted alternatives (e.g. General Fusion: Magnetized Target Fusion; NIF: lasers; TAE Particle Accelerator Beams).  This suggests that these firms are looking to exploit new innovation pathways so as to be distinct from the apparently slow progress of big public sector research.

For both technologies, the levels of funding required for development are huge and can likely only be supported in developed countries. It has also been shown that an established nuclear industry is an essential component (because of the reliance on tacit cumulative knowledge), which is why most nuclear developments occur in countries like: UK, USA, France, China etc. It’s apparent that these developments appear to be an attempt to make step-change advances, which other countries may not be able to afford. In addition, the emphasis on providing more energy, rather than addressing demand, may be indicative of a lack of holistic consideration of the issue.


REFERENCES:

Dept for Business, Energy & Industrial Strategy (BEIS) (2021) UK backs new small nuclear technology with £210 million. Available at: https://www.gov.uk/government/news/uk-backs-new-small-nuclear-technology-with-210-million (Accessed 15 December 2022)

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Pavitt, K (1984), ‘Sectoral patterns of technical change: Towards a taxonomy and a theory’ in Research Policy, 13 (6), pp 343-373

Sample, I (2022) US scientists confirm ‘major breakthrough’ in nuclear fusion, The Guardian, 13 December.  Available at: https://www.theguardian.com/environment/2022/dec/13/us-scientists-confirm-major-breakthrough-in-nuclear-fusion (Accessed: 13 December 2022)

Science & Technology Committee (2022) Delivering nuclear power. Available at: https://parliamentlive.tv/event/index/55ed1ece-e78b-4aad-bf11-548fed9f3316 (Accessed: 24 November 2022)

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UK Research and Innovation (UKRI) (2022) Innovate UK, Available at: https://www.ukri.org/councils/innovate-uk/ (Accessed 14 December 2022)